...the demographic sweet spot

PHL growth story isn’t a fluke, BSP’s Tetangco tells investors

 

March 28, 2012

GMA News

 

 

 

“This is not a false start, the Philippines has indeed come on its own. The growth story is not a fluke, it is the result of a series of reforms, reforms that were critically thought of and well executed." - BSP Governor Amando Tetangco Jr.

 

 

 

A series of reforms helped the Philippines weather the uncertainties from a sputtering US economy and the European debt crisis, Bangko Sentral Governor Amando Tetangco Jr. said Wednesday.

 

Tetangco told participants of the two-day Philippine Investment Forum, “The New Beginning,” sponsored by Euromoney Institutional Investor PLC, the Philippine economy is on an upward trajectory fueled by stable macroeconomic conditions.

 

“This is not a false start, the Philippines has indeed come on its own. The growth story is not a fluke, it is the result of a series of reforms, reforms that were critically thought of and well executed,” the central bank chief said.

 

In his keynote address, Tetangco said emerging market economies would continue to drive global growth.

 

“Global growth remains relatively unsteady and fragile. In fact, the global economic growth outlook for 2012 is expected to be tilting towards a further slowdown but emerging and developing countries will continue to outpace advanced economies in terms of economic growth,” he added.

 

Philippine output grew 3.7 percent last year on lower government spending and weak global demand. It grew 7.6 percent in 2010, helped by election spending.

The demographic sweet spot
 

The Cabinet-level Development Budget Coordination Committee (DBCC) sees the Philippine gross domestic product growing between 5 percent and 6 percent.

 

“While some countries are facing problems relating to their aging population, the Philippines is set to enter its demographic sweet spot. Studies have shown that extended periods of accelerated economic growth have coincided with the countries entering this period,” Tetangco said.

The Philippines is the last major Asian economy to benefit from this demographic dividend by 2015 as the median age of the country is only 22.2 years—well below other young countries in Asia, according to the United Nations.

 

“On the basis of this potential to capitalize on these demographic dividends, the Philippines is well placed to ramp up its growth trajectory,” Tetangco said.

 

This growth would be achieved in a macroeconomic environment of low inflation and monetary policy that supports expansion, he noted.

 

“We will continue to provide a sound monetary policy framework one that is finely calibrated, appropriately flexible, and well communicated to stakeholders so that inflation target is well guarded,” he said. —VS, GMA News