Norway-Asia Business Review - - Foreword -

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.

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