Financial institutions Bangko Sentral ng Pilipinas (BSP) and investment giant JP Morgan expect the Philippines will continue to grow under President Duterte. BSP, JP Morgan believes that the country will continue to attract confidence of the markets as the Philippine economic growth prospers under the administration of Mayor Rody Duterte.
According to BSP Deputy Governor Diwa Guinigundo the country’s annual 7%-8% GDP growth is “doable” despite the change in leadership from President Aquino to the presumptive president Mayor Rody Duterte which will be officially declared this coming June 30, 2016.
In an interview with the media, the BSP Deputy Governor Diwa Guinigundo was quoted as saying “We would expect that the economy will continue to be stable and the macro economy will continue to attract confidence of the markets,” Guinigundo said.
The interest rates in the Philippines remained unchanged for 13 straight policy setting meetings since October 2014 on Thursday, May 13, as inflation remained within the BSP’s target range of 2%-4% according to the statement released by BSP’s Monetary Board. Aside from the BSP’s decision, the Central Bank also kept its inflation forecast at 2.1% for this year and 3.1% in 2017.
Meanwhile JP Morgan on their part noted that the recent development in Philippine politics after the victory of Mayor Duterte were viewed by the banking giant JP Morgan as positive for the country. It said that both the financial and equities market welcomed the economic agenda of the incoming administration in its latest Asia Pacific Equity Research.
“We believe that financial markets will welcome the explicit commitment of the incoming administration in keeping the current macro-economic policies, particularly its focus on infrastructure,” the investment bank said.
“The absence of any drastic shifts is encouraging, in our view. The focus on grassroots development is also laudable, as inclusive growth has been a persistent problem of the economy. It also helps that the new government is cognizant of the need to maintain fiscal discipline despite its goal of making income tax more progressive,” JP Morgan added.
Although JP Morgan gives their positive outlook in the Duterte administration, the bank cautioned that “the appointment of a capable and experienced cabinet and economic team, and eventually, the ability to execute, are the next milestones to watch for.” JP Morgan stated. BSP, JP Morgan are considered as two of the most trusted agencies in terms of economic growth forecasts.
