Trade Secretary Gregory L. Domingo sees rosy prospects for the Philippines over the next decade with the economy expected to grow by about 6.5 percent yearly on the back of the reforms implemented by the Aquino administration over the last five years.
“During the period, the Philippines has grown by an average of 6.3 percent in terms of gross domestic product (GDP), one of the highest in the region. Going forward, given the growth momentum and demographics as such, we should expect to see continued high growth in the Philippines for years or decades to come,” Domingo said.
“The average for the next decade should even exceed (6.5 percent) yearly,” he added.
Domingo declined to cite estimates for this year but said he expected the economy to grow at a faster pace in the second half given increased spending by the government on infrastructure projects and the national elections in May next year.
Exports have started to recover with more local firms benefiting from the European Union’s new generalized scheme of preferences, which provides zero duties on over 6,200 product lines. A lot of foreign investors are likewise coming in, investing in the Philippine manufacturing industry, and putting up “mega factories” which would not only generate tax revenues for the government but will also make available more jobs in the countryside.
“The stars are aligned for the Philippines in the next few decades. What the government needs to do is ensure that the labor force will be properly educated and/or trained. A second major component to sustain growth is the infrastructure, in which the current administration is putting a lot of emphasis,” Domingo said.
From 2010 to 2015, the infrastructure budget has risen 3.5 times from P165 billion in 2010 to P535 billion in 2015, which was equivalent to 2.5 percent of GDP. The target is to ramp up infrastructure spending to 5 percent of GDP by 2016.
“The future looks quite good from an overall economy growth perspective. The challenge is how to make it inclusive… and part of the solution is trying to grow the MSMEs, which comprise over 99 percent of enterprises, provide about two thirds of employment, but represents only one third of the value of GDP,” Domingo said.