Refreshing transition

MANY Filipinos belonging to the millennial generation grew up in a world that looks down on their country. When it comes to economics, we were the laughing stock, and the most common label attached to the Philippines was “economic laggard.”

Even international institutions criticized us for not being able to get our act together despite our wealth in natural and human resources

In fairness, there were years when we turned in impressive performance in terms of Gross Domestic Product (GDP) growth. We thought it was the start of an upward trajectory. Yet the GDP growth slowed down in the following year; the “impressive growth” was just a glitch, and we quickly retreated to playing catch-up.

The bad impression and the criticisms were not heaped only on the young generation. My business takes me to many foreign countries, so I could not always avoid being at the receiving end of the unpleasant assessment of our economy and the comparison between the Philippines and our neighbors.

Fast forward to 2018. Just last week, the BusinessMirror as well as the other major dailies came out with a report, which cited the Asian Development Bank (ADB) as giving the Philippines what I would consider as the biggest vote of confidence.

“I say this to my colleagues, the Philippines is in like a golden age for its economic growth. It has been growing at this pace for several years, and it is in its strongest economic expansion in over 40, 50 years,” ADB Philippine Country Office Director Kelly Bird said in a briefing.

What makes the assessment more significant is the ADB’s reputation as a conservative institution when it comes to evaluating a country’s performance and predicting its prospects.

This kind of growth, according to Bird, is based on solid macroeconomic fundamentals that can be sustained in the medium term.

“It’s quite a virtuous cycle, that’s why I call it a golden age for the Philippines, because it’s growing in a very sound macroeconomic policy framework,” he added.

He noted that the Philippines’s recent economic growth occurred at a time when there is also moderate inflation, low deficit, declining debt and investment-grade rating.

The country’s fiscal position remains strong, with a deficit of only 2.2 percent of GDP and national debt standing at around 42 percent of GDP, the lowest in 20 years.

According to Bird, this will be strengthened by the revenues from the Tax Reform for Acceleration and Inclusion program, estimated at P90 billion this year and P140 billion next year.

The ADB also believes that reforms are in place to support the government’s infrastructure plan that will continue to sustain growth over the medium term.

In its latest forecast, the regional lender said the country would sustain growth in 2018 and 2019, as reforms are in place to support the government’s infrastructure plan that will continue to sustain growth over the medium term. Bird says the infrastructure program is important in alleviating poverty, which is relatively high compared to high-income countries.

The ADB’s Asian Development Outlook report projects Philippine GDP growth at 6.8 percent this year and 6.9 percent in 2019, up from 6.7 percent in 2017. In addition to infrastructure spending, rising domestic demand, remittances, and employment will drive growth.

Other institutions expect the Philippines to be one of the world’s fastest-growing economies this year. Surveys among foreign investors list the Philippines as one of the best destination for investments. Last year, net foreign direct investment (FDI) reached $10 billion.

We could not have predicted that we will be number one in economic growth. That’s very unusual for us.

The climb from a laggard to a leader is quite a transformation, even on a personal basis. These days, when I travel abroad, it’s very refreshing to hear what foreign businessmen are saying about our country. It makes me proud to be a Filipino.

It is very refreshing when you look back and be inspired as as we prepare for the next generation. With the continuous advance of GDP, per capita growth – there’s no stopping us from advancing to upper middle-income economy in two to three years. And if we can sustain our economic growth, in four more years we will be a completely different country.

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This piece first came out in Business Mirror on April 30, 2018 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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