Back to a Bright Future – Aired May 2013
Strategically located in the heart of some of the world’s fastest growing markets, the Philippines of today is trying, once and for all, to break away from its troubled past and embrace a bright future.
Halfway through the term of President Benigno Aquino III, this Southeast Asian archipelago is riding a wave of heightened economic optimism. The government aims to tackle major infrastructure and social challenges through a public-private-partnership scheme designed to infuse much needed capital into projects that have long been set aside. Investor confidence is high, with the Philippines Stock Exchange hitting 38 record highs in 2012, a trend that continued into 2013 with 13 record highs in January alone. In fact, the Philippines’ GDP growth reached 7.1% in the third quarter of 2012, the highest GDP growth rate of any country in the ASEAN region.
The Philippines is still a fledgling democracy, with its current constitution only dating back to 1987 after the People’s Power Revolution brought the 20 year reign of former president Ferdinand Marcos to an end. While the Philippines’ development has since lagged behind many of its ASEAN neighbors, the Aquino administration hopes to usher in a new era of prosperity and progress through an economic agenda with transparency and good governance at its core. In 2012, the country took the historic step of impeaching the Chief Justice of the Supreme Court for failure to declare assets.
Although infrastructure development still has a long way to go, and more than a quarter of the population fall below the poverty line, the Filipino government is confident that curbing corruption will translate to not only more foreign direct investment, but will also allow them the financial flexibility to tackle these very problems.
Education, healthcare and infrastructure have been prioritized as areas of critical need, particularly with regard to delivering desperately needed services for the poorest of the poor. The Aquino administration is confident that addressing these areas will allow the country to finally enter into a period of inclusive growth, narrowing the vast chasm between rich and poor. While the challenges the country faces can’t necessarily be overcome at once, the government is confident that by investing in one of the Philippines’ greatest assets – it’s human capital – the Philippines can sustain the economic gains of the last three years.
While foreign direct investment inflows are dwarfed by remittances sent home by the nearly 11 million Filipinos working abroad, the international community is slowly but surely beginning to take notice of the reforms happening under Aquino’s watch. A top World Bank official recently called the Philippines the ‘rising tiger’ of Asia, and Standard & Poors has awarded the country a ‘positive’ outlook for 2013, a move that many observers agree could be a preliminary to investment grade status later this year.
While the international community has only recently begun to take notice of this South East Asian nation’s value proposition, Filipinos at every level are optimistic about the prospects of the economy, and nowhere has this been more evident than on the trading floor of the Philippines Stock Exchange. Organizations throughout the country are embracing a policy of good governance to attract more international investors to the country.
Shaped by centuries of colonization, the Filipino national identity is a curious mix of Asian, Spanish and Western influences. More than 3 centuries under Spanish rule left a legacy of soaring cathedrals and a culture with a distinct Latin flair.
Nearly fifty years of American occupation in the early 20th century can still be seen in the high degree of English fluency and the rampant consumerism displayed in the country’s multitude of shopping malls, the true center of life in urban Filipino culture. Despite their cultural significance, shopping centers have also proven to be key driver of local economies. Local retailers have been able to thrive, tapping into a youthful consumer market nearly a hundred million strong, in a country whose average age is just 23.
Despite a strong domestic base, and the adverse effect the rapidly appreciating peso has had on the country’s export industry, Filipino brands aspire to make their country known to the rest of the world. While the anticipated integration of ASEAN in 2015 bodes well for regional cooperation and trade, Filipino companies are already able to tap into communities of Filipinos scattered the world over.
A growing upwardly mobile segment of the population has been borne of the country’s developing business process outsourcing sector, or BPO. An industry that only a decade ago employed a scant fraction of the population, the Philippines has emerged as a global leader in the sector, with more and
The Aquino administration realizes that only by investing in its people can the Philippines develop into the advanced nation it aspires to become. The recent passage of a bill authorizing higher taxes on alcohol and tobacco has freed up much needed funds to deliver services to the poorest of the poor. The majority of these funds have been allocated towards achieving the goal of universal healthcare, although there are still major needs to be addressed, such as accessibility to medical facilities and a lack of health professionals in the provincial areas.
While the government aims to expand services throughout the country, there are a number of world class medical facilities within Metro Manila that are already attracting foreign medical travelers from around the world. Despite the fact that it remains a developing nation, the Philippines has hospitals that are as good or better than some of the best hospitals in the world, but capable of delivering services at a fraction of the price. Add to this the inherent warmth and hospitality of the Filipino people, and you have a formula that, when fully realized, could be a huge boom to the economy.
A tropical island paradise comprised of 7,107 islands, the Philippines is also a land of startling diversity. From the ancient UNESCO World Heritage rice terraces of Northern Luzon, to the white sands of Boracay, named the best island in the world by Travel and Leisure for 2012, it’s a country that has something for everyone. In Bohol, home to one of the world’s smallest primates, the Philippines tarsier, visitors can gaze across the Chocolate Hills or take a lazy float down a river on a floating restaurant. Filipinos take to the streets every year at hundreds of festivals across the country, and the nation’s location on the coral triangle means these warm tropical waters house some of the best diving on the planet. The common thread between all of these distinctive experiences is the warmth and hospitality of the Filipino people.
The Filipino government has prioritized tourism as a key economic driver based not only the country’s vast appeal to foreign visitors, but also as a means of protecting and maintaining the natural wealth of the country.
Filled to the brim with untapped potential, the Philippines of today is surging ahead despite its tumultuous past. With President Aquino taking the lead, good governance and the corporate commitment to reinvest into local communities are changing the economic landscape and paving the way for domestic as well as international businesses to thrive.