More warnings on “overheating” Philippines economy
Another warning has been aired that the Philippine economy, one of the fastest-growing in Asia, is in risk of overheating – just shortly after the World Bank issued a similar statement.
Singapore-based ASEAN + 3 Macroeconomic Research Office (AMRO) cited inflation that had breached Manila’s four-per cent ceiling, as well as a widening current account deficit.
“Certainly, these are signs the economy is operating at full and then there are bottlenecks,” said AMRO Chief Economist Hoe Eee Khor.
“Our view is that it’s time for parties to take measures to make sure it doesn’t get overheated, by doing a bit of tightening, it’s possible for inflation to come back down and the current account to remain sustainable,” he said.
Rising consumer prices show that the Philippines, like Japan, was on a “late” business cycle, he said.
Philippine central bank deputy governor Diwa Guinigundo responded that a new tax regime and high fuel prices were behind the spike in inflation and “monetary policy doesn’t normally respond to the supply side.”
He also rejected Khor’s view that “challenges” in the current account would point to an overheating economy.
However, in mid-April, the World Bank warned that the Philippines faced “several domestic risks” such as overheating, higher inflation and climbing fiscal deficits. The bank noted that the country’s economy was growing at its potential rate and all major industries were operating at near full capacity.
The bank’s experts also stressed that more could be done to create high-quality jobs and achieve a faster growth of real wages in the Philippines, two links it said were needed to achieve higher shared prosperity.
Overall, the World Bank projected that the Philippine economy will remain strong, growing at an annual rate of 6.7 per cent in both 2018 and 2019.
Another warning has been aired that the Philippine economy, one of the fastest-growing in Asia, is in risk of overheating – just shortly after the World Bank issued a similar statement. Singapore-based ASEAN + 3 Macroeconomic Research Office (AMRO) cited inflation that had breached Manila's four-per cent ceiling, as well as a widening current account deficit. “Certainly, these are signs the economy is operating at full and then there are bottlenecks," said AMRO Chief Economist Hoe Eee Khor. “Our view is that it’s time for parties to take measures to make sure it doesn't get overheated, by doing a bit...
Another warning has been aired that the Philippine economy, one of the fastest-growing in Asia, is in risk of overheating – just shortly after the World Bank issued a similar statement.
Singapore-based ASEAN + 3 Macroeconomic Research Office (AMRO) cited inflation that had breached Manila’s four-per cent ceiling, as well as a widening current account deficit.
“Certainly, these are signs the economy is operating at full and then there are bottlenecks,” said AMRO Chief Economist Hoe Eee Khor.
“Our view is that it’s time for parties to take measures to make sure it doesn’t get overheated, by doing a bit of tightening, it’s possible for inflation to come back down and the current account to remain sustainable,” he said.
Rising consumer prices show that the Philippines, like Japan, was on a “late” business cycle, he said.
Philippine central bank deputy governor Diwa Guinigundo responded that a new tax regime and high fuel prices were behind the spike in inflation and “monetary policy doesn’t normally respond to the supply side.”
He also rejected Khor’s view that “challenges” in the current account would point to an overheating economy.
However, in mid-April, the World Bank warned that the Philippines faced “several domestic risks” such as overheating, higher inflation and climbing fiscal deficits. The bank noted that the country’s economy was growing at its potential rate and all major industries were operating at near full capacity.
The bank’s experts also stressed that more could be done to create high-quality jobs and achieve a faster growth of real wages in the Philippines, two links it said were needed to achieve higher shared prosperity.
Overall, the World Bank projected that the Philippine economy will remain strong, growing at an annual rate of 6.7 per cent in both 2018 and 2019.
