PH could grow 8% with ASEAN integration – analyst

With potentials to reap benefits from its demographic advantage, the Philippines could grow up to eight percent in the next few years as the ASEAN Economic Community (AEC) falls further into place, economic analyst said.

Datuk Abdul Farid Alias, chief executive officer of Maybank Group, said during the Philippine leg of Maybank’s Invest ASEAN held in Makati on Tuesday that the Philippines’ demography has huge dividends to reap that will push growth higher for several decades.

“We hope that the impact of AEC [ASEAN Economic Community] will move up the GDP [gross domestic product] growth of every country in this region. Especially in the Philippines, we hope that AEC will have a positive impact by increasing the economic growth from 6 to 7 percent to 7 to 8 percent. That is our hope,” Farid Alias told reporters.

Philippines is one of the fastest growing economies in Asia after China with average GDP growth of 6 percent for the last five years.

In the first quarter, the country’s GDP went up 5.2 percent. Albeit slower than expected, the growth is still one of the fastest recorded in the region.

Within the next 10 years, Farid Alias said, this GDP growth range could possibly go up to seven to eight percent under the AEC.

“The Philippines is on cusp of an economic transformation and the key driver will be its favorable demography. It has a young population with a median age of 23 and declining fertility rate, which will lead to an increase in the number of working adults who will dive domestic demand and spur economic growth,” he said.

He explained that the lower fertility rate will impact the Philippines’ population structure that should result in an increase in the size of the workforce relative to young and old dependents. This would eventually lead to a rise in disposable income and the doubling of the middle class which bodes well for the Philippines where private consumption is the bedrock of its economy, accounting for about 70 percent of total GDP.

However, Farid Alias said that while the Philippines is in a good place with strong GDP growth, a structural current account surplus, and a robust banking sector to finance future growth, there is still a lot to be done.

“To reap the demographic dividends, the right policies need to be in place. Education and labor policies as well as measures such as building better infrastructure are key to improving employment and productivity for the working-age adults, who will generate growth for the Philippines,” he added.

Themed “Riding the boom: ASEAN’s demographic dividends”, the Invest ASEAN Philippines conference is the fifth conference of Maybank’s series of investment forum in Asia.

The conference attracted close to 600 attendees including representatives, mainly corporations, from eight countries including Malaysia, Singapore, Vietnam, Indonesia, Philippines, Thailand, Hong Kong and India.

The Invest ASEAN conference series will wrap up in Indonesia this October.

Maybank is among Asia’s leading banking groups and South East Asia’s fourth largest bank by assets. In the country, the group also has presence through Maybank Philippines. (MBM)