Friday, February 1, 2013
CHEERING FOR THE ‘BLUE-EYED BOY’ OF ASIA
I suddenly remembered how that struck me during our short visit to Manila the other year – the sheer abundance and variety of wares in stores that’s sprouted like mushrooms.
A Bloomberg report said strong consumer spending will fuel the Philippine economy this year and help make up for lower exports that’s being felt all around the region.
It cited World Bank data showing consumer spending growing vis-à-vis the country’s GDP which it attributed to foreign remittances, income from the flourishing BPO sector as well as a burst of manufacturing from Japanese investment. The Philippines is reportedly on the way to boasting the 2nd best performing economy in the world, next only to China (which is showing signs of slowing down, according to some economists).
Standard & Poor’s raised the Philippine’s sovereign rating outlook to positive, moving it closer to achieving the coveted investment grade this year (as some experts predict). “The Philippines,” Bloomberg quoted Singapore-based economist Vishnu Varathan, “is on a very good footing to remain the blue-eyed boy in the region.”
Ever the sharp money-man, Ambassador Jose Cuisia Jr. boldly told us during a pre-Christmas get-together at the Embassy’s Romulo Hall that the Philippine economy would grow “closer to 6 ½ percent” after the World Bank had just revised their Philippine projection from 5 to 6 percent. I should really start taking some bets from him – the economy actually grew by 6.6 percent according to the Finance Department – which makes Cuisia a prophet of sorts?
He said the Philippine stock market posted 37 record highs in 2012 (at least as of last December). “When I left the Philippines in April 2011, the index was 3,200; today, it’s about 5,700 which means 20 percent a year for the past 2 years and that’s why it’s one of the best performing markets,” he explained.
Still, I wondered aloud if it wouldn’t be better if at least the better part of that growth came through investments, foreign and domestic? Even amid the flood of good news, the Philippines continues to lag behind its Southeast Asian neighbors in terms of Foreign Direct Investments (FDI) – the “good investment” in contrast to portfolio investments or “hot money” that can move out of the country just as quickly as it goes in.
Although FDIs grew over 10 percent in the first 6 months of 2012, the United National Conference on Trade & Development observed it was much lower than the rest of Southeast Asia (e.g., $900 million FDI for the
vs. $27 billion for Singapore
or $8 billion for Indonesia,
$6 billion for Thailand, $4
billion for ).
Cuisia said FDIs are preferable because they translate into new factories and businesses that generate jobs and revenues over the long term. “The Philippines needs to attract much higher levels of FDIs in order to achieve its goal of sustained, inclusive high growth rates,” said economist Benjamin Diokno of the University of the Philippines. To do that, experts say, the country needs to level the playing field (which entails constitutional changes).
Moreover, a consumer spending-driven economy is good and pretty only for people who’ve got money to spend. The IBON Foundation in Manila estimates more than 4 million Filipinos are jobless and another 7 million earn wages that is barely enough to support a typical family of six in Metro Manila. And the number of working-age Filipinos is expected to hit 75 million by 2020. Those Filipinos need jobs, decent-paying jobs.
Watching from across the continent, the feats of the last couple of years – particularly under President Noynoy’s watch – is a source of pride (if we can cheer for Manny Pacquiao or Jessica Sanchez, shouldn’t we do it here as well?). It shows Filipinos can be great achievers, able to compete with the best in the world and meet the rigors of nation building.
But if President Aquino aspires for greatness – as all leaders should – his legacy will be defined less by how much the GDP grew than by how many lives were made better by it. The challenge is how to ensure its fruits are spread to the greatest possible number of Filipinos. And how it can be sustained passed generations, and perhaps more daunting, passed the nation’s future leaders.
I wish this not for myself but for Prince and Paulo.