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CEBU, Philippines - Although the Philippine economy is strengthened by the five resiliency factors, the government has to seriously implement the Public-Private-Partnership (PPP) to realize an ideal growth of at least seven percent GDP (Gross Domestic Product) by end of this year.Economist and PhilAm Asset Management Inc (PAMI) first vice president for equity fund management Eduardo R. Banaag, Jr., said that if the PPP were to be started this year, the Philippines will surely take off in terms of economic vibrancy.
In fact, although the country is still on the “resiliency” level, it has already attracted foreign inflows that brought the stock market into consistent upward movement.
In a recent economic briefing held at the Cebu City Marriott Hotel, Banaag mentioned the five “resiliency factors” or five truths, why the Philippines is on its way to strong economic health. First, he said the Philippines has been able to lend money worth US$250 million to International Monetary Fund (IMF) to help the struggling European government late last year.
Second, he said that the country is undoubtedly being pushed by the strong growth of the Business Process Outsourcing (BPO) sector, which is expected to be stay for a long while and will double its growth every year.
The Philippine economy is now run by two legs—BPO and OFW (Overseas Filipino Workers) remittances. Despite this consistent growth in these twin growth engines, the Philippines still has to work on implementing the economic stimulus via PPP program.
The seven percent GDP growth goal, which is described by many as “ambitious” is attainable, if within this year, real projects in PPP will be rolled out, avoiding the hassles of bureaucracy and red tape.
Thirdly, he said that the real income of Filipinos or the per-capita-income has increased by 53 percent in the last five years.
The GDP on the other hand, is increasingly growing for more than a decade without fail since 1998. Because of this, banks have one of the most capitalized. And tier-capital ratio is double the global standard.
Lastly, the Philippine economy is founded by the strong
resiliency factor, with the low interest rate phenomenon. The reason
why, amortization is affordable, “banks are friendlier,” while appetite
of consumers to borrow has beefed up as interest rate become much more
attractive.
At present, Banaag said “growth is still not here [yet],” but the way to go there is ready.
Banaag believes that if the government will not be able implement some PPP projects this year, 2013 must be the year for full implementation.
This is for the reason, that Banaag encouraged the public, to start investing right now, saying “we have witnessed the long running streak in the Philippine stock market.”
And in at least the next five years, this trend will continue, while the capital inflows are staying for long term, not already seen as “hot money.”
Overall, he said “things are looking good” for the Philippine economy in the long term. The Philippines, in fact, is now considered as one of the most expensive market for equity price.
He said the market now moves with earnings, not dependent on rating upgrade. “We are now experiencing years of positive returns.” (FREEMAN)
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