NUSA DUA, Indonesia, Oct 10 (Reuters) - The Philippines expects economic growth to recover to 7-8 percent target next year despite global uncertainties, as it pushes ahead with massive infrastructure spending plans, the country’s budget secretary said on Wednesday.
Benjamin Diokno said the gross domestic product (GDP) growth would be back to targeted level next year, mainly bolstered by President Rodrigo Duterte’s $180-billion infrastructure building campaign.
“We are confident that we would be back on track next year,” Diokno told Reuters. “We are very positive that our “Build, Build, Build” program will sustain growth of around 7 percent for the next 10 years.”
In the second quarter, annual growth slowed to a near three-year low of 6.0 percent, leaving it set to undershoot the government’s target of 7-8 percent for this year.
The International Monetary Fund and the Asian Development Bank have trimmed their 2018 growth forecasts for the Philippines. The IMF expects 6.5 percent expansion while the ADB foresees 6.4 percent.
The weak peso has also helped lift inflation, which in September reached a near-decade high of 6.7 percent.
Diokno said the current high inflation was “transitory” and was mainly driven by high oil prices. Citing the IMF and ADB forecasts, he said the inflation would reach targeted level of 2-4 percent next year.
Speaking to Reuters in a separate interview, Diwa Guinigundo, deputy governor of Bangko Sentral Ng Pilipinas, the country’s central bank, said the peso’s fall to near 13-year lows against the U.S. dollar was due to global factors including U.S. interest rate hikes and the U.S.-China tariff war.
“I think our currency has some fundamental bases to remain stable and strong,” he said.
The deputy governor also said that monetary policy had a “ very strong tightening bias” aimed at bringing inflation down to a 2-4 percent target range. (Reporting by Sumeet Chatterjee and Fransiska Nangoy; Editing by Simon Cameron-Moore)