PHL economy seen topping Southeast Asia growth again
Expectations among analysts and economists
are high: The Philippine economy will cough up another stellar performance this
year. But with cautionary ifs and buts.
For example, increased spending in
healthcare, education and social programs as well as opening the Philippines to
foreign investors are needed to sustain growth momentum in the long-run.
“The Philippines could become the better—if
not the best—stories in the next 12 months,” Matt Hildebrandt, J.P. Morgan Bank
chief Philippine economist and head of Asia sovereign credit strategy, said
during a panel briefing at the Euromoney Conferences Philippines Investment
Forum.
Credit Suisse Asset Management chief
investment officer for Asia Pacific Lena Teoh said the country is “at the crest
of momentum.”
Teoh, however, emphasized the significance of
social safety nets—like dole outs—will increase the number of Filipinos spending
more and buoying the economy.
"Social safety nets are important to sustain
consumption spending, which is important to widen the diversity of consumption
pattern," she said.
Largely driven by consumption spending, the
Philippine economy expanded by 6.6 percent last year—the fastest in Southeast
Asia.
“You'll find that institutional reforms are
most important, among those are spending in education and health which makes the
labor force more productive.” Anoop Singh, International Monetary Fund Asia and
the Pacific director.
Noting government efforts in providing social
programs, Singh said Philippine spending in these areas are “considerably less
compared to some neighbors.”
Moreover, analysts said the government needs
to yield more to foreign direct investments (FDI)—which hit $2.03 billion last
year—by opening up the economy for stronger support for growth.
"FDI is the driver of competition, innovation
and growth," said Singh.
Hildenbrandt noted the need to improve on
infrastructure and business climate to attract more foreign investments.
For local investors, Teoh said access to
credit and funding is key to expand homegrown businesses.
“There is a need to provide credit for
businesses to flourish. One way is for local businesses to issue bonds
domestically and offshore to provide wider breadth for funding,” she
said.
For the part of government, Finance Secretary
Cesar Purisima said such reforms are being made to this end.
“The goal of the President is to achieve
inclusive growth,” Purisma said. “Resources are allocated to
priorities—investment in people and investment in infrastructure.”
“In particular, on the fiscal side we need to
ensure that we improve our fiscal effort. In terms of policies, we will continue
to align it, we are open to reviewing the negative list to open the economy
without changing the Constitution,” he added. — VS, GMA News
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