Optimism in PH reigns supreme; CEOs upbeat
WINHOFFER (leftmost) and Vohra
MANILA, Philippines—The main-share Philippine Stock Exchange index charged out of the gates as soon as trading started on Jan. 2 and hit a new record high of 6,091.18 on Jan. 9.
Observers consider the record-breaking performance of the local bourse as an indication of unwavering confidence in the growth prospects of the Philippines in 2013.
Sanjiv Vohra, Citi Country Officer for the Philippines, cites many reasons to be optimistic about 2013.
“We see more pronounced growth drivers in 2013 that will sustain the positive momentum of 2012. Fiscal spending remains a key driver, and the accelerated government spending along with stable domestic demand have led to upgrades in Gross Domestic Product forecasts,” Vohra says.
Vohra adds that the Philippine economy is at the cusp of investment-driven growth with the contribution of real investments now at 20 percent for the past few quarters.
“A better fiscal health is enabling the government to be more proactive in stimulating the economy. Aside from the public-private partnership infrastructure agenda, government is embarking on a P325 billion multi-year flood works and drainage program, a spending larger than the P233 billion cost of the PPP projects. We believe this may lift the country’s investment/GDP ratio that will eventually accelerate economic growth,” he says.
“Over the next three years, the potential for per capita GDP to reach $3,000 to $5,000 will clearly depend on investment-driven growth. Key feature of investment driven growth will be stronger onshore job creation that has been missing in past high growth episodes driven by consumption spending,” Vohra says.
As to risks, he says that a strong peso has to be managed well as rapid peso appreciation can dilute purchasing power of the OFW remittances when converted to local currency.
Mariels Almeda Winhoffer, president and Country General Manager of IBM Philippines, is also looking forward to a good year for the Philippines.
“Based on the country’s GDP targets for 2013 and 2014, and barring any negative global influences, we expect the growth of the Philippine economy to remain strong in the next two years,” says Winhoffer.
“From an IBM perspective, the company aims to sustain its significant growth in the Philippines, which is identified as part of IBM’s 20 priority growth markets from across the world,” she says, “Also, in line with the government’s push to drive transformation toward a smarter Philippines, we will continue to align our initiatives to support the national economic growth agenda to capture and realize the tremendous potential of our country, especially in the higher value services space that will be driven and enabled through the promise of analytics.”
Given these rosy projections, Winhoffer says the challenge for IBM is to quickly scale up to seize the growth opportunities in the Philippines.
Philips Electronics & Lighting, Philippines is also gearing up for more business in 2013, according to Philips country manager Fabia Tetteroo-Bueno.
In lighting, for example, Bueno says that Philips sees growing demand for cost-efficient LED lighting solutions, due to the increasing cost of energy consumption, as well as the growing awareness on the environmental implications of using non-LED based products.
Philips also foresees an increase in demand for health and well-being solutions as society ages and Filipinos become more conscious about their health.
Healthcare is another growth sector for the multinational company.
“The Aquino government has expressed its commitment to provide Filipinos with access to quality healthcare. Because of this, there may be a move to expand and/or improve public and private hospitals and medical centers, in order to accommodate more patients, and offer more services. Philips intends to address this growth by providing healthcare facilities, as well as local government units, with high-quality diagnostic and imaging equipment,” she says.
