As per latest reports on Philippines economic conditions it is expected that there would be slowdown as far as national economy is concerned. However, what is encouraging for Philippines’ economic conditions is that depreciation would be still within expectations of national government.
A number of moves have been made by national government in order to improve economic conditions of Philippines. It has increased amount of expenditures to a significant extent and has been outsourcing its business activities. Amount of mining and construction for residential purposes has gone up in Philippines as well.
2009 fiscal is expected to bring not much of turbulence as far as economic conditions in Philippines are concerned. It is expected that there would be an increase of 4.1 percent in gross domestic product for 2009 fiscal. However, in first quarter of 2009 rate of growth of Philippines GDP would be 3.5 percent. Philippines government had previously estimated this rate to be within 3.7 to 4.4 percent.
Economic conditions at Philippines in fiscal 2008 were far from ideal. Growth rate of GDP had gone down to 4.6 percent from 7.2 percent in 2007 fiscal. It is being expected that rate of inflation would go down to 6.4 percent in February 2009. It would further depreciate to reach less than 4 percent as of April 2009.
Economists have noted that Bangko Sentral ng Pilipinas can still deduct its rates of interest for policies by as much as 50 basis points in first quarter of 2009 fiscal. It is expected that this interest rate deduction would be assisting weakened financial sector and overall Philippines economic conditions.
Reports on Philippines economic conditions have confirmed that rates of interest would stay flat for first quarter 2009 even if there are deductions on policy rates by Bangko Sentral ng Pilipinas. Much of this would be owing to irregularities in issuance of major corporate bonds.
It is also expected that in first quarter of 2009 fiscal exchange rate between United States dollar and Philippines Peso would continue on its downward slope. In first quarter of 2009 fiscal 1 US dollar would be worth 48.50 Philippines Peso.
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Professor of Economics & Director of the Earth Institute at Columbia University. Special Adviser to the UN Secretary-General on the Millennium Development Goals. Founder & co-President of the Millennium Promise Alliance.
Mario I. Blejer is a former governor of the Central Bank of Argentina and former Director of the Center for Central Banking Studies at the Bank of England. Eduardo Levy Yeyati is Professor of Economics at Universidad Torcuato Di Tella and Senior Fellow at The Brookings Institution.