DTI confident GDP growth in 2015 to exceed 7%

Trade Secretary Gregory L. Domingo is confident the growth of the Philippine economy will accelerate to about 8 percent this year, with the continued softening of global oil prices and rising domestic consumption.

“This year, the expectation is (that the gross domestic product) will be above 7 percent. But if oil prices will remain below $60 a barrel, then I think (GDP growth) has a fair shot of exceeding 8 percent,” Domingo said during the 18th Outstanding Filipino Retailers and Shopping Centers of the Year Awards night held Wednesday.

According to Domingo, other factors behind his bullish outlook include election spending in the second half of the year; rising GDP per capita, which was estimated to be at about $3,000; continued growth in the local business process outsourcing sector; as well as the strong flows into the manufacturing sector, which is poised to grow by 8 to 10 percent this year.

“Of course there are unknowns. If there will be brownouts that will be more severe than expected, that will slow down the expected growth,” he added.
The trade chief noted, however, that for the strong GDP growth rate to be sustained, the government must continue implementing reforms and calibrate the liberalization of the local economy.

“We cannot liberalize too fast, but we cannot afford not to liberalize our industries because we will remain uncompetitive,” Domingo explained.
“Our fastest growing sectors are the ones we deregulated 10 to 20 years ago, such as the BPO and manufacturing sectors. We liberalized in terms of lowering the tariffs and enabling the private sector to come in and put up their own projects. So even though there are short term pains when you liberalize the economy, over the long term, it will be good for the growth and competitiveness of our industries,” he said.

Domingo said among the sectors that may be further opened up are infrastructure, transport, logistics, retail and services-related industries.

“Slowly over time, we can lower the threshold concerning the entry of foreign retailers in the country. We also need these foreign retailers because to make the Philippines a regional retail hub, we need to bring in the brands that will pull in the tourists,” he added.

“For us to have a multi-decade growth, we need to have a continuation of economic policies and regulatory reforms. We need continued massive investments in education and infrastructure. If we stop our investments in these two sectors alone, we cannot expect to have long term growth prospects,” Domingo added.