ASEAN’s powerhouse
The country’s macroeconomic indicators are positive, and so are its entrepreneurial and labour credentials
Philippines has registered remarkable growth, and is one of the most promising economies of Southeast Asia. It has posted immense successes in the last two decades, as its agriculture-cum-industrial produce has helped it touch the self-reliant graph. The most passionate aspect of its economy is its entrepreneurship, coupled with remittances from overseas Filipinos. According to estimates, Philippines receives around $8 billion as remittances annually, which account for more than 10 per cent of its gross domestic product (GDP).
Likewise, the UAE is home to around 700,000 Filipinos, who supplement the Philippines’ economy at an average of $600 million annually as remittances. Moreover, the UAE is the Philippines’ second-largest trading partner in the Middle East, with bilateral trade growing at a pace of nine per cent annually.
Philippines exports to the UAE stand at around $310 million, along with a staggering import of roughly $500 million. A host of products, including processed and fresh food, health and wellness gadgets, wooden appliances, electronics, semiconductors and beverages are prime in the list of business. Likewise, tourism is upbeat these days as a large number of UAE citizens choose Philippines, as their preferred destination in Far East Asia.
Economists believe that the Philippines is growing at a breakneck speed, and apparently needs to slow down. Macroeconomic indicators of the country are quite promising. They had weathered the global economic downslide, and kept themselves going strong from the regional perspective, as well. Manila has been successful in addressing its unemployment problem, as it stands today at 6.7 per cent, and helped alleviate the lot of the poor.
The World Bank says that Philippines’ growth outlook remains positive but subject to risks. The stakes, nonetheless, are many as the country is dependent on overseas workers’ remittances and business process outsourcing. Remittances, mostly from the Middle East, Europe and the U.S., are equivalent to 12 per cent of the GDP. However, as the fastest growing economy in the region, Philippines is likely to retain its domestic demand.
Manila is primarily focusing on institutional reforms and consolidating its vibrant economic base spread over mainland and on islands. Fighting corruption and lawlessness is close to its heart, and the government has made many inroads. Promoting entrepreneurial environment is a fundamental of its economy, and at the same time buoying the private sector.
Philippines’ public debt is around 37 per cent of its GDP, and government spending amounts to 19 per cent of the annual budget. The areas that Manila should concentrate are its
rural populace and the buzzing middle class who have limited access to amenities of civic life, and are struggling to make their ends meet.
Philippines is a country of over 100 million people, speaking more than 80 languages and dialects, and is spread over 7,000 islands in the Western Pacific. Agriculture is the backbone of its economy, whereas shipbuilding, electronics, food and beverages and apparel are other essential segments of production. The Philippines also has a decent heavy-industrial unit and the government is reforming it on modern lines.
Nonetheless, the country has to broaden its foreign investment portfolio. The fact that investment in several sectors is restricted acts an immediate obstacle on the pace of development. The government has lifted moratorium on granting of new banking licenses, and it is hoped that it will push the cycle of economy into productivity and entrepreneurial innovation.
Presently, the value of exports and imports are equal in share of GDP — to the tune of 60 per cent, and economists say there is much room for manoeuvering to put the growth on upscale.
Philippines’ is closely working on a plan to realign its national priorities and register itself as a commendable power. In recent years’, the country’s growth has surpassed even that of China, which stands at 6.6 per cent.
Manila plans to ramp up infrastructure spending, which would raise the budget deficit to around three per cent, providing stimulus to the economy. Once the cycle of growth, spending and human development index takes roots in Philippines, poverty will take an instant nosedive.
The third largest economy in the ASEAN region has new challenges to face. The country’s consumption and production pattern are unique in essence and this has helped it overcome poverty in recent years.