PHL seen to be SE Asia’s fastest-growing economy

Categories: Business Updates

Date Posted: 07 Jul 2014

THANK you to the Department of Trade and Industry (DTI) for furnishing us a copy of the May 2014 issue of its official newsletter, the Philippine Business Report. The newsletter offers an interesting round-up of economic news and statistics that provide a look at the latest in business, trade and investments, and more.

On its front page is an item about the Asian Development Bank (ADB)-published Asian Development Outlook that projects the Philippines to be the “fastest-growing economy in Southeast Asia for 2014 and 2015.”

This growth is to be boosted by the construction, business-process management, tourism and manufacturing sectors, along with government spending on infrastructure and other items.

Private consumption, benefited “by remittance inflows and positive consumer sentiment,” is also expected to drive growth, along with growing investor confidence in the country.

Construction is seen to increase because of strong demand for housing, offices and shopping malls.

The ADB’s forecast for the Philippines for 2014 growth is 6.4 percent, and for 2015, 6.7 percent.

***

MEANWHILE, the DTI is also looking at furniture exports to do well over the long term.

In the furniture-industry road map that they presented to the DTI, the stakeholders of the Chamber of Furniture Industries of the Philippines (CFIP) aim “to be the top exporter of furniture and furnishings in Southeast Asia by 2030.”

In 2012 total world production of furniture was worth $347 billion. The Philippines accounted for only 0.2 percent, showing that “there is room for the industry to grow.”

The CFIP’s goal is to reach export increases of 2-percent growth for every market in 2014, 5 percent in 2015, 7 percent in 2016 and 10 percent in 2017.

In addition to exports, the CFIP will also tap into local markets, given the rising number of “condominiums, hotels and corporate offices being built.”

***

WITH regard to exports, the DTI is exerting efforts to expand the number of industries that can be penetrated by Philippine goods, products and services.

Trade and investment missions will be conducted in Scandinavian countries (to “high-technology industries, including services and information technology”); Canada; the United States; established markets, like Japan and South Korea (manufacturing); and Western Europe (services and manufacturing).

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REGARDING construction and real-estate developments, Trade Secretary Gregory L. Domingo said the government might consider “tax incentives for affordable medium-rise condominiums in Metro Manila that will house ordinary workers near factories and offices.”

Such forms of housing would allow workers to live near their places of work, and not have to commute for long hours each day.

In the 2014 Investments Priorities Plan (IPP), Domingo said that “the government would continue to provide support for socialized housing and middle-income housing projects [in the IPP],” preferably “vertical developments,” because “horizontal development subdivisions [are a]…very inefficient use of land…that could be used for agriculture.”

Hopefully, this additional government support in the IPP would encourage private developers to go into vertical socialized housing.

Also in the newsletter is an item about how the Metropolitan Bank and Trust Co.’s (Metrobank) research arm expects the construction industry “to be a key economic driver in the next three years, due to its strong growth potential.”

Metrobank’s analysis points to “steady real-estate demand” that will boost private construction, especially since the cost of housing in Metro Manila will “drive growth in other regional hubs.”

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REGARDING infrastructure, the Department of Transportation and Communications (DOTC) is looking to pursue a P135-billion project “to build an underground mass rail service between the Makati Central Business District and Pasay City.”

This subway would help alleviate commuter troubles in the cities of Makati, Pasay and Taguig.

The project involves a 20-kilometer loop consisting of a 16-km tunnel and 4-km elevated railway, with 11 stations (five underground, four interchanges and two elevated).

The DOTC will forward the project to the National Economic and Development Authority before the fourth quarter, after which the project will be bidded out by the second quarter of 2015.

Infrastructure development in other areas continues: Last year the DOTC awarded P21.6 billion worth of projects for “100 projects involving airports, seaports and transport systems through competitive bidding.”

The projects range from the “rehabilitation and improvement of numerous ports and airports across the country to the supply of [Philippine] Coast Guard rescue equipment to the master planning of Metro Manila transport systems.”

Atty. Jose Ferdinand M. Rojas II is the vice chairman and general manager of the Philippine Charity Sweepstakes Office.

 

Source: http://businessmirror.com.ph/index.php/en/news/opinion/35000-phl-seen-to-be-se-asia-s-fastest-growing-economy

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