14 September 2015 - “The outlook for the Philippine economy remains favorable despite uneven and generally weaker global growth prospects,” the International Monetary Fund (IMF) stated in a press release after the conclusion of the 2015 Article IV Consultation between the Philippines and the IMF on August 26.
The IMF’s Title IV Staff Report noted the Philippines’ continued strong economic growth, which is in line with the economy’s potential growth of 6.5%.
The IMF’s Executive Directors, agreeing with the appraisal of the IMF staff report, commended “the Philippine authorities’ prudent macroeconomic management,” which has helped contribute to strong economic growth and for having “set the stage for favorable growth prospects despite external headwinds.”
Philippine Ambassador to the United States Jose L. Cuisia, Jr. expressed appreciation for the effort of the IMF staff and the assessment of the Executive Board.
“Our economic performance can be credited to the good governance model of President Benigno S. Aquino III under the Daang Matuwid or the ‘Straight Path,’ as well as the sound macroeconomic management implemented by Philippine economic managers,” the Ambassador said.
The following are the notable findings in the Staff Report:
• IMF recognized that internal revenue increased as a share of GDP due to improvements in the Philippines’ tax administration.
• The Philippines’ economic growth is expected to pick up slightly in 2015 to 6.2% as lower commodity prices lift household consumption and improved budget execution raises public spending. The IMF added that over the medium term, the country’s economic growth is projected at 6.5%, which is in line with the Philippines’ potential growth. Public and private investments are projected to lead economic growth, with public infrastructure spending and expansion of PPP projects crowding in private investments.
• IMF added that despite a favorable outlook, factors such as global financial volatility, weak budget execution, and weather-related conditions tilt risks toward the downside. However, the IMF noted that Philippine authorities are well equipped to respond as needed with suitable policies should any of these risk scenarios materialize, particularly given the strong fundamentals, ample policy space, and strong foreign reserve position.
“As our country continues to reach new heights in political and economic affairs, the Philippine government remains committed to enhancing inclusive growth,” Ambassador Cuisia emphasized. He specifically cited the government’s continued commitment to roll out reforms to improve revenue collection efficiency.
Also highlighted in the Staff Report is the Philippine Government’s augmentation of growth-inclusive budgetary expenditures. These programs include the Department of Social Welfare and Development’s conditional cash transfer program, the expansion of the Philippines’ education program from Kindergarten to the Grade 12 level, and expansion of the health insurance program to cover the poor and informal sectors.
Under Article IV of the IMF's Articles of Agreement, the IMF holds annual bilateral discussions with member governments to assess each country’s economic health and determine any potential financial concerns. The Philippines’ Country Report and Article IV Consultation Press Release can be accessed at http://www.imf.org/external/pubs/ft/scr/2015/cr15246.pdf. END