Dr Mendoza: In recent years, the Philippines has proven resilient against external shocks, usually buoyed by remittances and a robust business process outsourcing (BPO) industry. The country’s macroeconomic fundamentals remain strong, with its debt-to-GDP ratio at its lowest in over 20 years, and foreign reserves at a historical high of well over USD 85 billion. On top of this, the Philippines is presently undertaking a dramatic infrastructure spending buildup which has been long anticipated. This will not only pump prime the economy, it could also help address longstanding competitiveness issues in other high-growth-potential areas in the country. The latest World Bank, IMF and S&P assessments of the Philippine economy continue to acknowledge its strong growth prospects.
BR: The new president in your country has garnered much of the headlines recently from the Philippines with his bluster and protectionist rants. Should investors treat this as populist noise or is the nation really going to take a more inward focus, retreating from its international agreements?
DM: The Philippines can be a considered a small open economy, with external linkages that are an integral part of its development trajectory. There are many stakeholders in the Philippine economy that depend on these links. Protectionist rhetoric could nevertheless send harmful signals, so it’s important that evidence-based discussion continue to guide our economic policies.
BR: The Philippines has a long history of collaboration with Norway on maritime industry and issues. Can we expect this mutually advantageous arrangement to continue and what is the Philippines doing to address training weaknesses that have become a concern for shippers?
DM: The maritime economy in the Philippines is one of the sectors with strong growth potential. Already, Philippine manpower underpins a large section of the global maritime industry. The growth of education and training institutions in this sector will be key in its continued growth and competitiveness.
BR: For readers who may not be familiar with the Philippines, can you explain why the country would be a desirable location for companies or investors?
DM: The Philippines has a young population, with a median age of about 24 years old. Significantly strengthened social protection, education and health policies are expected to boost the country’s human capital and innate competitiveness for decades to come. With pipelined infrastructure and energy investments, longstanding growth constraints could finally be lifted. A resurgence in the tourism, manufacturing and agro-industry sectors could finally rebalance and diversify the economy to include more growth engines across the country. And with relatively benign macroeconomic conditions, the Philippines is poised to make its economic development takeoff.