The Philippine economy has so far shown a high degree of resilience to the economic crisis that has hit the planet, both in developed economies and in the economies of developing countries due to the Covid-19 pandemic. The stability of the Philippine currency against the $USD shows its due to the truth as to the resilience of the country’s economy.
by Thanos S. Chonthrogiannis
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The causes of the most important achievements in the economy
1. The fall in the price of oil and the fall in consumption in the country due to measures to the response to the Covid-19 pandemic and the reduction of tourism and tourism exchange. As a result, the volumes of energy imports and the accompanying costs were reduced.
2. At the same time, The Bangko Sentral ng Pilipinas (BSP)cut interest rates to boost financial/credit flow into the economy, helping companies to support their production further by reducing the loan costs they serve. Despite the reduction in borrowing and lending rates, interest rates in the Philippines are higher (2.25%, July 20) than the interest rates of rich and developed countries creating the right conditions to attract more and more capital from abroad.
3. The political stability that the government of Philippine President Rodrigo Duterte has given the country the designation a safe investment haven.
4. Remittances sent from abroad by millions of Filipino workers to their country (in their families), creating a stable financial cash-flow regardless of the state of the country’s economy, providing a permanent cash-flow of foreign exchange.
In times of economic downturn, this cash-flow of foreign exchange constitute a fixed income from abroad for the Philippines.
The largest proportion of Filipino workers abroad has turned in recent years and works in the healthcare services sector, rather than in industries such as construction, commercial shipping and as was the case twenty years ago.
This shows that healthcare workers have a greater working longevity in their jobs than other compatriots working in other industries.
5. The financial management of public finances has paid off in recent years. A decline in budget deficit coupled with rapid economic growth has driven the Public Debt/GDP index to 41.5% in 2019 from 75% in the early 2000s.
6. The External Debt of the Philippines (78959,57 USD milion, 2019) is lower than in the other neighbouring countries (Malaysia, Indonesia, Thailand).
7. The Central Bank of the Philippines (BSP) has raised $93bn in foreign exchange-an extremely high liquidity cushion that can be used to support the national currency in difficult times but also to provide uninterrupted liquidity to an increased volume of imports into the economy.
8. The strengthening of the Philippine currency makes exports as expensive as remittances sent from overseas by Filipino workers gain less value.
We can conclude that the economic course of the Philippines is a very pleasant event proving its economic stability that investors around the world deserve to take it very seriously as a destination for their investments.
