PH is Asia’s Next Economic Powerhouse

The Duterte Administration’s cabinet members, headlined by Budget Secretary Benjamin Diokno, Finance Secretary Carlos Dominguez, Socioeconomic Planning Secretary Ernesto Pernia, Bangko Sentral ng Pilipinas (BSP) Governor Nestor Espenilla, Jr., and Executive Secretary Salvador Medialdea, showcased the promising investment opportunities in the Philippines to a host of business groups and investors during the “Philippine Economic Briefing” held in Singapore on Tuesday, August 15.

Among the private sector representatives in attendance were Jaime Augusto Zobel De Ayala, Chairman and CEO of Ayala Corporation; Ronie Ganguly, portfolio manager of Asian Credit Blackrock Singapore Limited; and George Barcelon, President of the Philippine Chamber of Commerce & Industry.

On the back of sound macroeconomic fundamentals and a robust growth trajectory, the Philippine economy is dubbed as the next economic powerhouse of Asia with GDP growth targeted to increase by 7 to 8 percent in the medium-term. Given this rate of economic expansion, the Philippine economy is poised to achieve upper-middle income status by 2022 with per-capita Gross National Income (GNI) of at least $5,000 from $3,550 in 2015.

A major source of optimism for both the public and private sector is the “Build Build Build” Program of the Duterte Administration. Upgrading infrastructure is seen to boost economic productivity and enhance connectivity that will cut down the cost of doing business. Hence, the government’s emphasis on public infrastructure will undoubtedly create economic opportunities, attract investments, and generate prosperity for all Filipinos.

The expansionary fiscal policy, highlighted by the increase in the planned deficit from 2 to 3 percent of GDP in the medium-term, has made the heavy investments on our spending priorities, particularly infrastructure and human resource development, possible. “With additional resources at our disposal, we will embark on the most ambitious infrastructure development program in recent Philippine history. We will spend about $170 billion dollars [P8 to P9 trillion] for public infrastructure, rising gradually from 5.4% of GDP in 2017 to 7.3% of GDP in 2022,” said Secretary Diokno. “The Build Build Build campaign will usher in the Golden Age of Infrastructure in the Philippines, reflected in safe, reliable, convenient and modern infrastructure facilities all over the country,” the Budget Secretary added.

Beyond funding, the DBM Secretary also allayed the fears of investors that the huge funding for government programs and projects will not translate into concrete output. “Underspending seems to be a thing of the past. Our first half disbursements [in FY 2017] are practically on the dot vis-à-vis the programmed budget. Last year [2016], underspending has also been narrowed to 3.6 percent from a high of 13.3 and 12.8 percent in 2014 and 2015, respectively. This goes to show that the reforms we’ve implemented are gaining traction,” said Sec. Diokno.

In effect, the medium-term fiscal policy and national government spending continue to support an enabling economic environment for investment inflows and robust growth. This only affirms a rosy outlook for the Philippine economy in the years to come. (DBM)