Despite a grim global economic environment, the Philippines is seen in an economic and political sweet spot where the biggest risk is getting lulled into complacency, business leaders said Thursday.
Security Bank and Bankers Association of the Philippines president Alberto Villarosa said in an interview that the domestic economy was on a very healthy ground and all the numbers were good.
“The economic indicators are in the right direction. Corporate governance and risk management policies by the BSP [Bangko Sentral ng Pilipinas] are in place,” Villarosa said.
Villarosa said the banking industry was healthy shown by the banks’ profit and loss statements. He said the balance sheet quality of the banking system was good, capital adequacy was healthy and the nonperforming loans were well managed.
While the debt crisis in the eurozone lingers, Villarosa said this should not spoil the country’s favorable momentum. The impact would have been worse for the Philippines if it is the United States, a major trading partner, that is in a fiscal crisis, he said.
Villarosa said the Philippine economy, which in the past had been heavily dependent on Western markets for its products, had already shifted its focus more on Southeast Asian markets.
“It’s a cause for concern but it’s not a cause for over-concern,” he said, referring to the eurozone crisis.
“My personal concern is the threat of complacency. There’s always a tendency (to be complacent) when everything’s going so great,” Villarosa said.
Speaking during the 2012 Economic Forum held by Security Bank, Former Finance Secretary Roberto de Ocampo said the Philippines was now attracting more foreign direct investments especially from Korea and Japan compared with the previous years.
De Ocampo said the business environment had greatly improved. “There’s perception of far less corruption and need for all kinds of business agenda. You don’t need to partner with somebody’s relative to do business,” he said.
“Even though things are still slow, the slowness to some extent presents challenges that can be turned to opportunities, the biggest of which is in infrastructure,” De Ocampo said, adding that the government’s public-private partnership projects were expected to attract more investments.