Forbes: Duterte's 'Build, Build, Build' Gives PH Bright Future 🇵🇭

President Rodrigo Duterte could turn the Philippines into the land of easy money that will end up financing his ambitious Build, Build, Build agenda, according to Panos Mourdoukoutas of Forbes, 

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 it 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.

READ: Bloomberg: There are Now LESS Filipinos in Poverty 🇵🇭

At least that’s the interpretation of financial markets that have been unsettled by Diokno’s appointment.

Source: Philippines CPI / KOYFIN

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.

READ: The U.N.: The Golden Age of Philippine Infrastructure 🇵🇭

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 Tradingeconomics.com. 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 villains.

To be fair, inflation has been coming down recently. Consumer prices rose at 3.8% in February of 2019, down from 4.4% in the previous month.

Source: Philippines CPI / KOYFIN

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 shift s from a restrictive policy of fighting inflation to an accommodating policy that will bring it back.

READ: U.S. Gov't backs PH's Drug War 👊🏾🇵🇭🇺🇸

Workers walk over the newly dried concrete and secure linking steel bars of the 5.58 kilometre elevated highway in Caloocan City, metro Manila, Philippines. REUTERS pic

ALSO READ: Forbes: The Philippines Is Ready To Rise Again 🇵🇭

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Source: Forbes