Take-aways from the FMAP Convention: Sustaining Growth in the next 5 years
by Timothy Manuel Jesus S. Salak IV
The world can no longer call our country the “Sickman of Asia” as the Philippines has been in a “sweet spot” in terms of growth. According to Joey Cuyegkeng, senior economist of ING Bank, the Philippines’ strong growth is likely to continue over the next few years given a relatively favorable global environment, coupled with strong local growth and moderate inflation. Consequently, it is possible for the Philippines to maintain or even improve its credit rating and to keep a growth trajectory of at least 6% up to 2020.
Mr. Cuyegkeng reiterated that in order for the country to ensure this outlook and build on existing improvements, there are some internal factors that the government must address. The first is to enhance employment in agriculture, as this sector has lagged in comparison to manufacturing, services and construction. Second, despite the remarkable economic growth, joblessness remains high and must be addressed. Third, the demographic profile must be tapped as a driver of growth. Fourth government spending in infrastructures and social services must be maintained. Fifth, power must be sufficient and reasonably priced. Lastly, the country should maintain its healthy external payments which is currently supported by strong OFW remittances, adequate FX Reserves, and a low interest rate environment.
These are the challenges that the country’s leadership must overcome in order for the Philippines to maintain its “sweetspot”, sustain its gains and become more competitive.