Economy shows resilience, says BSP official

The economy is showing its resiliency, performing well in the first semester despite record high oil prices and rising US interest rates, the Investors‚ Relations Office (IRO) of the Bangko Sentral ng Pilipinas said yesterday.

"The past six months have been a period of steady economic improvement for the Philippines. The strong economic showing for the first half of the year clearly demonstrates the positive impact of the government’s economic reform program and rising investor confidence in the Philippines," said Rene Pizarro, IRO executive director.

The IRO said the half year economic data points to the strengthening of key indicators.

It noted a 16.8-percent year-on-year increase in total exports, fueled by an increase in demand for electronics, garments, refined copper and petroleum products.

The agriculture sector which makes up a fifth of the country’s economic output grew 5.1 percent buttressed by record rice and corn yields as well as improved fisheries output.

On the finance side, the country’s foreign reserves totaled $21.1 billion which reflected improving external accounts and consistency with international reserve adequacy benchmarks.

At the same time there was a $2-billion balance of payments surplus, a result of robust remittances from overseas Filipino workers, foreign investments and rising exports.

The IRO also noted a 52.6-percent rise in net foreign direct investment inflows.

The better-than-expected performance in the first semester prompted government agencies to adjust expectations on several indicators, among which are merchandise exports will grow 10 percent from an earlier target of eight percent while OFW remittances will rise by 11 percent.

Moreover, government is seen to also revise its full year deficit target of P125 billion.

The IRO noted that investment banks such as Merrill Lynch, ING, JP Morgan and Nomura have kept their overnight recommendation on sovereign debt on the back of improving economic fundamentals.