PHILIPPINE ECONOMY TOPS ASIAN GROWTH, FIREWALL AMIDST POLITICAL TURMOILS

PHILIPPINE ECONOMY TOPS ASIAN GROWTH, FIREWALL AMIDST POLITICAL TURMOILS

 

Erle Frayne D. Argonza

 

For this particular note, I will go back to my reflections on the Philippine economy, while I look forward to expand to ASEAN concerns as ASEAN integration nears by 2015. Philippine economic growth tops ASEAN, which makes it the leading ‘tiger’ of the region today.

 

For a recall, Philippine economic performance showed past 7% growth for the last four (4) quarters already. As of middle of 2013, PH growth was at par with China’s which seems to show some sputtering after past two (2) decades of double digit growth. China’s very own growth pattern may decline even more in the years ahead, thus permitting the PH economy to be on top if it shows a sustained trend over the next couples of years.

 

Economic performance can only be as good as the economy players themselves. While economic policy environment, which is the terrain of politicians and bureaucrats, plays a very vital role in stimulating economic development, in the last instance it is the performance of economic players that counts most.

 

As a matter of fact, it is on the side of the state—with poor expenditures for infrastructures during the first two years of the Aquino administration—that produced a lackluster economic growth. Bad governance stalks the Philippine state, which ends in an overall Weak State, though governance reforms are in order.

 

Incidentally, across the decades, the Philippine economy built a ‘firewall’ that protects it from political caldrons here and abroad. Along with other Asian economies, the Philippines also built a ‘firewall’ against turmoils in the global economy that are caused by the economic weaknesses of the North (Japan, USA, EU).

 

As economists put it, the Philippine economy just entered a ‘virtual cycle’ of growth, thus ending a long arduous history of ‘boom & bust’ cycle. Much of the growth comes largely from the domestic demand itself, showing the great purchasing power of domestic institutions, households, and individuals when combined. Income from international trade plays only a secondary role in the country, which enables it to outsmart the vagaries of the unstable global economy.

 

In the past decades, so much of ‘organization re-engineering’ and corporate governance were infused into the Philippine business structures and processes. Business culture was also properly addressed by internal stakeholders, chambers of commerce, and management professional societies. The result, of course, is better adaptive capacity thru better competitiveness and higher productivity.

 

The trend in Philippine manufacturing had so far shown a consistent generation of high value-added by its labor force, followed by services. The two sectors have shown dynamism so far, thus making them the big drivers of the domestic economy. Agriculture is very sluggish in this respect, which challenges food producers to make up and move up their labor force’s value-added capacities.

 

Note also the trend of consistently high Net Factor Income from Abroad, which will continue to grow in absolute terms over the next decades. Remittances from overseas Filipinos (workers/professionals) continue to grow, contributing past $20 billions annually to the national income. Furthermore, overseas Filipino investments are growing by the year, in highly diversified concerns, so let’s anticipate the repatriations of profits from such business concerns to surpass remittances from overseas workers in the foreseeable future.

 

So far the credit standing of the Philippine economy has been moving up. Fitch’s, Moody’s, Standard & Poors’, and other institutions have been optimistic about the Philippine economic performance and good governance measures, which made them shore up the credit ratings nearer and nearer to the triple A mark.

 

The Philippine economy is still a Middle Income economy as of this moment. It if grows consistently at 7% per annum for succeeding years, then it can double its size in every 6 years. By 2025, PH economy will be 4 times its present size. At the end of that year, PH economy will have entered a ‘mature’ developed economy, and joins the club of 1^st world nations.

 

[Manila, 28 October 2013]

PHILIPPINES & ASIA CHEER UP GLOBAL ECONOMY FOR 2011

Erle Frayne D. Argonza

 

The yearend Holidays are now nearing, and so we all better cheer up for the forthcoming holiday season. As early as November, Christmas trees and gigantic lanterns were already set up in malls and public places in the Philippines, a very thoughtful way of demonstrating love and generosity.

 

There is much reason for the global economy to cheer up for 2011 as indicated by our own very optimistic business environment and national economy here in the Philippines. Our region ASEAN is mightily growing at robust rates, India and Korea are doing good, and China is very heatedly growing.

 

As already discussed by various analysts and writers, ASEAN + China + India + South Korea—dubbed as ‘Asian economy’—have been the growth drivers of the global economy as a whole. High growth rates, well managed liquidities, healthy macro-economic fundamentals, and high foreign exchange reserves all converge as multi-factor drivers of growth in Asia. As a result, consumption is still moving up here, thus compounding the growth toward sustained heights all the more.

 

The Philippines has its own good news to share to the globe. A ‘Santa Claus’ list of glad tidings shows the following:

 

• Philippine currency is the 2^nd best in Asia. Strong and trustable, even treasuries and bonds denominated in Peso are selling like hot potatoes.

 

• Foreign Exchange Reserves are at an all-time high of $56+ Billion (end of October), enough to buy almost a year of merchandise imports.

 

• Growth rate as of the 1^st two (2) quarters was at a whopping 7.9%, showing mightily good production levels. Yearend growth rate would be no less than 6.5% at the minimum, a figure that will be sustained well through 2011 and beyond.

 

• Local bourse has hit a high-time figure of 4,200+ points recently. This is way above the psychological breakpoint of 2,000 points (that now looks very Jurassic), and will optimistically breach 5,000 points by 2011.

 

• Overall GDP per capita (nominal) will breach $2,000 and will move up rapidly to the next levels over the next few years. Purchasing power parity or PPP per capita will exceed $10,000 around 2013-‘14.

 

• State wages have been moving up by 15% per annum consistently for couples of years now. This move drives up private sector wages as well. Wages will again move up in strides from 2011 to 2016.

 

• Inflation has been reduced down further, and will stay comfortably at the 2.5%-3.5% range by 2011. This is welcome news for a nation that is so fed up with hyper-inflations in the ‘80s and ‘90s.

 

• Unemployment has been going down steadily, and will be at a manageable level of 8% or lower by 2011. Rising growth rate can then be sufficient to address the other problem of underemployment.

 

• Exports and imports, or foreign trade, have returned to pre-global recession levels, thus contributing to more employment and higher wages.

 

• Filipino businessmen’s investments overseas have moved up, and will continue to expand in 2011 and beyond. These contribute to overseas remittances and employment of Filipino labor and experts abroad.

 

The list is longer than the above-stated, though suffice us to take note of that short list. Those items are fundamental to sustaining the economic machine year by year, reduce poverty till the middle class dominates the population, and shoot up human development to notches higher than today’s indices.

 

Japan, USA and EU are on economic fires but the dampening situations there won’t totally hurt the global economy. Emerging markets have done their best to insulate themselves against the fiascos and fires of the northern economies, thus enabling them to serve as the hope of the world.

 

The cheery environment of Asia should better be the one focused upon by our global citizens, a cheer that serves as the ‘Santa Claus grin’ of the global economy as a whole for this year and the ones forthcoming.

 

[Philippines, 06 December 2010]

 

[See: IKONOKLAST: http://erleargonza.blogspot.com,

UNLADTAU: https://unladtau.wordpress.com,

COSMICBUHAY: http://cosmicbuhay.blogspot.com,

BRIGHTWORLD: http://erlefraynebrightworld.wordpress.com, ARTBLOG: http://erleargonza.wordpress.com,

ARGONZAPOEM: http://argonzapoem.blogspot.com]