What to expect in 2015
2014 has been a truly eventful year for the Philippines economically and financially speaking.
The economy continues to be strong despite challenges; remittances from Overseas Filipino Workers do not show signs of slowing down; the stock market is performing admirably; we experienced another credit upgrade; we continue to register good macroeconomic indices; we are experiencing improved fiscal and debt consolidation and sound monetary management; and natural calamities this year were less severe.
Still, there were many challenges that we faced in 2014, particularly on inflation and our unemployment numbers still have a lot of room for improvement. Despite the challenges, it is evident that 2014 has been a good year for the Philippines.
What about 2015? Are we still going to experience a good year?
There are still many challenges that face the nation such as lack of efficient infrastructure, inflationary pressures, efficiency in tax collections, and addressing corruption seems to be beyond a Herculean task.
However, there are many things to look forward to in 2015.
Infrastructure projects seem to have gained momentum; OFW remittances and the Business Process Outsourcing (BPO) sector will continue to generate billions of dollars in revenues; and the manufacturing sector is expected to grow the way it did in the last two years. We are already aware of these things so what else is new? Well, in 2015 there are exciting things for us to look forward to –the integration of the member-countries of the Association of Southeast Asian Nations and our entering the demographic ’sweet spot’, among other things.
Asean integration will begin in 2015, and the creation of an economic community will give us many opportunities depending on how we handle ourselves. There are sectors where we will have competitive edge over our neighbors, but there are also sectors where we will be at a disadvantage.
The demographic ’sweet spot’ is the period when the majority of the population of the country reaches its most productive stage: between 15 and 65 years old. Studies have shown that countries that enter this ’sweet spot’ experience the highest economic growth in their history. The experiences of Japan, Korea, Hong Kong, Singapore and China support this theory. Our demographic ’sweet spot’ starts in 2015 and will run for about 30 years or until 2045.
I asked some of my colleagues about their own expectations for 2015 and their answers are all noteworthy.
Economist and Ateneo de Manila professor Dr. Alvin Ang says that the opportunities for growth will be different for small and medium scale entrepreneurs. Dr. Ang recommends that small entrepreneurs focus on services particularly travel and tourism related; while medium entrepreneurs should look at developing products that can connect to the Asean food chain such as food processing. Investments should also see robust growth in infrastructure-related activities and the release of industry road maps in 2015 would provide government priorities, which we should monitor, Dr. Ang adds.
With our entry to the demographic ’sweet spot’, investment expert and former chief investment officer of BDO, Marvin Fausto, says that 2015 is the best time to start investing (for those not investing yet) as he anticipates a bright economic future for the country. Marvin Fausto is set to launch an online “funds supermarket” which will help ordinary Filipinos get into investing easier. Mr. Fausto believes that investing should be for everyone and 2015 should be a good time to start doing so.
AIA & Philam group’s Rex Mendoza, on the other hand, believes that the country will continue with its economic growth trend in 2015. However, he feels that for investments, it will be a year of effective selection as a number of industries and companies will do much better than the others. Proper selection will be key to growing investment portfolios.
There are indeed many opportunities waiting to be tapped in 2015 and the years to come. I agree that the economic growth we are experiencing is sustainable. But fostering inclusive growth is a task not just left to our economic managers and policy makers. It will also be up to us to a large degree. There will be income growth opportunities for many of us and that’s a given, but what we do with those incoming monies will determine our own financial future.
If we save and invest properly in the coming years, we will definitely be included in the economic growth the Philippines will experience in the coming years. 2015 should be a good enough reason for us to start preparing for our future. The best decision you can do for yourself is to start.
You can still avail yourselves of my books Money Manifesto: Lessons in Personal Finance and No Nonsense Personal Finance: A Step by Step Guide through discounted bundles until Jan. 7, 2015. Visit http://www.randelltiongson.com/discounted-bundles-extended/ for details and how to order.
A blessed New Year to all!
(Randell Tiongson is a Registered Financial Planner of RFP Philippines. He is speaker, trainer, columnist and author on personal finance. To learn more about financial planning and how to become RFP, attend our free personal finance talk on Jan. 8, 2015 at PSE Ortigas. To reserve, e-mail at [email protected] or text <name><email><RFPinfo> at 09173464126.)
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