BSP sees accelerating eco growth

THE Bangko Sentral ng Pilipinas (BSP) expects economic growth to accelerate this year, bolstered by added contributions from the external-trade sector, Governor Amando M. Tetangco Jr. said.

In a speech during a business forum on Friday but distributed to reporters on Tuesday, Tetangco noted that the BSP was further encoauraged by early indicators in the first three months of the year.

“Nothing in the first quarter gives us reason to take pause. Instead, the outlook continues to be encouraging,” Tetangco said in his speech during the 29th Biennial Convention of the Federation of Filipino-Chinese Chambers of Commerce and Industry Inc.

“Given available data, we expect growth to further accelerate but this time aside from the growth drivers in 2012, we anticipate a more pronounce4d contribution from the external-trade sector,” the BSP governor added.

The Philippine economy expanded by 6.6 percent last year and the government is forecasting 2013 growth to end at between 6 percent and 7 percent. Economic expansion is being supported by the record-low interest-rate environment amid management inflation, Tetangco said.

“Indeed, we expect this scenario of high growth-low inflation to be sustained going forward,” said Tetangco, who noted earlier that inflation through this year and 2014 is expected to stay at the lower bound of the 3-percent to 5-percent forecast range.

He likewise cited the strength of the banking sector ahead of the implementation of the Basel 3 capital framework next year and the country’s “robust” external position. The country’s gross international reserves as of February stood at $83.8 billion and the BSP sees the full-year figure closing at $86 billion.

“Whether we look at the overall BOP [balance of payments] position or its sub components, we see positive balances. Remittances from [overseas Filipinos] continue to bolster domestic liquidity while [business process outsourcing] estimated receipts continue to be a positive factor,” Tetangco said.

The BOP is also seen to remain in surplus, which in turn will support an even higher level of international reserves. At end 2013, the GIR is projected to reach $86 billion.

Financial buffers like the GIR will help the country weather external negative effects. Tetangco cited potential delays to the resolution of fiscal issues and continued volatility coming from capital inflows into the country.

Tetangco likewise called on the Filipino-Chinese Chambers to help sustain the country’s growth momentum. He cited areas like the government public private participation, wider investments in exports, a stronger industrial base, and investments in education such as scholarships in Chinese-Filipino schools. –Miguel R. Camus / Reporter, Businessmirror