THE prospects of the country’s economy this year have remained bright, according to some observers.

A National Statistical Coordination Board report said that based on leading economic indicators, gradual economic recovery will be seen in the country, with the largest positive contributors being tourist arrivals, power consumption, new businesses, etc.

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This was sort of affirmed the other day when the economist of a British banking giant was reported as seeing “the Philippines growing at a much faster pace this year on the back of strong remittance inflows and election related spending.”

But he felt that our Central Bank should “tighten monetary policy soon in order to curb the emerging pressures on consumer price.”

Growth

He foresees the Philippines posting a higher gross domestic product (GDP) growth of 4.2 percent compared to 1.1 percent in 2009, even better than the “the market consensus forecast of 3.6 percent.”

But the growth rebound would not necessarily benefit government’s tax collections.

Thus, the British economist says the next president should reform the tax system to prevent runaway budget deficit.

Another positive note about the nation’s 2010 economic prospects is the report that the country ended 2009 with a balance of payment (BOP) surplus of $5.29 billion.

This was an increase considered to be “a steep climb from only $89 million the previous year” thus prompting our monetary officials to believe that our country’s external liquidity has remained unharmed by the global turmoil that other Asian countries suffer.

The surplus exceeded the earlier projection of $4.9 billion of the Bangko Sentral ng Pilipinas (BSP).

Good start

The implication of BOP surplus points to increases in the gross international reserves (GIR), which is the country’s total reserves of foreign currencies used to fund imports, to service foreign debts, and other expenditure requirement involving foreign currencies.

In effect, this translates into an affirmation of this nation’s comfortable economic outlook.

The BSP governor said that the increase in the BOP “was partly boosted by the continued surge in remittances from Filipinos overseas and income of the central bank from its investments in foreign currency denominated assets.”

It is, in a way, a jolly good start.