Secretary Benjamin E. Diokno of the Department of Budget and Management (DBM) gave the keynote speech at The Outlook 2018 in Makati City on Thursday.
The budget chief shared his insights on the direction of the Philippine economy in the context of many developments at home and abroad, including rising protectionism, higher world oil prices, and the normalization of monetary policy in advanced economies.
He said that “despite these, the Philippines remains to be one of the fastest growing economies in the fastest growing region, that is the ASEAN region, in the world.”
In fact, the World Bank, in a statement last October 4, said that with the context of “rising global uncertainty and inflationary pressures, the Philippine economy is poised to remain strong…”
The Philippine economy has been growing over the past two decades. In 2017, it has grown by 6.7%, becoming one of the best performing economies among emerging markets. Over the first three quarters of 2018, the economy expanded by 6.3%.
Secretary Diokno shared his expectation that the Philippine economy will grow by 6.5 to 6.9% this year and that the growth target of 7.0 to 8.0% is “attainable” in the medium term. He also conveyed his confidence that the Philippines will become an upper-middle income country with a Gross National Income per capita of USD 4,000.
The budget secretary also featured the improving fiscal indicators of the Philippines with its strong and increasing revenue effort, stable deficit level, and decreasing debt-to-GDP ratio. He also discussed the 75-25 financing mix of the government in favor of domestic sources which was “designed to minimize the country’s risk from foreign exchange fluctuations.”
Amidst foreign developments like a much stronger US dollar and higher oil prices, the secretary emphasized the significant and continuous foreign currency flows from Overseas Filipino Workers (OFW), the Business Process Outsourcing (BPO) industry, and foreign direct investments (FDI) that serve to bolster the country’s gross international reserves and plug its current account deficit.
“All these macroeconomic indicators demonstrate that in spite of global and domestic challenges that the Philippine economy faces, the bigger picture suggests a solid, robust, and resilient economy” Diokno said.
The government’s measures at mitigating inflation, especially for rice and petroleum products, and its programs to maintain the economy’s momentum with infrastructure and human capital development were also discussed by Diokno.
The Outlook, presented by Lamudi and co-presented by the Philippine Daily Inquirer Property, is an annual gathering of prominent professionals in the Philippine real estate sector.