DESPITE some hiccups caused by natural disasters in the final quarter of last year, the Philippine economy remains as one of the fastest-growing in Asia.
It was a remarkable turnout, with the Philippines finishing at 7.2 percent overall for 2013, just a little behind China’s 7.7 percent.
Now that those threats are behind us, and the country is slowly recovering, 2014 bodes well for the economy’s outlook.
According to Fitch Ratings, the country maintained strong economic growth in the first three months of 2014. The rating firm affirmed the Philippines’ Long-Term Foreign and Local Currency Issuer Default Ratings at ‘BBB-’ and ‘BBB’ respectively. With both outlooks stable, Fitch expects a 6.5 percent growth for the Philippines in 2014.
The country’s competitiveness ranking was underpinned by a steady inflow of overseas Filipinos’ remittances, low interest rates and the Aquino administration’s economic stewardship.
Export of services was another key growth area while the business process outsourcing (BPO) industry continues to boom.
Growth in other sectors such as manufacturing, trade, real estate and finance will help keep the local economy in sound shape and will continue to improve this year.
Fitch also said that the Philippines’ credit rating will be upgraded if stronger policy efforts — to improve the country’s business climate and to encourage domestic and foreign investments in the country — are implemented.
The World Bank (WB) also shared the same sentiments on the Philippines’ economic standing. The Washington-based lender said that due to the country’s strong macroeconomic fundamentals, the economic growth managed to accelerate to 7.2 percent last year.
Despite the onslaught of typhoon Yolanda and a string of natural disasters throughout 2013, the WB still projected 6.6 percent and 6.9 percent growth in 2014 and 2015, respectively. The WB also advised that to sustain this growth, the country must put structural reforms in place.
The Philippine Statistics Authority (PSA) recently reported that unemployment actually increased from 7.1 percent in 2012 to 7.5 percent 2013. This means that amid the economy’s robust growth, 2.97 million more Filipinos are still without jobs.
Underemployment, brought about by overqualification or being hired on a part-time basis, has been a festering problem.
The PSA reports that 2.8 million Filipinos are now underemployed and are seeking better livelihood situations. By May this year, about a million fresh graduates will join the Filipino workforce.
The government has successfully utilized the country’s momentum to encourage businesses and tourists to invest in the country. To keep this momentum at a positive pace, it should encourage the creation of more job opportunities for Filipinos, in order to alleviate poverty.
The positive reports and assessments are a welcome development. But for this economic growth to have a lasting impact, it must first ensure an inclusive and sustainable effect on the people it serves — Filipinos.
(AJPress)
