BSP-Philippines' Macroeconomic Fundamentals Remain Sound, Strong External Accounts Seen to Help the Economy Withstand Shocks.
ENPNewswire-September 16, 2021--BSP-Philippines' Macroeconomic Fundamentals Remain Sound, Strong External Accounts Seen to Help the Economy Withstand Shocks
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Release date- 14092021 - ?Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno emphasized that sound macroeconomic fundamentals are supporting the Philippine economy's recovery and helping pave the way for a much stronger economy in the post-pandemic era.
During a virtual fireside chat with clients of Japan-based financial services firm, Nomura, the BSP Governor said the Philippine economy has begun the recovery process, as evidenced by the 11.8-percent growth in the second quarter. He said manageable inflation, stable banking sector, and robust external payments position, among other fundamentals, will support recovery and help keep the economic effects of the pandemic temporary.
'The Philippines' economic fundamentals remain sound. While the pandemic poses challenges in the short term, the country continues to enjoy bright medium- and long-term growth prospects,' said the central bank chief.
BSP estimates that inflation will slightly exceed the 2.0 to 4.0-percent target range this year due to supply factors but will ease toward the midpoint of the target band next year and in 2023. Manageable inflation will continue to provide an enabling environment for investments and, therefore, job creation and income growth.
In terms of banking sector stability, banks in the country have kept their capitalization and liquidity buffers well above the regulatory requirements and their exposure to bad debts manageable throughout the crisis. As such, banks will remain capable of supporting growth of the economy.
On the country's external accounts, the BSP Governor said buffers are sufficient to manage impact of shocks, including market reaction over pending move of the US Federal Reserve to normalize its monetary policy.
'Our external liquidity buffers continue to be more than adequate,' the Governor said. 'Our hefty GIR (gross international reserves), steady inflows from remittances and BPOs (business process outsourcing), and recovery of exports and FDIs (foreign direct investments) will support the peso.'
The GIR, based on preliminary data, reached USD 108.05 billion as of end-August this year, higher than the country's outstanding external debt. Latest data showed that external debt amounted to USD 97 billion as of end-March this...
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