Economic Growth Called Priority for Philippines

19.02.2012

Manila

Philippine Finance Secretary Cesar Purisima Saturday said he viewed encouraging economic growth a key policy priority for the country's government and central bank this year, saying there could be room for further interest rate cuts because of continuing economic uncertainty in Europe and the U.S.

In a telephone interview with The Wall Street Journal, Mr. Purisima, who is the key economic policy point-man for President Benigno Aquino III, also said that the Philippines' strengthening fiscal position presents a strong argument for international credit rating agencies to continue upgrading the Philippines' ratings.

"Inflation is not the main concern right now, but growth is," said Mr. Purisima, pointing to weak demand for exports from the European Union as a particular source of concern. "There are factors that would argue for easing interest rates, but I leave that up to the central bank of the Philippines to decide on. I'm confident they will make the right decisions."

The Bangko Sentral ng Pilipinas, the country's central bank, cut its main policy rate for the first time in two-and-a-half years last month, reducing it by 25 basis points to 4.25%. Expectations are growing that the central bank will further cut rates in March after the rate of inflation continued to slow in January. The central bank forecasts average inflation of 3.1% in 2012 after falling to 3.9% on year in January.