Need for growth drivers seen

THE Bank of the Philippine Islands (BPI) remains cautiously optimistic on the country’s economic recovery as it sees encouraging progress in consumer spending, remittances, and BPO revenues, but said that policymakers must look at diversifying the economy’s growth drivers to provide a greater cushion for future shocks.

“The long-term prospects of the economy are good overall. We believe that the economy will con- tinue to grow in the coming years at a healthy pace, not only this year, because of our growth drivers,” said Rafael Alfonso Q. Manalili, BPI Global Markets economist.

But he noted that new growth drivers must come to the fore to ensure a more robust and faster economic recovery, citing the vulnerability of the current structure of the economy.

“The Philippine economy is a consumer-driven economy, and we have a strong consumer base. It’s an asset that has allowed us to grow by at least 6% in the past decade, but this makes us vulnerable in the context of a pandemic,” he said.

Household consumption and services were the ones most affected by the pandemic as people stayed at home for quarantine.

“The pandemic has taught us that we need to diversify our growth drivers. We need to go beyond household consumption and services so that we can have an additional cushion in case another shock happens. This will allow us to grow faster and will protect us from external shocks like the COVID-19 pandemic,” Manalili said, adding that the government should also fast-track infrastructure development to attract more investments.

The GDP of the Philippines declined by almost 10% during the global health crisis, the biggest

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