BSP official: PH economy won't overheat

ABS-CBN News

Posted at Mar 04 2014 06:23 PM | Updated as of Mar 05 2014 02:23 AM

MANILA, Philippines - The Philippine economy's strong performance won't lead to overheating, according to a central bank official.

BSP Assistant Governor Cyd Amador said the current growth trends should not be a cause of concern since it "reflects the dynamism of the economy."

"If we're able to build on that by continuing reforms... you'd expect that this growth rate should not lead to overheating pressures or inflationary pressures," she said.

The Philippine economy grew by 7.2% in 2013, one of the fastest in Asia.

"Overheating happens when the current level of production in the economy is getting too strong relative to its potential such that it will translate to inflationary pressures or financial assets excesses or prices - consumer prices and asset prices - going to excessive levels," Amador said.

"We're convinced that there are fundamental reasons why the productive capacity of the economy has risen over what it used to be."

The Philippines' average annual growth had previously been 4-5%, and is now at 5-7%. Capital formation in the country has risen, while more people have been employed.

"It's not only capital and labor becoming broader but also becoming productive... Also, you have better institutional dynamics: you have better competitiveness, you have better headway in terms of doing business," she said.

This year, the government is targeting 6.5% to 7.5% growth.