BSP optimistic Philippines will report positive economic growth in Q2

The Philippine economic growth will likely return to positive territory in the second quarter of the year given the base effects in 2020, the Bangko Sentral ng Pilipinas (BSP) said Wednesday.

In a virtual briefing, BSP Deputy Governor Francisco Dakila, Jr. said the economy will likely be supported by key measures which were recently passed by the government.

"As to the trajectory of growth, we expect this to turn positive beginning the second quarter of the year, again, mostly due to the positive base effects," he explained.

The Philippine economy posted a record-low -16.9% growth in the second quarter of 2020 when the strictest lockdowns were set in place across the country.

"The recovery path going forward is likely to be supported by the implementation of key pieces of legislation including the CREATE and FIST Laws," said Dakila.

President Rodrigo Duterte in March signed into law the Corporate Recovery and Tax Incentives for Enterprises (CREATE), which reduced corporate income tax to 25% for corporations and 20% for micro, small, and medium enterprises.

Meanwhile, the Financial Institutions Strategic Transfer (FIST) Law was enacted in February, allowing corporations to invest in or acquire non-performing assets (NPAs) from financial institutions, and engage third parties to manage and dispose of such assets.

The inter-agency Development Budget Coordination Committee (DBCC) has set a 6.5% to 7.5% economic growth target this year, but this will be revisited when economic managers meet this month to discuss the latest developments.—AOL, GMA News