The Philippine economy is seen to continue on its record-breaking upward trend and become the “standout” economy in Southeast Asia in 2013 as the economies affected by a global recession improve, world renowned debt watcher Standard & Poor’s (S&P’s) and British banking giant Standard Chartered Bank said in separate reports recently.
S&P’s said it projects Philippine growth to hit 5.9 percent this year as the recession in Europe and America eases.
“For the Asia-Pacific region, which has endured half a decade of leaden skies hanging over the global economy, some rays of sunshine could burst through in 2013,” the debt watcher said in a report.
“External risks to the region have abated with the European recession easing. The United States is also expected to grow faster despite spending cuts, while China seems to have avoided a hard landing,” it explained.
It noted that the lower growth “than the better-than-expected 6.6% notched in 2012” was attributed to the dip in base effects.”
S&P’s also pointed out that more investments in tourism and the business process outsourcing industries have spurred economic growth to become more broad-based.
“These structural changes, combined with increased fiscal space for higher public infrastructure investment, are putting the Philippine economy on a higher growth trajectory,” it said.
The country holds a BB+ credit rating with S&P, one notch below investment grade. It also bagged a positive outlook last December, indicating that an upgrade could be announced over the next 12 to 18 months.
For its part, the Standard Chartered Bank said that a survey of more than 900 investors in the Association of Southeast Asian Nations recently saw the Philippines emerge as the frontrunner among other key cities in the region.
It further said that the “Philippines was the standout country in terms of the strength of on-the-ground sentiment…as the Philippines is expected to see stronger investment growth this year, sustaining the strong momentum from 2012.”
The survey showed that 74 percent of investor-respondents in Manila expect to see better business prospects in 2013 compared to the year before, dwarfing scores in Jakarta (46%), Bangkok (44%), Singapore (44%) and Kuala Lumpur (41%).
The survey also found that investors in Manila are most worried about the European, American and Chinese markets this year. No one cited the Philippines as a concern. In comparison, 47% of investors in Kuala Lumpur said their own country worried them, followed by 43% in Singapore, 35% in Jakarta and 19% in Bangkok.
The peso is expected to get stronger, with 86% of investors in Manila saying they expect to see their currency appreciating against the dollar in 2013. Only 67% of investors in Bangkok, 52% in Kuala Lumpur, 50% in Singapore and 35% in Jakarta thought the same.
“We are optimistic that the Philippines will outperform the region and enjoy another year of strong growth momentum in 2013,” Standard Chartered Bank said.
With these developments, the Philippines now has the long-awaited chance to achieve “tiger” status during President Benigno S. Aquino III’s term as his administration has been successful in laying down the foundations for inclusive growth.
All these, coupled with the positive shift in the engines of the world economy (the US, Japan, and Europe) will definitely boost the country’s economy to higher levels of growth.