MANILA - The Philippine economy will likely expand more than 5 percent this year and by around 5 percent next year as a result of sound fiscal and monetary policies, International Monetary Fund Managing Director Christine Lagarde said on Friday.
"I know that growth in 2012 will be way in excess of 5 percent and we're certainly looking forward to 2013 being in the range of 5 percent as well," Lagarde told reporters in Manila.
"This year, 2012, at a very difficult time because of the financial crisis in other parts of the world, the Philippines is probably the only country for which we have increased the growth forecast, as opposed to other places in the world where we actually decreased our forecasts," she said.
As of October, the Fund had projected growth of 4.8 percent for the Philippines in 2012 and 2013, according to its website. In July, the IMF raised its 2012 growth forecast for the Philippines to 4.8 percent from its March forecast of 4.2 percent.
The Philippine central bank has cut its policy rate by a total one percentage point this year to a record low of 3.5 percent in order to boost growth amid weak external demand and manage capital inflows that have pushed the peso to near five-year highs against the dollar.
To stimulate domestic demand, the government has stepped up spending this year on social services and public infrastructure even as it sought to narrow the budget deficit and manage the country's debt. Its efforts have been rewarded with credit rating upgrades, and analysts expect the country to attain an investment grade rating in the next 12 months.
In June, the Philippines extended a $1 billion loan to the IMF as part of its nearly $460 billion crisis-fighting war chest. That was Manila's biggest loan to the IMF after it fully paid its debts in 2006 to end four decades of debtor-nation status with the Fund.