MANILA – Various recent economic indicator show that the Philippines is doing well at this point, with even the international community taking note.
For one, the country’s global rating was recently raised by a notch by S&P Global Ratings due to the country’s above average growth, especially in the first quarter of 2019.
Also, despite what it calls “heightened global risks and stronger external headwinds,” the Philippines’ economic growth is expected to pick up this year up to 2020, according to the ASEAN+3 Macroeconomic Research Office (AMRO).
In a report released at the start of this week, AMRO said the Philippines will be “resilient” in the near term, along with its Southeast Asian neighbors.
For Filipino consumers, the Bangko Sentral ng Pilipinas (BSP) also had positive news where it affects them most – their buying power.
The BSP’s Department of Economic Research also said early this week that price increases in the most widely bought goods appear to have eased for the sixth straight month, heading to a 20-month low in April with declining rice prices and the local currency’s appreciation offset high fuel and electricity prices.
In the middle to the end of 2018, inflation had been reaching towards the mid to high single digits, causing some concern for the government’s economic planners.
By Sunday, May 7, the Philippine Statistics Authority will release official data on the economy. The BSP expects April inflation “to settle within the 2.7% to 3.5% range” once the report is released.
S&P raised the Philippines’ longterm sovereign credit rating to BBB+ from the previous BBB. The upgrade brings the country one step closer to winning a single A grade.
The global ratings company gave a “stable” outlook to the rating. The BBB+ rating is expected to stand firm for the next six months up to two years.
Therefore, the Philippine economy is most likely to remain strong over the short to medium term.
Two other ratings agencies, however, were not as optimistic but still gave the Philippines a stable outlook for the same period.
Fitch Ratings and Moody’s Investor Investors Service gave the Philippines similar BBB (in December 2018) and Baa2 (July 2018), respectively, or a notch above minimum investment grade.
Prices of commodities
In a news briefing last week, Trade Secretary Ramon Lopez said rice now retails for about P34 to P38 per kilogram (/kg) from as high as about P50/kg a year ago. Rice remains the staple food of Filipinos and the prices of this prime commodity is seen as a gauge of how well or how poorly the economy is doing.
Meanwhile, higher local oil prices and upward adjustment in electricity rates are seen to provide upward price pressures for the April, although these pressures may be offset by the continued decline in rice prices and by peso’s appreciation.
Overall, the Philippines gross domestic product – the sum total of all goods and services produced by the country excluding earnings from overseas based workers – is seen by AMRO to hit 6.4% this year then climb to 6.6% in 2020.
Other global organizations see the Philippines GDP at the same or close to those levels, with Fitch Ratings projecting 6.2%, the World Bank and Asian Development Bank predicting 6.4%, and the International Monetary Fund expecting 6.5%. (Philippine News)