Is the Philippines really no longer the ‘Sick Man’ of Asia?

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As I See It

BY ELPIDIO R. ESTIOKO

In 2014, then President Benigno Aquino claimed, “The Philippines is no longer the “Sick Man of Asia”, as it is now a “viable destination for investments and tourists”. This was contained in an article written by Raul Dancel, published in The Straits Times on May 23, 2014.

The Philippines has been called Asia’s “sick man”, which descriptor originally belonged to China in the 19th and early 20th century when the country has lagged behind many of its neighbors with inconsistent growth amid massive poverty. But… look at China now… standing tall as one of the strongest and leading economies in the world today!

In an interview with FilAm Star, when he visited the US in June, 2014, former president of the Chamber of Philippine Coconut Oil Millers-turned real estate developer Antonio “Tony” Diaz, also claimed that the Philippines is no longer the “Sick Man of Asia” but is now the “Darling of Asia”.

At that time, Diaz said that despite the twin disasters that struck the Philippines in late 2013, the country still registered a 7.2 percent growth in its Gross Domestic Product (GDP). The 7.2 Bohol earthquake and super typhoon Haiyan in Leyte were exacerbated by then continuing peace problem in Mindanao. “Yet these events did not stop foreign investors from investing in various areas of development in the Philippines, including real estate and housing,” Diaz explained.

Then, in 2017, Karl Tabucal, vice president for International Marketing of Vista Land, in an interview with FilAm Star at Max Restaurant in Seafood City before his presentation said, “With the sustained above-6-percent economic growth rate of the Philippines in 2016, the country will no longer be labeled as the ‘Sick Man of Asia’ but the faster growing economy in Asia at a projected 6.8 percent growth rate”.

According to Tabucal, the country’s improved economy is due to four major developments. The first reason is due to controlled inflation in 2015 going to 1.8 percent inflation rate. Next is the bullish infra-structure development implemented by the government, with the government having a total budget pf PHP 890.9B in 2017.

The third is remittances from abroad which reached $ $26.9B in 2016 vs. $25.81B in 2015, with a gross rate of 4.3 percent. Of these, about PHP 463M was received from the US (the highest) with Saudi Arabia a far second, Tabucal said.

There was also the increase in tourist arrivals at 5.9M in 2016 vs. 5.4M in 2015 – a 10 percent growth rate. Koreans had the most tourist arrivals, then the US, china, and Japan in that order, according to Tabucal.

“Of course,” Tabucal said, “the fourth factor is the energized real estate industry, with the present population of 105M and a growth rate of two percent each year, real estate will surely be a big factor in the improved economy.”

All the four factors mentioned by Tabucal at that time in 2017, are all present today under the administration of Philippine President Rodrigo Duterte. The Build, Build, Build (BBB) Project of the President carried the construction momentum of 2017 to date. The construction industry is being boosted by Duterte (with his Dutertenomics) up to the end of his term and hoping the next president will pick it from there to be able to sustain the growth of the country leading to being the “Darling of Asia”.

In fact, it’s already becoming that way with the newly-rehabilitated Boracay Resort in Aklan attracting numerous international tourists all over the world.

Also, the being renovated Manila Bay and the Pasig River in Metro Manila will eventually attract more tourists once it will be completed.

Socioeconomic Planning Secretary Ernesto Pernia said. “The Philippines is no longer the “sick man of Asia” as the country’s growth has sustained its momentum.”

Speaking before government officials and other stakeholders for the launching of the Philippine Regional Roadshows as part of the Philippine Development Plan 2017-2022, Pernia said the country’s growth trajectory “has been on a sharp consistent uptrend.”

“This present environment is a perfect setting for the implementation of Philippine Development Plan (PDP), the socio-economic blueprint of the Duterte administration,” he said.

To realize its vision of becoming an important converge point for socio-economic activities and as a leading industrial core and trade center in Southern Philippines, Pernia said it is imperative for Northern Mindanao to implement its strategic interventions called “gateway.”

Gateway is an acronym that stands for good governance, peace and order, A for Access; logistics and other infrastructure; T for Trade, industry and tourism; E for environment and sustainable development; W for well-being and improved welfare; A for agriculture and fishery; and Y for youth development and education.

“We are here today to fulfill that promise with two development plans in hand. Both the national PDP and the Northern Mindanao Development Plan 2017-2022, which were both crafted through intensive multisector and multilevel consultations to ensure inclusivity of the people in every aspect of each plan,” Pernia said.

So, will President Duterte be able to carry on the momentum set-up and developed by previous presidents claiming the Philippines is no longer the “sick man of Asia”?

Consider this, the Philippines has been on a steady path of economic growth in recent years as described earlier. GDP growth has been a creditable 6% per year from 2011 to 2015, and the Philippines is expected to remain the  fastest growing economy in 2017 with a projected 6.7% growth due in large part to rising infrastructure spending and growing demand from a burgeoning middle class. Foreign direct investment (FDI) has been on an uptrend with $7.9 billion entering the economy in 2016, an impressive 40.7% jump from 2015…

Top trading partners in 2016 included Japan, which imported $11.7 billion worth of Philippines exports, followed by the U.S., China and Singapore.

While the unemployment rate has declined in recent years and remains a concern at 6.6% (2016), the economy is supported by a large volume of remittances from about 10 million overseas Filipino workers and migrants who leave the country for better prospects elsewhere. Remittances flowing into the country amounted to a record $27 billion in 2016…

President Duterte has an ambitious vision to transform the Philippines into a high middle-income economy by the end of his 6-year term in 2022, and released a 10 point socioeconomic plan outlining an economic strategy under his ambitious economic blueprint dubbed as “Dutertenomics”. The blueprint will spark a “golden age of infrastructure” with new roads, bridges, railways, airports and seaports as identified in his BBB project. An investment target of $14.6 billion, which is 4.6% of GDP, has been identified for this year. Over the next five years, that amount is slated to increase to approximately 7.4% of GDP, more than twice the 3.3% expenditure in 2015. This is a transition move to maintain the momentum earlier set by previous presidents.

Let’s not forget that to be able to maintain our moniker as the “Darling of Asia”, we need to have long-term goals/projects and long-term condition in place that will outlast the president’s “Dutertenomics”!

(For feedbacks, comments… please email the author at estiokoelpidio@gmail.com).

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