PH infra drive cited in 2018 study

The Philippines’ “Build, Build, Build” infrastructure program, which is leading national efforts to accelerate economic growth, and the drive towards government decentralization have been highlighted in a latest study.

The Report: The Philippines 2018 by Oxford Business Group (OBG) examines the funding mechansims for the broad range of projects either in the pipeline or under consideration, including airports, seaports, railways and the country’s first subway system, as well as exploring the long-term implications of these projects for inclusive growth and economic productivity.

The country report also detailed coverage of the country’s construction sector. It said that this sector is benefiting from rising levels of urbanisation and growing demand for both office space and housing in Metro Manila and beyond.

OBG, however, noted that the Tax Reform for Acceleration and Inclusion (TRAIN) programme has mixed reception from business leaders. TRAIN, which has impacted on inflation level, was aimed to generate additional revenues for to fund the BBB projects.

OBG’s report also charts the expansion across key components of the Philippines’ manufacturing industry, including electronics, food and beverages, chemicals and furniture, which helped to boost overall output by 8.5%, in 2017.

Looking ahead, it examines the suitability of the governmentled Inclusive Innovation Industrial Strategy (i3S) in raising the competitiveness of the manufacturing sector in an era of rapid technological change.

The report further cited the country’s business process outsourcing industry as major contributor to the gross domestic product.

The BPO sector is seen to be in the midst of transition as it adapts to rising competition and advancements in Artificial Intelligence and automation.

The Report cited the changes under way within the sector, which include a shift towards a broader, more value-added range of services.

Other topical issues covered include the constitutional changes currently on the table that could lead to the country becoming a federal state.

Commenting ahead of the launch, OBG’s editor in chief, Oliver Cornock, said sharpening the focus on the Philippines’ regional areas had set the scene for a new period of investment and enterprise.

“The administration’s goals of making infrastructure development a top priority and ensuring that future economic growth is both sustainable and more inclusive are already generating a raft of new opportunities nationwide, as our coverage of the country’s emerging cities shows,” he said.

“With a diverse range of funding options to finance the project pipeline now being pursued, the Philippines should be able to look forward to a period of heightened economic activity in the medium term.”

Patrick Cooke, OBG’s regional editor for Asia, added that efforts among manufacturers to move up the value chain, together with continued strong performances across the service and trade industries, had also provided firm foundations for future expansion, helping the country to secure a sixth consecutive year of GDP growth above 6 percent.

“While our report highlights the issues that remain a challenge for business leaders, such as uncertainty over tax reforms and the need to improve supply chains, core segments of the manufacturing industry continue to deliver strong performances, despite intense regional competition and unhelpful trade disputes between the world’s leading economic powers,” he said.“With growth in the first quarter of 2018 having reached 6.8%, on a par with China and behind only Vietnam in the region, the Philippines has much to feel positive about.”

The Report: The Philippines 2018has been produced with the Philippine Chamber of Commerce and Industry, the Makati Business Club and the Management Association of the Philippines.

Contributions have also been made by the Philippine Stock Exchange, P&A Grant Thornton and Villaraza&Angangco.