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26/04/2013: Filipino Economist Sees PH GDP Growth Expanding 7-9 Percent in Next 20 Years

26 April 2013

WASHINGTON, D.C.—The Philippine economy will continue to enjoy a 7 to 9 percent growth in the next several years, according to a prominent Filipino economist who along with Ambassador Jose L. Cuisia, Jr. spearheaded Manila’s latest efforts to convince more American companies to put their funds in the Philippines.

In providing an overview on the emergence of the Philippines as “Asia’s New Emerging Tiger,” Dr. Bernardo Villegas, co-organizer of the 2nd Philippine Investment Roadshow that earlier visited Los Angeles and Chicago, forecasted in a forum in Boston on Friday that the Philippine economy will grow at an average of 7 to 9 percent in the next 20 years.

“The key is to build stronger institutions so that the reforms undertaken over the past 25 years are irreversible, no matter who is heading the administration beyond 2016,” said Dr. Villegas, who has been described as the so-called “prophet of boom” of the Philippines.

“The Philippines’ emergence as ‘Asia’s New Tiger’ is a strong demonstration of a tipping point phenomenon – a result of the transformational leadership changes and the policy reforms introduced in almost 30 years,” Dr. Villegas added.

The 2nd Philippine Investment Roadshow, which was initiated by the Philippine Embassy in Washington, D.C., in coordination with the Philippine Consulates General in Los Angeles, Chicago and New York, concluded today with major presentations by the topnotch business delegation on strategic investment opportunities in key sectors such as business process outsourcing (BPO); mining; human resources; infrastructure and real estate; financial services; manufacturing, particularly electronics and medical devices; biotechnology and pharmaceuticals.

In his presentation, Dr. Villegas acknowledged the reforms undertaken by each Philippine President starting with the restoration of democracy under President Corazon Aquino and  the deregulation, liberalization, and privatization of state-owned entities under President Fidel Ramos. He also gave credit to President Jospeh Estrada for his emphasis on agriculture that led to the establishment of farm-to-markets roads and irrigation systems and to President Gloria Macapagay Arroyo for the promotion of tollways and the Nautical Highway and the stronger push to build more highways, airports, seaports, and school houses under the Public-Private Partnership (PPP) program of President Benigno Aquino III.

“But the capping stone is President Aquino’s strong commitment to good governance and the fight against corruption, which has restored the confidence and optimism of both international and local investors,” according to Dr. Villegas.

In his remarks, Ambassador Cuisia said he “strongly encourages American companies to invest more in the Philippines,” citing such competitive advantages as the country’s strategic location, highly educated bilingual and talented work force and its democratic system, a business-friendly environment and attractive tax incentives for key projects.

“In addition, the Philippines is part of the larger ASEAN market- which promises a large consumer base of 600 million that also has a strong purchasing power,” Ambassador Cuisia said.

On another note, the Ambassador also reiterated President Benigno S. Aquino III’s “personal message of deep sympathy, concern, and solidarity with the people of Boston.”

“We are optimistic that Boston will move past the tragedy and continue to be the world’s most innovative city, a cutting-edge research center, and an incubator of ideas,” the Ambassador said.

Other resource persons in the forum were ZMG Ward Howell Chairman Jesus Zulueta, Jr. who underscored the advantages of Filipino talent, which are in the areas of “education, adaptability, multicultural exposure, language; low cost and good labor-employer relations.” He said that Healthcare Information Management Outsourcing is the fastest growing business process outsourcing (BPO) sector in the country today with revenues growing from $102 million in 2010 to $430 million in 2012.

Rainerio Borja, President of Expert Global Solutions, said that the Philippine BPO sector will be a $25 billion industry by 2016 and will directly employ 1.6 million Filipinos, and account for 7.8 percent of gross domestic product. Borja said the Philippines is a top offshore BPO location because of its scalable educated talent pool; cost competitiveness; excellent infrastructure, government support and public private partnership; and proven track record.

Dr. Dan Lachica, President of Semiconductors and Electronics Industries in the Philippines, Inc. (SEIPI), in turn, confirmed that the electronics industry is the “driver of the Philippine economy” which makes up 55 percent of the total Philippine exports and directly employs 258,000 operators, technicians and engineers.

Philip Romualdez, President of the Chamber of Mines of the Philippines, confirmed the strategic importance of the mining industry to the country, which not only boasts of having the 5th richest mineral deposits in the world but which also account for “2 percent additional GDP growth in the next several years.”

“But we need to continue to employ cutting edge technologies in order to optimize the long-term feasibility of pursuing socially responsible mining projects in the country,” Romualdez said.

On infrastructure and real estate, Isidro Consunji, President of DMCI Holdings, Inc., also confirmed that growth in both the revenues and net income of listed real estate companies in the country has consistently been in an upward trend since 2008.

On the Philippine Capital Market, Roberto Dispo said that the Philippines is the first ASEAN country to comply with the Basel III capital formation reform” under the Bank for International Settlements. “It’s not only more fun in the Philippines; but there is more funds in the Philippines!” he echoed.

The $13-billion pharmaceutical and biotechnology industry was discussed by  Martin Pascual, Board Director of Pascual Laboratories, who said that continued improvements in the country’s Intellectual Property Rights regime will bolster growth prospects of the industry.

“A framework should be developed to address investors’ concern on transparent and accountability and that both the Government and the private sector should continue to collaborate to really accelerate research and development in the Philippines,” he said. ###