...the dynamic economy

Philippines economy defies global downturn

AsiaFirst NewsLetter
03 October 2019

With its wealth and debt indicators remaining positive, the Philippine economy is set to continue to be one of the most dynamic in the region despite a significant decline in household wealth across Asia, according to the recent Allianz Global Wealth Report. 

The report also noted that there had been a simultaneous drop in the financial assets held by private households in 2018 for the first time since the 2008 financial crisis. 

Overall, gross financial assets were down 0.4% in the emerging-market economies, with a more pronounced decline of 0.9% across Asia (excluding Japan) thanks to a 14% drop in securities, including equity and investment funds. 

The report also noted that, despite the escalating US-China trade dispute, Brexit, growing geopolitical tensions, the tightening of monetary conditions and the announced normalisation of monetary policy, the Philippine economy, however, had grown by 6.2% in 2018, with its fundamentals remaining strong despite an anticipated slowdown earlier in the year.

Commenting on this, Efren Caringal, chief financial officer at Allianz Philippines, said the country’s expected GDP growth will remain above that of many developed and developing economies, while headline inflation had dropped 1.7% in the previous month, down from 5.2% in June 2018. 

He also highlighted that deposit and loan growth in the Philippines had moderated in 2018, with consumer loans growing 11.5% against 17.2% in 2017, while deposits were up by 8.9% compared to 11.6% in 2017. 

According to Caringal, the resilience is even more remarkable given the hostile global economic environment and bodes well for short- to medium-term growth.