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The Philippines ups its tempo
Publication Date : 27-05-2014
The combination of an educated, English-language speaking workforce and a deep-rooted work ethic has turned the Filipino people into the care-givers, IT programmers and maritime professionals of the world.
As my friend and prominent business reporter Doris Dumlao wrote in the Philippine Daily Inquirer recently “… I distinctly remember him (yours truly) telling me – long before it happened – that he could feel a turnaround happening for the Philippines”.
But you don’t need the World Economic Forum (WEF) or me to tell you that the Philippines is going places.
Just look at the numbers.
Under the capable administration of President Benigno “NoyNoy” Aquino III, the archipelagic republic’s economy has soared.
The global information company IHS has recently predicted that the Philippines will be a trillion-dollar economy by 2030.
Gross Domestic Product per capita, which now stands at US$2,800, could grow to $5,800 by 2024.
The Philippines economy grew by 7.2% in 2013, including by 6.5% in the fourth quarter, despite the devastation of Typhoon Haiyan.
Indeed, it was the second-fastest growing economy in Asia after China. Growth for the first quarter of 2014 is expected to be around 7% or better. Official forecasts for 2014 predict its economy to grow between 6.5% and 7.5%.
This is the strongest growth that the Philippines has enjoyed since the 1950s.
Foreign investments have also almost doubled to $2.8 billion in 2012 from 2008.
Crucial industries such as business process outsourcing (BPO) continue to outperform and it has even surpassed India as the world leader.
This success speaks volumes of the quality of Philippine human capital.
Aquino’s commitment to improve human capital development, skills and language training has made Philippine workers world-beaters.
It also bodes well for reducing the number of overseas foreign workers, whose remittances are generous but the social cost of which is growing.
Another sector worth watching is the gaming industry. Four $1 billion integrated resorts are being developed in Manila Bay’s Entertainment City. Gaming revenues in 2013 was just $2.2 billion but this could grow with the regulatory Philippine Amusement and Gaming Corpora-tion reducing fees for gaming licences.
The real attraction of the Philippines to me, however, is its vibrant and lively culture. Philippine music, art and television are raucous, fun and irreverent – everything I love.
Of course, this is not to say that the Philippines doesn’t have its own set of challenges.
Like that other Southeast Asian giant, Indonesia, poor infrastructure remains a perennial problem.
Manila’s Ninoy Aquino International Airport is an embarrassment. Still, the administration will seek to raise $8 billion to upgrade and develop its infrastructure, including highways and airports.
While the region rightly hailed March’s peace agreement with the Moro Islamic Liberation Front, security remains an issue in the south, combined with perennial problems of hard-core poverty and corruption.
Its current maritime boundary dispute with China – which has been brought to the Permanent Court of Arbitration (a body the North Asian giant refuses to submit to) – is doing little to cool tensions in Southeast Asia.
Bad relations with China also rob it of the tourist and investment dollars that it desperately needs to continue its growth.
Furthermore – and this is a point I made in my WEF session – the fact that the Philippines Constitution mandates that Aquino must step down in 2016 after just one six-year term in office means that the turnaround is at risk if his successor does not share his reforming zeal.
This may give pause to many would-be investors in the Philippines, which it can ill-afford as perceptions are everything in the great game of global business.
The Philippines has come a long way and it can go further – if its people want it to.
But I will keep on saying this: if you want to see the next big thing, go to the Philippines! And, by the way, we Malaysians need to stop snickering and buck up. If we’re not careful, we’ll end up heading to Manila to find jobs.