PHL to grow 5% in 2011, 2012 – IMF

The International Monetary Fund (IMF) said the dip in the country’s economic growth in the first half of the year is “temporary" and will speed up in the second half to bring the full-year growth to 5 percent. The IMF team, who just concluded a visit to the Philippines, said “moderating but still rapid growth" will characterize the near-term behavior of the economy, which they estimate will expand by another 5 percent in 2012, the Fund said in a statement on Wednesday. The Bangko Sentral ng Pilipinas (BSP) was praised for appropriately normalizing monetary policy and strengthening supervision and regulation. The IMF team also noted the resilience of the financial sector whose “non-performing loan ratios are relatively low and capital adequacy high." In the IMF team’s assessment, “there is scope to adjust the pace and timing" of the BSP moves to return to its pre-global financial crisis monetary stance even if a global shock will affect the current fragile state of the world economy. The IMF also reminded the BSP to carefully manage strong capital inflows “to avoid macroeconomic and asset price volatility" or the effects of high levels of foreign exchange on liquidity and inflation. On the Aquino administration’s reorientation of spending for social and capital expenditure, the IMF team said this policy emphasis “will help to strengthen the basis for rapid and inclusive growth going forward." “An increase in the tax effort will be needed to achieve these goals," the IMF experts noted. — With Earl Rosero/VS, GMA News