New York Professor says that under Duterte could turn Philippines Into The Land Of Easy Money And Build, Build, Build

New York Professor says that under Duterte could turn Philippines Into The Land Of Easy Money And Build, Build, Build

The administration of President Rodrigo Roa Duterte is not all “Drug war”, this can be attested by the fact the President’s economic team has laid down a massive undertaking the Philippine government has not seen ever, until now.
The current economic team of Duterte has implemented the so called Golden Age of Infrastructure thru its “BUILD, BUILD, BUILD” projects which will provide more growth spurts for the country now on its implementation and a lot of years more when its completed.

New York professor Panos Mourdoukoutas of Forbes Magazine wrote a very insightful article about the economic policies of the current administration and the repercussion of having an ally of the Duterte as the top banker of the Bangko Sentral ng Pilipinas (BSP).

President Rodrigo Roa Duterte (photo credit to owner)

For purposes of public knowledge, truthfulness and clarity we have fully quoted said article for the convenience of our readers, below.

Duterte Could Turn Philippines Into The Land Of Easy Money And Build, Build, Build

President Rodrigo Dutere could turn the Philippines into the land of easy money that will end up financing his ambitious Build, Build, Build agenda.

That’s a massive construction plan that is expected to drive the country’s growth for years to come , and create jobs for the Philippines labor force.
Early this week, President Duterte appointed political ally Benjamin Diokno to head of the country’s central bank, Bangko Sentral ng Pilipinas (BSP).

That’s unusual for the Philippines and any modern democracy, where the tradition is for neutral appointments. And i t could mean the end of the independence of the country’s central bank, and the paving of easy money in the form of low interest rates and runaway government deficits.

At least that’s the interpretation of financial markets that have been unsettled by Diokno’s appointment.
For years, an independent (BSP) has been a big asset for the Philippines economy. It provided the macroeconomic conditions to let the Philippines economy grow at rates that parallel those of China.

High growth rates, in turn, helped elevate the country’s standard of living.  The Philippines’ per-capita GDP was last recorded at an all-time high of $2,891.36 in 2017, according to . That’s well above the average of $1,627.98 for the period 1960-2017.

If it comes true, the end of BSP independence could change the game for the Philippines economy. It could bring back macroeconomic instability in the form of soaring government deficits, and inflation--one of the country’s old villain s .

To be fair, inflation has been coming down recently. Consumer prices rose at3.8% in February of 2019, down from 4.4% in the previous month.
That’s thanks to restrictive policies of BSP last year. But the situation could change if BSP’s independence is compromised, and the new leadership shifts from a restrictive policy of fighting inflation to an accommodating policy that will bring it back.

Inflation will add to the country’s other problems -- l ike corruption, which is getting worse, according to  Transparency  International. Then there’s   the ongoing drug war, which continues to divide up the country.
And there are Duterte’s South China Sea flip-flops, which raise rather than reduce the prospect of war in the region.

Inflation -- together with social unrest, corruption, and violence -- has suspended Philippines economic progress before, and it will do it again, if they aren’t addressed effectively.

That’s why investors have every reason to be concerned with Duterte’s unusual choice for a central bank chief.

What can you say about this?

Share us your thoughts by simply leaving on the comment section below. For more news updates, feel free to visit our site often.

Stay updated with today's relevant news and trends by hitting the LIKE button.

Thanks for dropping by and reading this post.

Report from FORBES

Post a Comment