ING Bank Manila senior economist Nicholas Mapa
MANILA – An economist projects a hike in the Bangko Sentral ng Pilipinas’ (BSP) key rates starting in the first half of 2022 following the higher-than-expected domestic growth in the third quarter of 2021.
The Philippine Statistics Authority (PSA) on Tuesday reported the 7.1-percent expansion of the economy, as measured by gross domestic product (GDP), for the three-month period ending September, higher than the -11.6 percent a year ago but slower than the previous quarter’s 12 percent.
On a quarter-on-quarter basis, growth expanded by 3.8 percent primarily due to the rebound in the services sector at 6.6 percent.
ING Bank Manila senior economist Nicholas Mapa, in a Tweet, said “upbeat growth shows that growth is possible even during lockdowns.”
“Faster growth may give @GovBenDiokno (BSP Governor Benjamin Diokno) room to adjust rates in 1h2022,” he added.
Metro Manila, which accounts for around 70 percent of the economy’s annual output, was placed under the strictest quarantine restriction, the enhanced community quarantine, from Aug. 6 to 20, 2021 due to another surge in coronavirus disease 2019 (Covid-19) infections because of the Delta variant.
The movement restriction was eased to modified ECQ (MECQ) until September 7, which allowed more people to go out of their residences and help boost economic activities.
In 2020, the pandemic resulted in the 9.4-percent contraction of the domestic economy.
With the economy experiencing the impact of the pandemic starting in the first quarter of 2020, monetary authorities decided to slash the BSP’s key policy rates by a total of 200 basis points to help ensure sustained economic activity.
Diokno vowed to keep the accommodative policy stance as long as necessary, adding economic recovery remains fragile. (PNA)
