The Philippine economy may grow by as much as 9 percent by the end of this decade once the government puts an end to the ongoing armed conflict in Mindanao and addresses the issues surrounding the implementation of the Mining Act.
Richard Martin, managing director of consultancy firm IMA Asia, made this optimistic forecast during the general membership meeting of the Management Association of the Philippines (MAP) on Friday.
Martin cited the tremendous potential of the country given the current robust economic growth.
“We can see the Philippines growing by 6.5 to 7 percent by the end of the decade. But if you fix the insurrection in Mindanao, the issues of the mineral sector and, if you open more for business, you can have an 8 to 9 percent growth. [The Philippines] has the capacity to do it. It’s just a matter of removing the roadblocks,” Martin explained.
In particular, he pointed to the ongoing standoff in Zamboanga, which could adversely affect the economy and foreign investors’ perception of the country.
“It is an issue because there is so much potential in the south of this country that, if you can open up the peace talks [and resolve the conflicts], it can bring in more investments. I don’t see this knocking over the Philippines, but it slows down the country. If you can fix this, you can do much better,” Martin explained.
As it is, the Philippines, with its 7.5-percent gross domestic product growth in the second quarter of the year, has attracted the attention of many companies across the globe, Martin said.
Add to that is the throng of good news about the Philippines, which has “gone up to investment grade rating” courtesy of Fitch Ratings and Standard and Poors.
Martin also mentioned the sturdiness of the peso and a President who remains popular.
“We’re getting the investment numbers up and [the Philippines] is moving towards the right direction,” Martin yesterday told the members of MAP.
“The game to play over the next five years is to make sure you remain on an investment grade rating and to have sound proposals for the utilization of capital on the ground. Money will come,” Martin stressed.
He further waxed optimistic that fixed investments in the country would continue to rise and could even go up to as much as 25 percent of the country’s GDP.
At that point, however, the country needs to beef up its capacity in terms of power and infrastructure.
The country may also experience a boost in manufacturing as many foreign companies are “desperate for factory capacity.”