BSP: Domestic demand to buoy PHL economy

Strong domestic demand will likely buoy the Philippines amid the recent credit-rating downgrade of the US by Standard & Poor's as well as the debt concerns in Europe, the Bangko Sentral ng Pilipinas (BSP) said Friday. BSP Assistant Governor Ma. Cyd Tuano-Amador told reports robust domestic demand will remain the country’s main growth driver. "The underlying forces for domestic demand… This internal buffer should enable us to ride through this very rough waters," Tuano-Amador said. The official pointed out that respondents to the BSP's 3rd Quarter Business Expectations Survey (BES) believe that economic growth would continue to be favorable this second half of the year. "If the confidence indices for both the third and fourth quarters are trending up, then we also expect the trend growth for the second half of the year to be quite favorable also," she added. Businessmen turned more optimistic in the third quarter of the year after the business optimism index fell for two straight quarters under the Aquino government, according to the survey. After falling to 47.5 percent in the first quarter and 31.8 percent in the second quarter from a record high 50.6 percent, the recent survey showed the business confidence index improved to 34.1 percent for the current quarter and 53.9 percent for the next quarter. US credit downgrade Tuano-Amador clarified, however, the bulk of the responses to the survey — conducted between July 1 and August 17 — were received in late July, which means the credit downgrade of the US was not factored in. "To a large extent, bulk of the responses did not incorporate yet what was happening including the significant [changes] that were happening in the global economic scene," Tuano-Amador said. "It could have altered it a bit, but the primary driver for growth is really domestically-driven, giving us some comfort and buffer," she added. — JMT/VS, GMA News