Friday, January 09, 2009 Editorials: Positive economic outlook
WHEN everything is taken in its proper perspective, the economic prognosis of the current year takes on a more positive outlook.
There is the report that the national treasury may reduce interest rates anytime this year, which would encourage increased investment and the opening up of new business ventures.
Government assumed that bellwether 91-day treasury-bill rate would average 5 and 7 percent this year when it drafted its budget program for 2009.
But the assumption, as it appears now, has become rather conservative.
The assumption, the national treasury avers, may even still fall below the conservative range “because of decelerating inflation.”
The interest rate reached 7 percent last year when the annual inflation “hit a 17-year high of 12.5 percent.”
However, during the T-bill auction last December 8, the interest rate “declined a bit toward the end of the year and settled at 6.122 percent,” thus indicating “the outlook this year is better.”
Indicators
On top of this the Bangko Sentral ng Pilipinas reported a “record $37.1 billion in foreign reserves despite the large outflow of ‘hot money’ due to the food crisis and the global financial turbulence that led to the peso’s decline.”
The gross international reserve (GIR) is a key indicator of a country’s ability to cover foreign exchange needs.
As of the other day, the BSP reported that the Philippines GIR “increased by $300 million compared to the official foreign exchange stock as of end 2007…Supported by
the seasonal surge in remittances from abroad, the GIR level in December likewise improved from the end November level of $35.3 billion.”
The BSP said the full year increase was due to foreign exchange inflows and earnings from investments abroad.
Optimism
Then there is the quite optimistic outlook of the export sector in the home front that in the third and fourth quarters of the year, the demand for Philippine products abroad will rise, indicating a positive development of the country’s economy.
The same optimism keeps the real estate industry players’ spirit high, anchored on the belief that truly “great opportunities come in difficult times.”
On the whole, the economic outlook of 2009 appears to be moving in inverse direction to the rather negative political circumstances it has taken in the first week of the year.
The positive economic figures of the BSP and the national treasury augur well for the nation’s economic life in the next 12 months.
