Investments may now play a bigger role in the Philippines’ economy replacing consumer-led growth, says Bank of the Philippine Islands (BPI) President and Chief Executive Officer Cezar P. Consing.
In a recent gathering of finance and treasury leaders, the leader of the country’s first and top bank said the contributors to economic growth are changing just as the inflation rate eases and stabilizes to manageable levels.
“For the last two to three decades, the common theme was that growth is consumption-led. That is not true anymore. Investment is now a growth factor,” Consing said during the 11th Corporate Treasury and CFO Summit held in the Philippines last August.
The BPI official noted that investments in the transportation and communications sector have been growing by 7 to 8 percent year-on-year.
“That growth is closer to the ASEAN average. So it’s good to see the growth rate in things that matter. This would mean transportation, communication, and everything that speaks of investment,” he added.
Consing’s view supports that of Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno, who said the Philippines is now in a “Goldilocks economy, with the right mix of low inflation and high economic growth.”
“We’re in a nice place right now. We are in a Goldilocks economy; not too cold, not too hot. We’re growing at 6 percent, inflation is within the target of 3 percent. In fact, this year, our projection is at 2.7 percent. The gross international reserve (GIR), our buffer from any threat to the peso, is 7.5 months of our import requirements,” the BSP chief said.
Of this, Consing said, “We agree with BSP that growth rate will be within the 6% range.”
Based on BSP’s International Reserves report as of end-July, the country’s GIR continues to grow as it reached US$85.18 billion in July from June’s US$84.93 billion, which is higher than the $80 billion year-end forecast of BSP. This could adequately cover BSP’s 7.5 months import requirements.
To sustain this progress, BPI has embarked on an ongoing digital transformation journey to provide better access to relevant financial services, to further support and mobilize investment-led growth and to support the central bank’s agenda.
BSP also recently received awards for digital innovation in finance management from the Central Banking Fintech and Regtech Global Awards
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