The Philippines seen as ASEAN economic frontrunner by Standard Chartered bank. (Credit: Standard Chartered Bank)
With the improvement of economies affected by the global recession in recent years, world renowned debt watcher Standard & Poor's (S&P's) and British banking giant Standard Chartered Bank recently said in separate reports that the Philippine economy is seen to continue on its upward trend and become the standout economy in Southeast Asia in 2013.
The Asia-Pacific region, which has endured half a decade of economic challenge, is expected to make progress in 2013. External factors affecting the region's economy with the European recession easing. The United States of America is also expected to grow faster. China has avoided an economic slowdown.
According to S&P's, Philippine growth is expected to reach 5.9 percent this year as the recession in Europe and America eases. More investments in tourism and the business process outsourcing industries have spurred economic growth to become more broad-based. These, combined with increased fiscal space, are putting the Philippine economy on a higher growth trajectory. The country holds a BB+ credit rating with S&P, a notch investment grade. It also obtained a positive outlook in 2012, indicating that an upgrade could be announced over the next 12 to 18 months.
According to the Standard Chartered Bank, a recent survey of more than 900 investors in the Association of Southeast Asian Nations (ASEAN) saw the Philippines emerge as the frontrunner in the region. The survey showed that 74 percent of investor-respondents in Manila expect to see better business prospects in 2013 compared to the year before, dwarfing scores in Jakarta (46%), Bangkok (44%), Singapore (44%), and Kuala Lumpur (41%).
We congratulate the government of the Republic of the Philippines headed by H.E. President Benigno S. Aquino III and Vice President Jejomar C. Binay, in their unrelenting efforts in boosting the Philippines' economic growth.
Further Positive Outlook for Foreign Investments
Ellspermann's sentiments are ones that are shared by an overwhelming number of foreign businesses.
The projections of Standard Chartered Bank for the Association of Southeast Asian Nations (ASEAN), drawing from a sample of over 900 investors, indicate the Philippines is in the lead for areas of development—edging out even Singapore and Malaysia, a fact illustrated in the adjacent chart:
"The Philippines was the standout country in terms of the strength of on-the-ground sentiment," Standard Chartered noted. "We expect the Philippines to see stronger investment growth this year, sustaining the strong momentum from 2012."
"The case for investment grade is supported by a number of factors, including a resilient economy, a current account surplus, stable fiscal policy, and the narrowing of the budget deficit," the bank explains, solidifying its outlook.
The study also cited improvements in infrastructure, the peace process with the rebellious Moro Islamic Liberation Front, the increasingly strong peso, and the progressing decreases in the national deficit (aided by the new "Sin Tax") as additional reasons for their report.
"We are optimistic that the Philippines will outperform the region and enjoy another year of strong growth momentum in 2013," Standard Chartered said, adding that they expected that the Philippines will reach investment grade by the end of fiscal year 2014.
Furthermore, the continued strengthening of the stock market has increased confidence in companies seeking to invest in the Philippines. The expansion of BPO offices is ongoing as well, despite the waning of this type of business in other nations in Asia. For the Philippines, the indications are clear.
The international economy continues to recover from far-ranging economic crises, and more and more businesses are veering away from established practices and looking towards a sustainable future.
As an investor favorite, the Philippines is at the forefront of development, ready to lead a region on the cusp of becoming a global economic giant.
With reports from Tempo and the Washington Times
