Economic growth of 6 percent possible despite budget impasse: RCBC


Posted at Mar 14 2019 11:42 AM

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MANILA - The Philippine economy can grow at the 6-percent level this year despite a delay in the passage of the 2019 national budget, with cooling inflation likely to pave the way for a reduction in interest rates, an economist said Thursday.

Economic managers on Wednesday warned that the impasse over the budget could slow gross domestic product growth, which averaged 6.2 percent in 2018.

Inflation is expected "to ease some more" to 2 or 3 percent for the rest of the year, said Michael Ricafort, head of RCBC's economics and research divisions .

"The biggest story remains to be the easing inflation as well as the accompanying easing of interest rates, Ricafort said, adding an expansion at the 6 percent level is "still very much reasonable."

"There are expectations for possibly monetary easing by way of cut in key policy rates and RRR so that’s going to have a positive impact on the economy," he said.

In a worse-case scenario, growth could slow to below 6 percent, he said.