A TOP official of an investment bank is confident the Philippines will be able to maintain its economic achievements after the country posted a strong 6.4 percent growth in the first quarter this year, the second fastest in the region after China.
Speaking before an economic forum last Friday, First Metro Investment Corp. (FMIC) president and chief executive officer Roberto Juanchito Dispo said the Philippines is well positioned to sustain its economic growth.
ENJOY GOOD LIFE + INVESTMENT, CLICK HERE
“From the business standpoint, we have a high degree of optimism the country’s economic surge is going to be sustainable,” said Dispo.
Dispo gave the talk “Asia’s Capital Market Star: Can the Philippines Sustain the Momentum,” during the 3rd Financial Executives (Finex)-Cebu General Membership Meeting and The Philippines’ Resurgent Economy forum at the Cebu City Marriott Hotel.
Astonishing growth
Dispo said there is reason for optimism because the growth of Asia and its emerging markets, including the Philippines, is “astonishing.” He said Asia’s emerging markets comprise 52 percent of the world’s total economy.
Dispo said the VIP (Vietnam, Indonesia and the Philippines) acronym was coined to highlight Asian countries that remained resilient despite the economic recession in 2008-2009. After a year, economic forecasters identified three Asian countries TIP (Turkey, Indonesia and the Philippines) whose economies will be driving growth in Asia in the coming years.
Dispo said there are numerous factors that would help sustain the economic growth of the country.
He said that if the country uses its high gross international reserve (GIR), now at $76 billion, to pay for the country’s foreign debt of $63 billion, the Philippines will be a debt-free nation.
Dispo said the country has sound and stable fiscal policy and he is confident it will be able to get its credit rating upgrade by financial institutions in the second semester this year.
Overseas remittances, on the other hand, will also keep the country afloat. He pointed out that the World Bank has ranked the Philippines as the fourth largest in terms of remittances. Some 3,000 Filipinos leave the country daily to work overseas.
Dispo believes the search for “greener pastures” abroad will continue, given the demand for Filipino workers. He said countries like the Philippines, which has a rising supply of young workers, will soon run the economies of fastest-aging countries in the world like Japan and China.
“Filipino workers will be the first to be hired because they are multi-skilled,” Dispo said.
Thriving industries like business process outsourcing (BPO) and tourism will continue to be the country’s top investment attraction. He said the Philippines will need to revitalize its Philippine Economiz Zone Authorities locations and industrial zones to make it more attractive to business locators.
He said mining is expected to bring “wonders” to the country.
“The Philippines is literally sitting on top of gold,” said Dispo. The Philippines is ranked top five in the world for overall mineral reserves. The government estimates the country has at least $840 billion in gold, copper, nickel, chromite, manganese, silver and iron.
Dispo said clear policies should be put in place to maximize the industry and make it a big contributor to the national coffers to finance critical infrastructure programs.
Savings rate
Savings rate of the Philippines as percentage of GDP is growing “decent and is fast catching up” in Asia at 35 percent.
Dispo said the country needs to address some cultural defects in order for the savings rate in the country to improve. He said Filipinos spend P7 million on skin-whitening products. He also said a large amount of money is spent on text messaging and even buying “ukay-ukay” or used clothing.
When asked on the factors that would pose challenges in sustaining economic growth, Dispo cited the government’s low and slow infrastructure spending, the peso appreciation that could harm sectors like BPO, exports and remittances; and the various political reforms that can make or break the country’s current economic standing.
He, however, said, “We are confident of the new leadership and its fresh mandate and thrust on good governance.”
Published in the Sun.Star Cebu newspaper on August 28, 2012.
No comments:
Post a Comment