Philippines’ Economy Expected to Grow 7% This Year
[MANILA] The Philippine economy can grow as much as 7% this year, aided by interest-rate cuts that will support investment and consumption, according to Finance Secretary Ralph Recto.
Stable Political Situation
On Wednesday (Mar 19), Recto said the country’s political situation remains stable. "We do not see that happening. Zero," he said on the sidelines of the InvestPH 2025 forum in Manila, when asked about the chances of the political situation unravelling and prompting instability after former leader Rodrigo Duterte’s arrest last week over his deadly drug war.
Monetary Easing
The finance chief, who sits in the seven-member policymaking board of the Bangko Sentral ng Pilipinas (BSP), said he expects a total of 50 to 75 basis points in rate cuts this year and the economy to expand by at least 6%. There is room for the BSP to resume monetary easing at its next meeting on April 10, he said.
Inflation and Currency
Inflation, which slowed sharply in February and sits at the low end of the central bank’s 2 to 4% target, remains under control while the peso has been relatively stable, according to Recto.
Central Bank’s Target
The central bank sees inflation staying within its target in the next two years, giving monetary authorities "flexibility" to "pursue dialling down policy tightness," BSP assistant governor Zeno Abenoja said.
Currency Strength
The Philippine peso has strengthened around 1% against the US dollar this year. In December, it touched its record low of 59, a level that has served as a key support since 2022.
Government’s Plan
The government aims to raise about 100 billion pesos from the sale of state assets, including a hydroelectric power plant, Recto said. The finance chief also said there is "very minimal left" of what the government needs to raise from the international bond market for this year.
Conclusion
The Philippine economy is expected to grow significantly this year, driven by interest-rate cuts and a stable political situation. The government is also confident of meeting its target of raising funds from state assets and the international bond market.
FAQs
Q: What is the expected growth rate of the Philippine economy this year?
A: 7%
Q: What is the current state of the Philippine political situation?
A: Stable, according to Finance Secretary Ralph Recto.
Q: What is the expected rate of inflation this year?
A: Within the central bank’s target of 2 to 4%.
Q: What is the current state of the peso?
A: Strengthened around 1% against the US dollar this year.
Q: How much does the government aim to raise from the sale of state assets?
A: About 100 billion pesos.
Q: What is the government’s plan for international bond sales?
A: Very minimal left to raise from the international bond market for this year.
