IMF revises up Philippines 2020 growth forecast to 6.3%

MANILA, Nov 18 (Reuters) - The Philippine economy was likely
to grow faster than previously thought next year, the
International Monetary Fund said on Monday, adding that the
government had room to strengthen expansionary policies if any
risks to growth emerged.
The Philippines' economic growth rate is seen accelerating
to 6.3% in 2020, the IMF said, faster that its 6.2% forecast in
October and picking up from its of 5.7% projected growth this
year.
"The medium-term economic outlook remains favourable,
especially if the strong structural reform momentum continues",
the IMF said in a statement issued following its regular
"Article 4" review of the Philippine economy.
Inflation this year is projected at 1.6%, before edging up
to 3.0% next year, the IMF said. Both estimates, which were
lower than previous forecasts, are well-inside the central
bank's 2%-4% target for this year and next.
A pick up in government spending, which had been delayed by
the approval of the 2019 budget, lifted economic growth to 6.2%
in July-September, accelerating from 5.5% in the previous
quarter. On Monday, Philippine lawmakers passed on third reading a
bill extending the life of the 2019 budget up to end of next
year to make up for the delay and allow the government to fund
priority projects.
The Philippines remains one of the fastest-growing economies
in Asia, but risks stemming from ongoing U.S.-Sino trade
tensions and policy uncertainty could cloud the country's growth
outlook, the IMF said.
"The Philippines has space for an expansionary policy
response should downside risks materialise," IMF said.
Economists expect the Philippine central bank to resume
easing monetary policy next year after three interest rate
PHCBIR=ECI cuts this year to buffer the economy against global
headwinds. Cooling inflation has allowed the central bank to cut
interest rates by a total of 75 basis points (bps) this year,
reversing some of last year's rates hikes which totalled 175
bps.
The central bank also reduced the amount of cash that banks
must hold as reserves by 300 basis points, with another cut of
100 bps to take effect in December, bringing the ratio to 14%.