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[av_heading heading=’DREAM BIG ‘ tag=’h3′ style=’blockquote modern-quote’ size=” subheading_active=’subheading_below’ subheading_size=’15’ padding=’10’ color=” custom_font=” av-medium-font-size-title=” av-small-font-size-title=” av-mini-font-size-title=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” admin_preview_bg=”]
BY MANNY VILLAR
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WE ARE in a pleasantly unique situation, when everybody — from economists, monetary authorities, industries and even consumers — see a better economy in 2018.
A survey conducted by the Social Weather Stations (SWS) on September 23 to 27 found that more Filipinos were optimistic that their quality of life and the economy would get better in 2018.
Forty-seven percent of Filipino adults expect their lives to improve in the next 12 months against only four percent who expect it to get worse, yielding a net personal optimism of +42, classified by the SWS as “excellent.”
SWS noted that net personal optimism had been excellent (+40 and above) since December 2015, except in March 2017, when it was a very high +36.
The pollster attributed the two-point rise in net personal optimism nationwide to increases in Mindanao, Metro Manila and the Visayas.
It found 43 percent of Filipino adults who are optimistic that the general economy would get better next year, while 12 percent feel it would deteriorate, resulting in a net optimism score of +30, also classified as excellent. This was three points higher than the excellent +27 (39 percent optimistic about the economy, 12 percent pessimistic about the economy) in June.
Net optimism about the economy had been excellent (+20 and above) in all eight surveys since
December 2015.
In its latest meeting, the Bangko Sentral’s policy-making Monetary Board said foreign direct investments (FDI) are expected to reach $8.2 billion in 2018, in line with the sustained positive developments in the domestic economy, the expected improvement in global economic conditions relative to 2017, as well as the continued thrust toward fast-tracking and modernizing the country’s infrastructure.
Exports, on the other hand, are seen to continue receiving a boost from broad-based economic recovery in both advanced and emerging market economies. Similarly, shipments of imported goods are expected to continue to grow by 10 percent, propelled by higher Philippine GDP growth prospects for 2018, the likely rise in crude oil and commodity prices, and the expected increase in imports of raw materials and manufactured goods, with the latter gaining from increased government investments in infrastructure consistent with its “Build, Build, Build” program. Inflows from overseas Filipino
remittances, business-process outsourcing and tourism receipts are seen to continue in 2018.
By end-2018 the gross international reserves (GIR) level is projected to reach around $80 billion, which remains ample to cover more than seven months’ worth of imports of goods and payments of services and income.
In the industry sector, the information technology-business process management (IT-BPM) is expected to continue expanding in 2018, resulting from reaffirmed relations between the Philippines and the United States, the comprehensive tax-reform law, which is friendly to the IT-BPM industry, and the recent upgrade of the Philippines’s credit rating.
Metro Manila office take-up is projected at as high as 850,000 square meters next year, up from 750,000 sq m this year.
The Asian Development Bank (ADB) has again raised its economic growth outlook for the Philippines in 2018 over accelerating infrastructure spending and robust consumption.
In its December Asian Development Outlook Supplement, the regional lender now expects the country’s GDP growth to average 6.8 percent next year, from 6.5 percent and 6.7 percent estimates in its September ADO 2017 Update.
The latest 2018 forecast was the second hike since a 6.6-percent estimate made in the April 2017 ADO.
According to the ADB, its outlook for the Philippine economy assumes that growth in the government’s infrastructure program will accelerate, supported by improvements in budget execution, with more large investment projects under way.
We really hit the ground running, but we cannot ignore the challenges that remain. Foreign relations, where President Duterte’s initiative pave the way for investments and better relations with the world’s super powers, will continue to be a balancing act.
Some of the four other major issues that the President confronted at the beginning of his term will continue to be a tough problem to crack, like the drug problem.
During a meeting in Malacañang last month, the President said he was still determined and hoping to end the drug problem. Drug trafficking is related to the peace-and-order problem, so if you solve the drug problem you solve the peace-and- order problem.
The President has asked Congress to pass the proposed Bangsamoro basic law that is already in Congress, which is expected to end the Muslim insurgency in Mindanao.
The negotiations with the communist rebels are at a standstill, but the government has made it clear that it would not give in to everything that the rebels demand.
It is very important to address these problems because it would mean more investments.
The “Build, Build, Build” program will continue to roll out projects, but will have to contend with problems like capacity problems with contractors, agreements previously entered into and right-of-way issues.
All told, however, 2018 promises to be another good year for the economy.
***
This piece first came out in Business Mirror on Jan. 1, 2017 under the column “The Entrepreneur.” For comments/feedback e-mail to: mbv.secretariat@gmail.com or visitwww.mannyvillar.com.ph./PN
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