By Joann Santiago
MANILA, May 7 (PNA) — Philippines’ domestic fundamentals will continue to be the country’s strong wall against the slowdown in global growth, International Monetary Fund (IMF) Resident Representative to the Philippines Shanaka Peiris said.
In a briefing Thursday, Peiris said global growth is projected to remain weak but will be driven by the Asia and the Pacific as earlier discussed in the multilateral lender’s world economic outlook (WEO) report released in April 2015.
IMF forecasts a 3.5 percent growth for the global economy this year and 3.8 percent next year. In 2014, global output stood at 3.4 percent.
For the Philippines, the lender sees a 6.7 percent growth for the Philippines this year and 6.3 percent for 2016, with the slowdown due to the impact of weaker exports as demand from major economies is seen to go down.
These growth projections are lower than the government’s seven to eight percent growth target, as measured by gross domestic product (GDP), for the two-year period.
Peiris said domestic expansion in the region is stabilizing due largely to the deceleration of China’s economy but growth outlook remains robust.
He said the drop in oil prices is a plus for the region as commodity prices are seen to moderate and positively impact in inflation.
He, however, said that the asynchronous monetary policy in the region is an issue and authorities should be on the look-out for this.
For the Philippines, the IMF executive said monetary policy remains supportive of growth and the Bangko Sentral ng Pilipinas (BSP) continues to have room for any adjustments.
”Philippines has the flexibility to respond to changing condition,” he said.
In terms of the impact of the current economic developments on the countries’ debt ratio, Peiris said this is not a problem for the Philippines since the government has turned to onshore fund sources for its requirements.
In terms of potential growth, which IMF earlier said is slowing in the region, Peiris said this is a big issue for the world and in Asia “but Philippines in an outlier.” (PNA)