THE PHILIPPINES’ relatively fast economic growth remains a compelling proposition for investors notwithstanding the recent slowdown, bankers said in a forum late last week, citing particularly the lure of the government’s infrastructure push.
“Some of our economies are growing at less than three to four percent compared to the Philippines’ economy growing at 6.2[%], so clearly there are opportunities for us to get involved,” Asian Bankers Association President Antonio Jonathan Alles, managing director and chief executive officer (CEO) of Hatton National Bank in Sri Lanka, said in an interview at the sidelines of the 36th Asian Bankers Association (ABA) Conference at the Makati Shangri-La hotel on Friday.
Daniel Wu, president and CEO of CTBC Financial Holding Company Ltd., said at the ABA press conference: “We think that given the last five years, the average GDP (gross domestic product) growth was more than six percent, is really phenomenal…”, adding that Southeast Asian countries have “definitely become much more important than before.”
Mr. Alles particularly cited interest stoked by the infrastructure development drive of the government of President Rodrigo R. Duterte, saying: “I know that there’s a lot of infrastructure that is taking place here.”
“… [T]he good thing is that development is moving away from consumption into development and growth… those areas which would have sustainable long-term cash flows,” he said, adding that “there is opportunity to promote tourism…” as well.
Philippine gross domestic product growth picked up to 6.2% in the third quarter after last semester’s muted 5.5% expansion that was a slowdown from the year-ago 6.3%. Much of the blame was laid on late enactment of the 2019 national budget and the public works ban 45 days ahead of the May 13 midterm elections that led to subdued infrastructure work for six months. The latest clip fueled year-to-date growth to 5.8% against the government’s 6-7% full-year goal for 2019.
The International Monetary Fund now projects Philippine GDP growth this year to clock in at 5.7%, while the World Bank and Moody’s Investors Service have a 5.8% projection. The Asian Development Bank, the ASEAN+3 Macroeconomic Research Office, S&P Global Ratings and Fitch Solutions project Philippine economic growth this year at six percent, while Fitch Ratings — a sister firm of Fitch Solutions — puts it at 6.1%.
Under the government’s latest assessment, more than half of its 100 flagship infrastructure projects will be completed by 2022 — the year Mr. Duterte ends his six-year term. — Luz Wendy T. Noble