October 01, 2018
MANILA – Despite the downward adjustments in the growth outlook from the Asian Development Bank (ADB) and Fitch Solutions, Inc., the government remains bullish about the country’s economic prospects.
“We understand the concerns of ADB and Fitch, but we remain confident about the strength and stability of the country’s macroeconomic fundamentals,” said Socioeconomic Planning Secretary Ernesto M. Pernia.
ADB recently announced that it is cutting its Philippine growth forecast to 6.4 percent from 6.8 percent for full-year 2018. The Manila-based lender also revised its 2019 outlook to 6.7 percent.
ADB’s revision comes after Fitch Solutions, a member of the Fitch Group, last month recast its growth outlook for the country down to 6.3 percent from 6.5 percent.
“Our economy has been strong, growing by an average of 6.4 percent in the last eight years. This is the fastest since the mid-1970s.” the economic planning secretary said. He attributed growth in the past years since 2010 to robust domestic demand, rising contribution of investments and the industry sector, and high growth in total factor productivity.
For the first half of 2018, the economy grew by 6.3 percent. “While this is slower compared to that of last year, we have strong enough macroeconomic fundamentals to weather external risks. Our fiscal policy remains prudent, our external position is supportive of economic growth, we have a stable banking system, and measures to address high inflation are currently being prioritized,” Pernia added.
He pointed out that the government will continue to push for necessary policy reforms and faster implementation of its infrastructure program.
President Duterte also signed Administrative Order (AO) No. 13 last week, which will remove non-tariff barriers and streamline administrative procedures on the importation of agricultural products, as among its measures to counter high inflation.
The AO was released on September 25, 2018.
“Besides short-term measures, we also need to look at long term solutions like giving farmers access to farming technology and developing high yielding varieties of rice and other vegetables. Thus, we are calling for the urgent passage of the Rice Tariffication bill,” he added.
Meanwhile, the Duterte administration continues to ramp up investments in infrastructure to improve connectivity and lower the cost of doing business in the country.
On lessening foreign investment restrictions into the country, the Economic Development Cluster has approved the draft of the 11th Regular Foreign Investment Negative List (RFINL), which will be the least restrictive among all FINLs. This is now with the President for his signature.
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