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FARMING. A farmer plows a rice field using a mechanized tractor to prepare the land for the next planting cycle in August, in Baliwag, Bulacan, on July 10, 2022.
Jire Carreon/Rappler
Former Bangko Sentral ng Pilipinas deputy governor Diwa Guinigundo says the economy was projected to be worth nearly P80 trillion by 2036 before the COVID-19 pandemic
MANILA, Philippines – The Philippine economy needs to grow at least 9% until 2028 to return to its pre-pandemic trajectory, a former Bangko Sentral ng Pilipinas (BSP) official said on Wednesday, March 12.
According to ex-BSP deputy governor Diwa Guinigundo, the Philippine economy would be worth up to P60 trillion by 2036 if it achieves the government’s growth target of 6% to 8% annually.
Prior to the COVID-19 pandemic, the economy was projected to be worth nearly P80 trillion by 2036.
Guinigundo named several risks that could threaten the country’s economic growth, such as fiscal and debt sustainability, food security, and political turmoil.
The former BSP deputy governor said that the higher budget deficit and the pandemic led the Philippines to borrow more, with sovereign borrowings crossing the P16-trillion mark in 2024.
“If external debt continues to grow, that could compromise fiscal and net sustainability,” he warned.
Guinigundo also said the 2025 national budget fails to fund crucial projects that could help the Philippines meet its development goals. (READ: [In This Economy] Breaking down Marcos’ 2025 budget dilemma)
While he acknowledged that the Philippines’ tax administration has improved, the government can only yield so much from tax collection and “squeezing” government-owned and controlled corporations (GOCCs) for more dividends.
“This is after Congress forced the state banks and other GOCCs to contribute to the Maharlika Investment Fund,” he said.
Good governance key to economic growth
For the economy to further grow, Guinigundo urged the government to capitalize on the country’s young working population and participate in global value chains that allow economies to industrialize.
He also suggested modernizing the country’s agriculture sector and strengthening cooperatives.
“People have always argued that cooperatives have never worked in the Philippines, but there’s always a chance. There’s always a chance that if we go by a cooperative mode, we can get all the farmers to get together and do farming in a cooperative way,” the economist said.
Amid former president Rodrigo Duterte’s arrest and turnover to the International Criminal Court, Guinigundo pointed out that a critical civil society can also play a part in easing market worries.
In an interview on TV channel One News, Guinigundo also noted that civil society must have “the capacity to screen and discern actual political noise and the noise that can disturb markets.” – Rappler.com
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