The Philippine government said geopolitical tensions with Beijing have not affected the regional economy and it remains open to working with Chinese investors.
Economic Planning Secretary Arsenio Balisacan has said that tensions between the Philippines and China over claims in the South China Sea have not significantly affected the economy, even as the Philippine Statistics Authority reported first-quarter economic growth of 5.7 percent, slightly below a Bloomberg survey estimate of 5.9 percent.
Although the Philippines halted Chinese funding for three rail projects last year due to financing issues, Balisacan stressed that the Philippines is not anti-China and there are no efforts to harm Chinese investors in the Philippines, especially private investors, solely because of the South China Sea issues.
According to the SCMP, the Philippine economy has shown resilience with the fastest expansion in Southeast Asia last year. However, new challenges have emerged with interest rates at their highest in 17 years and persistent inflation affecting domestic activity. Consumption, a key economic driver contributing more than 70 percent of output, grew only 4.6 percent in the last quarter, the lowest growth since the onset of the economic crisis.
The Philippine economy's growth in the last quarter may put pressure on the Philippine Central Bank to keep the benchmark interest rate at 6.5 percent. Aggressive monetary tightening is being implemented to curb inflation, with government spending increasing by only 1.7 percent and investment by 1.3 percent quarter-on-quarter.
This was due to high food prices and heat waves that slowed consumption. Balisacan revealed the information in a briefing in Manila.
Nevertheless, Balisacan remains optimistic about the Philippines' economic growth. He predicts a faster pace of growth this quarter, which is expected to drive the achievement of the growth targets by 2024. However, this could be disrupted if the government's efforts to control inflation are not successful.
