GDP growth likely 'slightly higher' than 6 percent in Q1, says Diokno

Cathy Yang, ABS-CBN News

Posted at May 03 2019 12:54 PM | Updated as of May 03 2019 06:51 PM

GDP growth likely 'slightly higher' than 6 percent in Q1, says Diokno 1
Workers are seen atop a towering construction site where the Unified Station/Grand Central Station will rise in Quezon City, March 27, 2019. George Calvelo, ABS-CBN News

MANILA -- Bangko Sentral ng Pilipinas Governor Benjamin Diokno said the economy likely grew "slightly higher" than 6 percent in the January to March period, aided by poll spending, construction, investments and manufacturing.

Inflation in April will be "right there at 3 percent," taking into account the BSP's own 2.7 percent to 3.5 percent forecast, Diokno said in an exclusive interview with ANC.

Asked about the possibility of first quarter gross domestic product growth at around 6 percent, Diokno said, "probably slightly higher." The economy grew 6.3 percent in the previous quarter and 6.2 percent in the full year 2018.

Diokno also told ANC that a reduction in the benchmark interest rate and the reserve ratio requirement for banks was "inevitable."

A pause from the Federal Reserve "gives us some opportunity for easing," Diokno said on the sidelines of an Asian Development Bank meeting. Banks have also been "complaining" about tight liquidity conditions, he said.

GDP growth likely 'slightly higher' than 6 percent in Q1, says Diokno 2
Bangko Sentral ng Pilipinas Gov. Benjamin Diokno talks to ANC's Cathy Yang for an exclusive interview at the sidelines of an Asian Development Bank annual meeting in Nadi, Fiji. ABS-CBN News

First quarter GDP data will be released in the morning of May 9. The Monetary Board will meet on interest rates in the afternoon of the same day. It will be Diokno's second policy meeting since assuming the BSP governorship.

Diokno said he was "not worried about the supply of foreign exchange." Gross international reserves are enough to cover 7.3 months worth of imports, he said.

"Our forex is hefty and there's constant inflows from OFWs (overseas Filipino workers) plus the BPOs (business process outsourcing)," he said.

The peso-dollar exchange rate is market determined, he said. "We've not been participating for quite some time," he said.