Optimistic prospects are expected for the Philippine economy due to the passage of liberalization reforms and the openness of the administration to collaborate with the private sector, Finance Secretary Benjamin Diokno said in a meeting with Makati Business Club (MBC) on Feb. 3.
“I’m pretty optimistic because there are new (investment) areas, more than we had before…I think we can grow at 6.5-8% but the main constraint will be the energy sector,” Mr. Diokno told MBC members and guests.
The country’s gross domestic product (GDP) grew 7.2% in the fourth quarter of 2022, led by accommodation and food service activities (36.1), transportation and storage (19.2), and other services (18.3), the government reported last week, beating consensus economist estimates of 6.6%. While this is among the fastest rates in the region, the Philippines is playing catch-up after suffering one of the biggest contractions in 2020.
Inflation inched up to 8.1% in December, the highest rate since 1976, resulting in average inflation of 5.8% for 2022. The Bangko Sentral ng Pilipinas raised its key interest rate to 5.5% in December, a 14-year high. While this may damp inflation, it may also slow the economy and job creation.
Globally, the International Monetary Fund has said 2023 “may feel like a recession.” However, according to Sec. Diokno: “I think it (inflation) has peaked…I think things are looking up and the future is bright for the Philippines.”
“MBC joins the rest of the private sector in supporting Sec. Diokno and the rest of the Administration’s policies to provide an enabling environment for the investment needed to create more jobs for Filipinos,” MBC Chairman Edgar Chua said after the meeting.
In his welcome and introductory remarks, Mr. Chua pointed out that Mr. Diokno “took on a formidable task” when he took over the Department of Finance. He noted how the new administration achieved quick and much-welcomed fixes to the IRR of the BOT Law, the Telecommuting Act, the Renewable Energy sector, among others.
Mr. Diokno’s meeting with MBC was the first installment of MBC’s “F2F with Cab Secs” series, which featured five other key economic managers. NEDA Sec. Arsenio Balisacan is next on Feb. 23. MBC has visited 11 other national government officials since President Ferdinand Marcos Jr. was elected in May 2022.
The “F2F with Cab Secs” series is part of MBC’s contribution to deepening public-private dialogue and collaboration.
“Efforts such as these are important because the government and business have to be partners,” Mr. Chua said. “Government provides the enabling environment — well-nourished kids, well-educated workforce, healthcare, infrastructure, peace and order — so we in the private sector invest and create jobs.”
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