REFORMS have made the Philippine economy more resilient in the face of external shocks, presenting investors with untapped opportunities, the central bank governor said.
In his keynote address at the Euromoney Philippine Investment Forum Tuesday at the Fairmont Makati, Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said the reforms have transformed the Philippines into “one of the most resilient economies in the region in the world.”
Mr. Diokno cited the Philippines’ recovery from the 2018 inflation crisis, when the indicator peaked at 6.7% late in the year. Price growth has since “reverted to within the target range of 2-4%.”
He said the 5.5% growth in gross domestic product (GDP) in the second quarter, while slower than recent quarters, represents “the 82nd consecutive quarter of uninterrupted economic growth. This shows we have managed to sail through even the toughest external challenges, from the Asian financial crisis to the global financial crisis.”
“Our projection is for the Philippines to continue growing. This is consistent with the lofty goal of becoming a high-income economy in about two decades,” he added.
“We are currently rated one notch above the minimum investment grade by Fitch and Moody’s, while we are just a step away from securing a Single-A rating from S&P Global. We are keen on hitting the minimum rating within the A territory over the next two years or so,” he said.
Mr. Diokno said improved credit ratings are not just “end goals” but translate directly to concrete benefits “economic growth” and “actual poverty reduction.”
“With higher credit ratings, interest rates on government borrowings drop, which leads to savings on interest payments and, therefore, more fiscal space to fund infrastructure projects and social services,” Mr. Diokno said.
“As such, aiming for A ratings goes hand in hand with the goal for the Philippines to graduate into an upper middle-income economy over the short term and to a high-income economy over the long haul,” he said. — Luz Wendy T. Noble