Dominguez assures economy in good hands despite economic turbulence: Just take a long view
Finance Secretary Carlos Dominguez III said the current economic turmoil faced was just a phase that the country was going through.
“We would like to encourage everyone to take a long view of our situation as a country,” Dominguez said during the Philippine economic briefing held at the central bank office in Manila Tuesday.
The rate of price increases averaged at 4.8 percent in the first eight months this year, higher than the government’s two to four percent target band until 2020. The country ended 2017 with a current account deficit amounting to $2.5 billion after having surpluses in the past decade.As of last July, the government’s budget deficit amounted to P279.4 billion, 36 percent higher than year-ago’s P205 billion.
But Dominguez said the domestic economy remained resilient due to improvement in fiscal health, with revenue collections still on an upward trend, continued improvement of investment grade rating, and low debt to gross domestic product (GDP) ratio currently at around 42 percent from over 70 percent in the past.
“So we have a lot of headroom. Furthermore, our debt service is now only 13 percent of our annual budget,” he said.
Additional boost for the domestic economy is the healthy banking system, the Finance chief said.
“We have a very healthy banking system, which is a result of the excellent job the BSP (Bangko Sentral ng Pilipinas) has been doing over the years,” he said.
The country also enjoys high gross international reserves (GIR), he said.
As of end-August this year, preliminary data show that the country’s foreign exchange reserves amounted to $77.83 billion, higher than the $76.72 billion in the previous month.
Dominguez said the private sector is also a plus since it is “acting very rationally” by paying and prepaying their foreign currency-denominated obligations.
“They have paid down their foreign debt, I believe, to the extent of over $2.5 billion in the first six months of the year,” he said.
In 2017, the private sector paid a total of $4 billion worth of foreign obligations.
“We have a lot of tools in our chest and we can face temporary adversity. We are very confident that we can overcome whatever temporary adversity we are facing,” he added. (PNA)