AMID relatively weaker growth, falling inflation and global volatilities affecting the local financial market, the Philippine economy is still deemed by the International Monetary Fund (IMF) as “favorable” at the time being—consequently lauding economic managers on their successful handling of the economy.
In a recent statement from the IMF at the conclusion of the 2015 Article IV Consultation with the Philippines, the multinational monetary authority said that the country is still growing “broadly at potential,” despite the growth falling in the 5-percent territory in the first months of the year.
“The outlook for the Philippine economy remains favorable, despite uneven and generally weaker global growth prospects,” the IMF said.
“As the economy is growing broadly at potential, there is no evidence of price or wage pressures and considerable slack in the labor-market remains,” the IMF added.
The Philippine Statistics Authority (PSA) earlier reported that the country grew at a revised growth of 5 percent in the first quarter and at 5.6 percent in the second quarter of the year.
Inflation, meanwhile, has been falling below 1 percent—most recently in August, at 0.6 percent; while the foreign-exchange market ad stock exchange has recently lost significant gains this year due to market volatility.
Despite this, the IMF maintained that the country’s external and fiscal positions are still strong, with a significant level of current-account surplus and gross international reserve.
The IMF executive board, which assessed the Philippine economic dynamics, also lauded the country’s authorities for their “prudent macroeconomic management, which has delivered strong outcomes and has set the stage for favorable growth prospects despite external headwinds.”
The IMF also said that it welcomes the government’s plan to step up infrastructure investment and social spending, and urged the government to further strengthen public financial management and budget execution and mobilization to meet the large social and infrastructure needs.
The current monetary-policy stance was also deemed to be appropriate at the conditions of low inflation, “moderating and more balanced” credit growth and moderating but still robust economic activity.
“Directors supported the authorities’ medium-term priorities that would allow the country to reap the dividends from its young and growing population,” the IMF said.