Friday , 29 March 2024

Economy vastly improved; no longer sick man of Asia

Economic officials and business leaders believe the country no longer deserves to be branded the “sick man of Asia” after its economy grew more than 6 percent for a third consecutive year.

Hampered by natural disasters, the growth of the $300-billion economy slowed to 6.1 percent in 2014, but still outpaced most other countries in Asia, officials said Thursday.

The 2014 performance ranked the Philippines as the second fastest-growing Asian country behind China, which posted 7.3-percent growth, and ahead of Vietnam’s 6.0-percent growth, Socio-Economic Planning Secretary Arsenio Balisacan said. The Philippine economy grew 7.2 percent in 2013.

But for the economic miracle that is the Philippines to become a permanent success story, strong growth of more than 6 percent a year should be maintained for eight to 10 years, Philippine Long Distance Telecommunications Co. (PLDT) Chairman Manuel V. Pangilinan has said.

“We’re halfway there,” Pangilinan said.

Kevin Lu, a fellow at Singapore business school Insead, said, however, that regulatory uncertainties remain as deterrent for businesses to set up operations in the Philippines.

“When we talk of miracles, we should also be talking of long sustained good growth for 10 to 15 years he said,” Lu said.

Pangilinan said there would be no reason for the Philippines not to sustain an economic growth of 6 percent to 8 percent yearly.

The government should, nevertheless, address concerns that are well known such as the high cost of power, lack of new infrastructure, stimulating agriculture output, and rising inequality, he added.

Pangilinan said that while the Aquino administration has been addressing the “soft part” of development such as improving perceptions on the country through good government, the hard parts which are factors that ease the conduct of business should also be addressed.

“The government should put in as well policies that would shift the economy from consumption-driven to that led by investments.

“To promote inclusive growth, the hard parts of development should also be addressed,” according to Pangilinan.

Tourism Secretary Ramon Jimenez said that the key concerns of business are being addressed by the government but it takes time particularly as a result of the administration’s adherence to the democratic process.

“Very  often, there are temptations for short cuts and to ride roughshod over the law but the democratic process requires that people agree to what the government does,” he said.

He cited as an example the policy at the Department of Tourism (DoT) to go to the grassroots to determine tourism promotion programs.

“It is the tourism program of a particular locality which the DoT then makes the world aware of and help build it up,” Jimenez said.

“Our country can no longer be called the sick man of Asia,” Balisacan said. “Our economic growth is becoming more competitive with our East and Southeast Asian neighbors.”

The Philippines has been blighted by decades of corrupt administrations and the archipelago nation is also vulnerable to frequent natural disasters such as typhoons and floods. Investor perceptions of the country have improved under the government of President Aquino, who was elected in 2010 with promises to combat endemic graft and poverty.

“The numbers tell us that we are moving in the right direction,” Baliscan said. “Clearly the economic policies and strategies we are implementing to achieve sustained and inclusive growth are bearing fruit,” he said.

National Statistician Lisa Bersales said the “robust performance” of industry, particularly manufacturing and construction, lifted growth in the fourth quarter to 6.9 percent from 6.3 percent a year earlier.

She said services contributed 3.4 percentage points, industry 2.5 percentage points and agriculture 0.2 percentage points to the 2014 GDP growth of 6.1 percent.

Business process outsourcing was one of the contributors to the expansion of services, according to Balisacan. Outsourcing currently employs 1.052 million Filipinos and the industry is targeting 1.3 million full time employees and $25 billion in revenue by 2016.

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