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PHL GDP could grow 6.0% in 2016 – IMF

The International Monetary Fund (IMF) expects the Philippine economy to grow by 6.0 percent this year, driven by strong demand.

“Real GDP (gross domestic product) is projected at 6.0 percent in 2016 and 6.2 percent in 2017, driven by continued strong domestic demand offsetting weak net exports,” Chikahisa Sumi, head of the IMF Mission in Manila last week, said in a statement emailed Wednesday.

Data earlier released by the Philippine Statistics Authority (PSA) revealed that total merchandise exports for 2015 dipped 5.6 percent to $58.648 billion from the previous year’s $62.103 billion.

“The Philippine economy has performed remarkably well in the face of a weaker external environment and global financial turbulence in 2015. Despite a large drag from net exports, real GDP growth remained robust in 2015 at 5.8 percent,” Sumi said.

The country’s 5.8-percent GDP growth in 2015 was a dip from 2014’s 6.1 percent.

Given this, the IMF has dubbed the country’s economic outlook as “favorable,” albeit subject to increased downside risks such as the lower growth in China and the region, higher global financial volatility and capital outflows, and weather-related disruptions.

“However, the Philippines’ capacity to respond if these risks materialize is substantial given its ample reserves and policy space, both monetary and fiscal,” Sumi said.

The Philippine monetary policy has remained on hold since late 2014. In its latest meeting last week, the Monetary Board decided anew to keep the central bank’s policy rates unchanged given the country’s “manageable inflation dynamics and robust growth conditions.”

According to Sumi, the country’s monetary conditions remain supportive of growth.

“Over the medium term, a continuation of prudent macroeconomic policies and good governance would be critical to sustain investor confidence and the growth momentum,” he added.

“To support growth, structural reforms will also be needed to address structural issues centering around the low rate of national investment, opening up the economy to greater competition and foreign investment, and high rates of poverty and inequality,” Sumi said. — Jon Viktor D. Cabuenas/BM, GMA News