The ‘dark horse’ of Asia | Inquirer Business
MAPping the Future

The ‘dark horse’ of Asia

In a recent article, the Philippines was cited by an analyst from Bank Julius Baer, Mark Matthews, as an attractive site for fund managers to place their portfolio investments, because of its favorable demographics and sound economic fundamentals. The same enthusiasm seems to be echoed by analysts from Bank of America-Merrill Lynch who showed to their fund managers an overweight position in the Philippines.

What were the bases for their enthusiastic outlook? They seem to be impressed by our leading role in sending workers to all corners of the globe, making the country known as having the potential for being a huge market for the banks, the third-most preferred by fund managers in Asia, trailing China and Indonesia.

“The Philippines’ very robust and young population presents a ready pool of talent”, says Matthews, who expects that the country’s population will reach 190 million in 2040. “With fertility rates declining in the west and in countries like Japan and China, the Philippines will increasingly become a more important source of immigrant labor.”




“And the interesting thing is 80 percent of the Filipinos speak English,” he says. “Most people who speak English in third world countries do not want to go overseas to work in sort of manual labor. But Filipinos have no problem doing it … and they are making three times as much as they are making back home (if they have any work at all locally). And they are sending most of it back home.”

The Philippines is one of the biggest recipients of remittances—the fourth-biggest in 2010 per the World Bank—which accounts for 10 percent of GNP. The total remittances for this year are expected to reach $20 billion. It is roughly 50 percent of our export earnings.

We are grateful to the analysts of Bank of Julius Baer and Bank of America-Merrill Lynch for their favorable views on the Philippines. However, the bases for their articles are rather shallow and may only invite those with short opportunistic agenda for taking over the big passive markets from weak local firms, and not for the long-haul investors looking at long-term prospects.

Exponential population growth and 1 of 10 Filipinos having to leave their homes for overseas work are not exactly the strongest features of our country. Our economists consider the latter as a symbol of our failure to provide them opportunities for decent earnings locally for optimum human development. Working overseas is the option taken by many as a kind of a “relief valve” when the pressure of joblessness, like keeping body and soul together, becomes untenable. This lack of earnings opportunities, despite the abundant natural resources and talents of its people, is a reflection of the country’s failure in the past to develop certain of our industries, agribusiness, services, etc., to be sufficiently competitive with the rest of the world.


The legitimate investors are looking for emerging economies that are poised for sustainable growth, with predictable policies and governance standards, a rising middle class, with young population and a mix of resources.


These qualities are present in the new toasts from the emerging countries that are collectively known as the “civets.” This acronym stands for Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa, which collectively share the “up-and-coming” expectation by investors to achieve growth rates higher than the G7 of the West, as they develop their diverse economies led by their young population to take their stellar place in the world.

While all of them share the challenge of political uncertainties, their young populations are in the frontline of transformation, which will open the world to their strengths and attractions, guided by sound economic fundamentals and development strategies.

Already, the “civets’ are catching up with the better-known “brics” (Brazil, Russia, India, China) that have achieved dizzying rise in the economic well-being of their people, breaking out from the shell of poverty, hopelessness and social schisms of the past centuries. Both the “brics” and the “civets” are now being touted by experts as possible keys to helping solve the floundering situation in Europe and North America.

The Philippines is inching its way to the upper echelon of the emerging economies, which will be of stronger and sustainable interest for investors (both local and foreign). The new President is single-mindedly pursuing the elimination of corruption in both the public and the private sectors, and is achieving progress with the help of the private sectors, like the Institute of Corporate Directors and the Institute for Solidarity in Asia.

In demand

Many public institutions are undergoing structural and behavioral transformation with tools, such as the Performance Balanced Scorecard, together with their stakeholders from the private groups. The President’s economic team, while maintaining their strict financial standards, is developing the global potentials of our resources which are in demand by the world market.

With the help of private investors in making the desired developments and infrastructure come to reality, the creation of more job opportunities will diminish the need for people to go overseas for a living, decrease the poverty level and, hence, families can better manage their future.

It is for these reasons that the Philippines is indeed the “Dark Horse of Asia.”

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(The article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines. The author is former private sector co-chairman of the National Competitiveness Council and former secretary of the Department of Trade and Industry. Feedback at [email protected]. For previous articles, visit

TAGS: economy, Philippines

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