I was in Singapore last week for the Philippine Economic Briefing, where our economic managers discussed economic opportunities in the Philippines. As founder and managing director of the Stratbase Group and of Bower Group Asia, I gave my insights from the point of view of the private sector.
The Philippine economic team gave their own assessment of the Philippine economy and where it is headed. Finance Secretary Benjamin Diokno said domestic demand remains a major force for growth, with household consumption expanding by 6.3% and investments growing by 12.2%.
Secretary Diokno was upbeat about the Philippines’ robust economic performance, citing the fact that it is outgrowing other emerging Asian economies.
The Bangko Sentral’s Deputy Governor, Francisco Dakila, Jr., said that banks continue to have sufficient capital, that assets and deposits are steadily growing, and that loan portfolios continue to expand. The Philippine banking system is robust, he emphasized.
Meanwhile, Department of Budget and Management Secretary Amenah Pangandaman expressed confidence that despite global challenges and the aftermath of the pandemic-induced lockdowns, the country is making good progress toward its agenda for economic prosperity.
Infrastructure is key, National Economic and Development Authority Secretary Arsenio Balisacan said. He emphasized that one of the main strategies identified in the Philippine Development Plan (PDP) 2023-2028 is the expansion and upgrade of infrastructure. This, he said, is a critical component of the government’s development agenda.
From my end, I highlighted a few things.
Foremost, I said that we were cautiously optimistic about our economy’s progress because the current administration, which will soon conclude its first year, seems to have a fairly good grasp of what ails us and what should be done.
President Ferdinand Marcos, Jr., who won by a landslide with a mandate from at least 31 million Filipino voters, has surrounded himself with an able and formidable economic team, some members of which I have already mentioned earlier in this piece.
The members of this economic team are recognized experts in their field and are known to rely on data and hard evidence in crafting policy and making recommendations on matters of public interest. They are focused on the target to reach upper middle-income status by 2024-2025.
The PDP 2023-2028 has been approved, as is the creation of so-called green lanes for strategic investments.
In the Legislative branch, there, too, have been encouraging developments. The Implementing Rules and Regulations (IRR) of the amendments to the Public Service Act have been released. Pieces of legislation crucial to the economy, for example the Build-Operate-Transfer Law, the Renewable Energy Act, and the Foreign Investments Act, have been amended.
Structural problems continue to hound our economy, and the pandemic-induced lockdowns made us go through very difficult times. But the PEB’s theme this year — Unfolding New Chapters in the Philippine Growth Story — is apt.
The growth momentum that Secretary Diokno talked about is buoyed by a huge consumer base of 110 million Filipinos, the majority of which are young, skilled, and educated. This is always a valuable asset for our country, because private consumption is a strong economic driver, especially when supported by better job opportunities and remittances from overseas Filipino workers. Whatever developments there may be beyond our shores, there will always be demand from within the country, and this presents a tremendous opportunity for economic activity.
I share the optimism of our government officials because I can see tangible efforts on the part of this administration to foster an environment that is conducive to business. Make no mistake about it: there is great room for improvement, and the situation is far from perfect. Foremost we have to make sure that the well-intended policies crafted on the national level are adequately cascaded to the grassroots and implemented at the community/local government level later.
Nonetheless, the administration appears to be aware that when investors feel they are welcome, and that their businesses will thrive instead of being subjected to rules that change depending on the whims of whoever is in power, they will come — and they will stay. This translates to a stable and resilient economy with a multiplier effect on increasing productivity, creating jobs, providing income, spurring consumption. A virtuous cycle is then created, one that brings a better quality of life to all Filipinos.
We at Stratbase believe, too, that there should be a particular focus on the manufacturing and agro-industrial sectors. These are areas where there is untapped potential and great opportunities for growth.
The message that we delivered in Singapore is, to me, clear and unequivocal. More than ever, we are open to business and investment opportunities. Our economy is being steered by an able team who is cognizant of what must be done, and how exactly to do it. Meanwhile, the private sector is a willing partner to the government and is always ready to collaborate and lend its expertise and advice.
It’s a long way away from our economic goals, but the horizon is getting clearer by the day and we should never lose sight of our targets. We must seize the momentum from these new chapters in our economic life. So, yes, we are optimistic, albeit cautiously so. More importantly, we realize that success will come because it is not in the hands of a single sector — not government alone, not the private sector alone. Rather, an all of society approach always guarantees the best results.
Victor Andres “Dindo” C. Manhit is the president of the Stratbase ADR Institute.