In the first quarter, the Philippines economy surpassed expectations, bolstering the case for the central bank to shift its focus to combating one of Southeast Asia's fastest-growing inflation rates.
According to the Philippines Statistics Authority, gross domestic product increased 8.3 percent from a year ago in the three months through March, compared to a median projection of 6.8 percent rise in a Bloomberg survey. In the same quarter of 2021, the economy contracted by 3.8 percent, according to revised figures.
The Bangko Sentral ng Pilipinas (BSP), the country's central bank, meets on May 19 amid increased anticipation of an interest rate hike to curb rising prices that, if left unchecked, might threaten the country's economic recovery.
“This robust economic recovery coupled with above-target inflation points to policy normalization from Bangko Sentral ng Pilipinas,” said Nicholas Mapa, senior economist for the Philippines at ING, as quoted by Aljazeera.com in a note.
"Philippines BSP Governor Diokno has kept interest rates constant in order to aid the country's economic recovery. However, with GDP now back to pre-Covid levels and inflation picking up, we fully expect the BSP to raise policy rates at its meeting on May 19th next week."
The Philippines economy is anticipated to increase by 8% this year, according to Standard Chartered Bank experts, following a strong first quarter.
Standard Chartered Chief Economist for Southeast Asia and India Edward Lee and economist Jonathan Koh said in a study that the firm had boosted its Philippines GDP growth prediction to 8% in 2022 from 7.5 percent earlier.
The forecast is comfortably within the economic managers' 7-9 percent aim.
With those figures, the Philippines will have one of the highest GDP growth rates in the world in 2022. Expectations of interest rate hikes in June, as well as the country's newly-elected president, will be the next market movers.]
Source: Bloomberg.com, Aljazeera.com, bworldonline.com
