The Philippines: The New Tiger of Asia

Transcription

1 The Philippines: The New Tiger of Asia Dr. Bernardo M. Villegas Ph.D. (Harvard) University Professor, University of Asia and the Pacific Manila, Philippines

2 The Philippine Economy: Reaching the Tipping Point Growth Rates of 7-10% possible in the next 10 years Result of over 25 years of slow and painful reforms Will be the 16 th largest economy in 2050 (The Wider World in 2050 Report, HSBC)

3 Top Economies by 2050 (From HSBC s The Wider World in 2050) Rank in 2050 Country Change in rank from previous HSBC study Rank in 2050 Country Change in rank from previous HSBC study 1 China Philippines U.S Indonesia +4 3 India Australia -2 4 Japan Argentina 5 Germany Egypt UK Malaysia Brazil Saudi Arabia +1 8 Mexico Thailand +6 9 France Netherlands Canada Same 25 Poland Italy Peru Turkey Iran South Korea Colombia Spain Switzerland Russia Pakistan +14

4 The Global Competitiveness Index rankings Source: GCI GCI Country/Economy Rank (out of 144) Score Rank (out of 148) Switzerland Singapore United States Germany Japan Hong Kong SAR Taiwan, China Malaysia Korea, Rep China Thailand Indonesia Philippines South Africa Brazil Vietnam India Lao PDR Cambodia Myanmar

5 Philippines 102 million Male Female Main Source of Competitive Advantage: Young and Growing Population Percent of total population Aged dependents: 3.5% Working age population: 50.5% (51M) Young dependents: 46% (47M) Source: United Nations, Department of Economic and Social Affairs, Population Division (2011). World Population Prospects: The 2010 Revision.

6 Philippines 2012 Performance* Philippine IT-BPM industry size ; US$ billion # FTEs (~ 000) % % % % % x% YoY Growth % % FTEs Revenue (US$M) Rev % inc. fr 11 Voice BPO 497,000 8,697 18% Non-voice BPO/KPO 154,380 2,470 20% ITO 57,078 1,160 17% Health Info Mgt & Care Engineering Services 45, % 10, % Animation 9, % Game Development 3, % TOTAL FTEs 776,794 13,174 19% 2016 Projections Global share 1 5% 6% 6% 7% 8% 9.5% 9.9% US$ 25 Billion IT-BPM Revenue 1.3 Million Direct Employment 1Philippines IT-BPM market as percentage of global offshore services market, in revenue terms *Cited from the Presentation of Mr. Bong Borja, EGS President and Country Head Sources: BPAP, ACPI, CCAP, GDAP, HIMOAP, PSIA

7 Overseas Filipino Workers, 2011 Europe 808,779 8% Africa 63,508 1% Oceania 451,042 4% Sea-based workers 369,104 3% East and South Asia 1,449,373 14% Americas and Trust Territories 4,326,059 41% Middle East 2,987,923 29% Total = 10,455,788 Sources: Commission on Filipinos Overseas

8 Positive Trends Stable democracy Improving governance Strong macroeconomic fundamentals Labor peace Educated, young, and English-speaking labor force Strategic geographic location: launching pad for AEC Renaissance of manufacturing High rate of savings due to OFW remittances Low rate of dependence on petroleum One of the emerging markets

9 Emerging Markets: Nest of EAGLES (Emerging and Growth Leading Economies) BRICA + South Africa Population (in Millions) GDP Value (in current prices, US$B) Foreign Exchange Reserves (US$B) Real GDP Growth Inflation F F Brazil , Russia , India 1, , China 1, ,181.4 a 3, ASEAN , b South Africa 53.0 a a a-estimates; b-2011; F-forecasts Sources: IMF World Economic Outlook, Oct. 2014; World Bank Key Development Data & Statistics; ADB Asian Development Outlook Oct 2014; Selected Basic ASEAN Indicators as of Aug. 14, 2014, asean.org.

10 The Next 11: Emerging Engines of Growth Country Population 2013 GDP 2013 (in millions) (current US$ B) Bangladesh Egypt Indonesia Iran Mexico , Nigeria Pakistan Philippines South Korea , Turkey Vietnam Source: IMF, World Economic Outlook, Database April 2014

11 Exports as Percentage of GDP SOUTHEAST ASIA Brunei Darussalam Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Vietnam Source: Key Indicators 2014 (ADB)

12 Population: Some regions outpace the average national population growth due to immigration REGION 2010 CAGR 2014e PHILIPPINES 92,337, % 100,387,941 METRO MANILA 11,855, % 12,889,589 CORDILLERA 1,616, % 1,757,827 ILOCOS 4,748, % 5,162,339 CAGAYAN VALLEY 3,229, % 3,510,684 CENTRAL LUZON 10,137, % 11,021,553 CALABARZON (SOUTHERN TAGALOG) 12,609, % 13,709,136 MIMAROPA (SOUTHERN TAGALOG) 2,744, % 2,983,954 BICOL 5,420, % 5,892,967 WESTERN VISAYAS 7,102, % 7,721,634 CENTRAL VISAYAS 6,800, % 7,393,025 EASTERN VISAYAS 4,101, % 4,458,879 ZAMBOANGA PENINSULA 3,407, % 3,704,409 NORTHERN MINDANAO 4,297, % 4,671,967 DAVAO REGION 4,468, % 4,858,136 SOCCSKSARGEN 4,109, % 4,467,847 CARAGA 2,429, % 2,641,006 MUSLIM MINDANAO 3,256, % 3,540,013 Source: National Statistics Coordination Board

13 Purchasing power: It is because income growths in these recipient regions are faster than the rest PER CAPITA GROSS REGIONAL DOMESTIC PRODUCT (at current prices) Region / Year Philippines 102, , ,603 NCR METRO MANILA 284, , ,170 CAR CORDILLERA 126, , ,413 I ILOCOS 61,834 66,722 72,677 II CAGAYAN VALLEY 50,425 56,295 61,800 III CENTRAL LUZON 84,855 90,229 93,745 IVA CALABARZON 125, , ,579 IVB MIMAROPA 61,646 63,318 64,137 V BICOL 35,968 38,569 42,206 VI WESTERN VISAYAS 53,488 57,598 61,325 VII CENTRAL VISAYAS 84,769 94, ,862 VIII EASTERN VISAYAS 57,549 53,803 58,451 IX ZAMBOANGA PENINSULA 56,473 61,146 63,643 X NORTHERN MINDANAO 85,891 90,793 95,655 XI DAVAO REGION 88,607 90,645 97,037 XII SOCCSKSARGEN 64,321 68,968 75,061 XIII CARAGA 43,688 48,741 51,146 ARMM MUSLIM MINDANAO 26,476 27,690 29,608 Source: National Statistics Coordination Board

14 Purchasing power: It is because income growths in these recipient regions are faster than the rest GROSS REGIONAL DOMESTIC PRODUCT (growth rates at current prices) Region / Year Philippines NCR METRO MANILA CAR CORDILLERA I ILOCOS II CAGAYAN VALLEY III CENTRAL LUZON IVA CALABARZON IVB MIMAROPA V BICOL VI WESTERN VISAYAS VII CENTRAL VISAYAS VIII EASTERN VISAYAS (5.4) 9.9 IX ZAMBOANGA PENINSULA X NORTHERN MINDANAO XI DAVAO REGION XII SOCCSKSARGEN XIII CARAGA ARMM MUSLIM MINDANAO Source: National Statistics Coordination Board

15 Macroeconomic Forecasts f 2015f Inflation Rate (ave % change) Peso-Dollar Rate (end) Gross Int'l Reserves ($B) GDP Growth Rate Industry Sector Services Sector GDP growth to accelerate due to added reconstruction work and robust private sector f Forecasts Sources: NSCB; BSP; Dr. Victor A. Abola, Philippine Economy: Going to Slow Down or Rebound? 2014 Year-end Business Economics Briefing, Nov. 12, 2014, University of Asia and the Pacific, Pasig City

16 Financial Market Forecasts f 2015f Inflation Rate (%) Peso-Dollar Rate (P/US$)* * 44.4* 44.8* 44-47* 91 day T- bill rate (% p.a.)* 2.0* 1.5* 0.3* 1.3* 2.0* 10-year T-bond rate * (% p.a.) PSEi (Level / % change) *Year-end forecast 5.1* 4.7* 3.3* 3.9* 4.4* 4, , , , Investment environment to remain friendly with low interest rates 8, f Forecasts Sources: NSCB; BSP; Dr. Victor A. Abola, Philippine Economy: Going to Slow Down or Rebound? 2014 Year-end Business Economics Briefing, Nov. 12, 2014, University of Asia and the Pacific, Pasig City

17 Weaknesses and Challenges Corruption Red tape and Bureaucracy High rate of poverty Vulnerable to natural calamities such as floods and earthquakes Inefficient infrastructures Low rates of investments to GDP Low Foreign Direct Investments Tribal conflicts in Mindanao

18 Sunrise Industries Agribusiness Mining Triple Ts: Transport, Telecom, and Tourism Infrastructures Automobiles Consumer durables IT-enabled and IT services Logistics and retailing Health care and medical tourism Education Construction and real estate Four Fs: Food, Fashion, Furniture, Fun

19 Seven Key Industries Agribusiness Business Process Outsourcing Creative Industries Infrastructures (Airports, Power, Roads and Rail, Seaports, Telecoms, Water) Manufacturing and Logistics Mining Tourism, Medical Travel and Retirement Source: Arangkada Philippines 2010: A Business Perspective, Joint Foreign Chambers

20 The Philippines: The New Tiger of Asia Dr. Bernardo M. Villegas Ph.D. (Harvard) University Professor, University of Asia and the Pacific Manila, Philippines