The Philippines’ young population and its reform-minded government that is bent on pushing for further improvements in the country’s finances are among the reasons the local economy should continue to outshine other emerging markets in the coming years, according to a London-based think tank.
Capital Economics also cited robust foreign exchange income from remittances and the manufacturing sector’s resurgence as factors why investors should stay positive about the Philippines.
“The Philippine economy came through the disruption caused by Typhoon ‘Yolanda’ reasonably well, posting healthy growth in the fourth quarter of 2013,” Capital Economics said in a report late last week.
“The outlook is also bright, with long-term growth prospects among the best in Asia,” the firm added.
In 2013, the domestic economy as measured by gross domestic product (GDP) expanded by 7.2 percent, one of the fastest growth rates in Asia, second only to China.
The country’s young population should also work to the country’s advantage.
Capital Economics said the Philippines’ demographics was entering a sweet spot, where a large part of the population are of working age, and therefore at their most productive.
Provided jobs can be found for these people, Capital Economics said the rapid increase in the working age population could further boost the country’s already-impressive economic growth.
Meanwhile, after decades of lagging behind the region, the local manufacturing sector was now growing faster than the region as a whole.
“A high level of spoken English, plenty of young workers, low labor costs, and rising salaries in China mean the Philippines is better placed now than it has been for a very long time to develop a competitive manufacturing sector,” the firm said. Paolo G. Montecillo