Philippines can grow 6.5 percent in 2020 on 'double-headed stimulus': ING


Posted at Dec 04 2019 03:31 PM | Updated as of Dec 04 2019 04:02 PM

MANILA -- A "double-headed stimulus" of low borrowing costs and increased government spending can propel the Philippines' economic growth to 6.5 percent in 2020, ING said.

The Bangko Sentral ng Pilipinas may cut the benchmark lending rates by another 50 basis points next year as inflation is expected to "remain well-behaved" due to falling rice prices and better weather conditions compared to this year, ING said. 

The BSP will likely resume cutting banks' reserve requirements "when credit growth recovers," ING said.

Coupled with higher government spending, monetary policy easing will help the economy grow 6.5 percent in 2020 "even in the face of global headwinds," ING said.

In the fourth quarter this year, gross domestic product could grow by 6.6 percent, which will push the full year expansion to 6 on robust consumption, government catch-up spending and revitalized investment activity.

ING expects the peso "to revert to weakening bias in 2020 as current account widening is back in spotlight."