In the light of a slowing global economy, the Philippines' growth rate in 2019 stood at 5.9 percent, slightly below the government's target of 6 percent, dragged down by the budget impasse that led to delays in the implementation of government programs and projects in the first half of the year. It was the slowest growth registered in eight years. For the past seven consecutive years starting 2012, the Philippine economy grew by at least 6 percent per year. Nevertheless, 2019 was still a good year for the Philippines as the economy expanded by 6.4 percent during the fourth quarter of the year.
After accelerating to 5.2 percent the previous year, the country's inflation rate averaged at 2.5 percent, falling within the government's target of two-to-four percent, amidst cheaper oil and rice prices as well as a strong peso.
Our external payment position became stronger as the country's foreign exchange reserves reached a record high of $87.8 billion in 2019, 10.9 percent higher than the $79.19 billion recorded in 2018, due to strong foreign exchange inflow.
We also enjoyed a surplus in our Balance of Payments amounting to $7.84 billion, the highest in seven years, a reversal of the P2.31 billion deficit recorded in 2018.
The peso emerged as the second best performing currency in Asia after the Thai Baht, after six straight years of depreciation. The local currency gained 3.7 percent to settle at P50.63 to $1.00 from P52.58 in 2018.
The stock market index ended the year at 7,815.26 points. Year-to-date, the main index gained 4.7 percent, coming from 2018's volatility caused by the high inflation environment. It marked a modest improvement from 2018 closing at 7,466.02 points, which was then the worst decline in eight years.
The Bangko Sentral ng Pilipinas cut benchmark rates by a total of 75 basis points in 2019, partially unwinding a tightening cycle that saw rates jump by 175 basis points in 2018. It also reduced the reserve requirement ratio by 400 basis points for big and medium-size banks, as well as for small banks, to free up much needed liquidity to boost economic activities.