‘PH still has room for growth’

By Katlene O. Cacho

Thursday, January 26, 2012

DESPITE global uncertainty, emerging economies like the Philippines still has room for growth this year.

Cebu, one of the country’s thriving local economies, should bank on its assets to sustain its growth, a Cebuano economist said.

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Speaking before an economic forum, Cebu Business Club (CBC) executive director Perry Fajardo said Cebu should take advantage of its assets if it wants to grow more despite the economic problems of major economies abroad.

He said Cebu should bank on its strategic location, strong outward orientation as manifested by its large export manufacturing base, BPO centers, tourist destinations, strong local entrepreneurship, skilled and talented human resources and strong health,
financial and services sector to withstand economic challenges.

But Fajardo said that with the problems currently faced by the United States and Europe and the possible slowdown in China, countries like the Philippines are affected because its economic activities are tied with these economies.

Not immune

With Cebu’s exposure in the global market, it is still not immune from the continuing global economic slowdown. Fajardo said foreign tourist arrivals may slacken, exports may fall and BPO and foreign direct investments might be affected.

But he stressed that despite the uncertainty and weak outlook of the global economy, emerging economies will be the new engine of global growth.

“On the average, we will grow faster than the global growth rate,” he said.

Fajardo, citing the baseline scenario of the UN World Economic Situation and Prospects 2012, said the global gross domestic product (GDP) would grow by 2.6 percent this
year, slower than the estimated growth rate of 2.8 last year.

Developed economies like the US, Japan and Europe would likely remain at 1.3 percent this year similar to the estimated forecast in 2011.

Developing economies, on the other hand, is projected to post a 5.6 percent growth in 2012, still slower than last year’s six percent growth.

Philippines is projected to grow by 4.4 percent this year, slightly higher than last year’s estimated forecast at 4.3 percent.

On the downside, Fajardo said the world economy might post a growth of just 0.5 percent if economic problems in US and Europe remain unresolved. He said developed economies may post a negative growth while developing countries will log a 3.8 percent growth.

Looming recession

“There could be a looming recession in developed economies,” he said.

But the country’s economic managers recently announced they were keeping this year’s growth target at 5.5-6.5 percent and six to seven percent growth by 2013 on the back of the election period, global recovery, acceleration of public-private partnership (PPP) projects and the efficient disbursement of the government.

Despite global concerns, Fajardo said Cebuanos should remain upbeat with more opportunities in the areas of non-voice and Knowledge Process Outsourcing (KPO) services and domestic tourism.

“Tourism should move now to the small towns and cities to show more of what we have and to create jobs in the rural areas,” he said.

Fajardo was one of the speakers in the Views and Prospects 2012 forum organized by the Mandaue Chamber of Commerce and Industry and CBC at the Casino Español on Tuesday.

Published in the Sun.Star Cebu newspaper on January 27, 2012.