In 2016, the Philippines recorded an impressive economic growth rate of 6.8% and this momentum is expected to continue. By the World Bank’s definition, the Philippines remains a lower middle income country at present, with a considerable income gap between it and richer ASEAN countries such as Thailand and Malaysia. However, if the current level of economic growth can be sustained, the Philippines is on track to become an upper-middle income country by 2022. The chief factors fuelling the country’s current consumption power are foreign receipts from overseas remittance and business processing outsourcing (BPO) services. In 2016, overseas Filipino workers remitted a total of US$27 billion back to the country. The remittance figure is much higher than the record US$7.9 billion in actual foreign direct investment (FDI) recorded by the Central Bank, Bangko Sentral ng Pilipinas (BSP) for the same year. However, the net FDI inflow in 2016 increased by some 40% from 2015 levels, as key reliable economic factors galvanised the country in spite of uncertainties caused by the change of president. The fast-growing BPO sector is another important source of foreign exchange for the Philippines, and has become the country’s largest source of private-sector employment. The industry is driving income growth, as BPO jobs are among the highest-paying jobs at all levels. It is estimated that Philippine BPO receipts amounted to US$25 billion in 2016. Overseas receipts from remittances and BPO have driven local consumption and property investment in the Philippines, generating a sturdy cycle of growth. Final consumption expenditure of the Philippines almost tripled in the decade up to 2015 to a level of around US$247.9 billion, translating into an impressive CAGR of 11%. Anchored by strong economic growth, consumer confidence with the Philippines is now at a 10-year high and it topped world rankings in 2016. The Philippines also boasts a very youthful population with a median age of around 23 years old. This skews even younger than other populous ASEAN counterparts such as Indonesia and Vietnam. Such a demographic signals a strong vibrancy within the labour market which is capable of sustaining economic growth. Also, it fuels consumer spending. Young people usually operate on a low saving ratio and have a higher tendency to buy discretionary items.
Foreign direct investment (FDI) flows into the Philippines in the first quarter of this year rose to 2.2 billion USD, an increase of 43.5 percent from the same period last year. The investments mainly came to the manufacturing, real estate, arts, entertainment and culture, and finance and insurance activities, according to the Philippine central bank, Bangko Sentral ng Pilipinas (BSP). In March 2018 alone, FDI net inflows reached 682 million USD, an increase of 27 percent from 537 million USD recorded in the same period in 2017, said Finance Assistant Secretary Paola Alvarez. FDI inflows reached a record high of 10 billion USD in 2017, up 21.5 percent from the previous year. According to the official, the investments have helped generate jobs and boost growth. Meanwhile, Finance Secretary Carlos Dominguez said that the increasing FDI supports the government’s efforts in shifting the economy from consumption-led to investment-led growth. Besides, the government is revisiting its Foreign Investments Negative List (FINL) to open more areas for joint ventures and direct investments, reviewing its procedures to reduce red tape and shorten approval time for business start-ups, and exploring possibilities for expanded e-governance using digital technologies, Dominguez said.
The Philippines is pushing to establish tuna farms in its Samar provinces -- the first attempt by the country to culture the fish, reports the Philippine News Agency. Bureau of fisheries and aquatic resources (BFAR) regional director, Juan Albaladejo, said the department has been talking with Japanese experts for the proposed yellowfin tuna cages. Fish cages developed in Japan will be turned over to local government units and will be maintained by fisher folks in coastal communities. The project is in partnership with Japan International Cooperation Agency and Feedmix Specialist. “Tuna juveniles will be gathered from spawning grounds in municipal waters for farming. We will provide all necessary assistance to fisher folks, including feeds, to raise the tuna inside cages,” said Albaladejo. The ocean enclosure has a diameter of 50 meters. About 1,000 juvenile fishes will be raised for six months to one year before harvest.
The administrator of a government-controlled economic zone in the Philippines has revealed plans to issue 25 licenses to cryptocurrency exchanges. The Cagayan Economic Zone Authority (CEZA), a government-operated economic zone in the northern tip of the Philippines, will open its doors to as many as 25 cryptocurrency exchange operators in its tax-friendly jurisdiction, an announcement on its website revealed. The move to license effectively legalise crypto exchanges will follow a strict integrity check, coinciding with wider regulations for the cryptocurrency sector. Each cryptocurrency exchange will be required to invest at least $1 million within two years of operations in the zone as well a physical presence via an office in the zone, CEZA chief Raul Lambino added. Despite the limitation on the direct licenses, each cryptocurrency exchange will have 20-30 sub-licenses for trader and brokers, Lambino confirmed.. “We do not want the Philippines to be a haven for scammers even if these scams are happening abroad,” the CEZA chief was quoted as stating by a government-owned newswire. “That’s why through our probity and integrity check we can determine if their transactions are just designed to entice unsuspecting people to invest in Bitcoin or whatever crypto coin that is a fraud.” The authority is also mandating all ICO operators to have their coins to be ‘asset-backed’. As reported previously, the CEZA has already received a number of applications from cryptocurrency firms in the region to operate in the tax-haven zone strategically situated within an hour’s flight from Hong Kong, China and Taiwan. Earlier in April, the CEZA revealed it was in the process of issuing ten licenses to companies looking to operate exchanges, offer initial coin offerings (ICOs) and even mine cryptocurrency within the zone. “They are Japanese, Hong Kong, Malaysians, Koreans…,” Lambino said at the time. “They can go into cryptocurrency mining, initial coin offerings, or they can go into exchange [operations].” Elsewhere in the mainland, the Philippines’ central bank has also been reviewing over a dozen applications from operators looking to establish an exchange in the country. The Philippines is among the earliest countries in the world to publish regulations for cryptocurrency exchanges in February 2017. In a refreshingly candid televised news interview, the deputy director of the Philippines’ central bank lauded the ‘pioneering’ regulation and highlighted the benefit of using bitcoin as a “fast, near real-time and convenient” monetary instrument.
Philippines Ambassador to India Maria Teresita C Daza today said that her country could emerge as the fastest growing economy in Southeast Asia over the next two years. The sectors driving the economic growth in the Philippines are BPO, financial services, trade, construction, private consumption and manufacturing, she said. "Philippines is expected to be the fastest growing economy in Southeast Asia and second fastest in the world over the next two years," the ambassador said at an interactive session at the Merchants Chamber of India here. Referring to India, she said it is one of the fastest growing economies in the world now. Daza said the major factor driving her country's growth is its young and educated workforce which has an average age of around 24 years. The Philippines Foreign Direct Investment inflows had hit an all-time high of USD 10.05 billion in 2017, up by 21.4 per cent compared to 2016 levels, she said. The country's government has embarked on major reform programmes to significantly enhance the ease of doing business, such as TradeNet Platform, an online portal that will have 66 government agencies on board over the next two to three years, Daza added. Several Indian IT companies have set up BPO operations in the Philippines, including Wipro, Tata Consultancy Services, L&T Infotech, Genpact, Infosys, Intelenet, Aegis, HIMT (Hindujas) and Tech Mahindra, the Philippines officials said. The Philippines is beginning to emerge as a destination for many Indian students and there are more than 10,000 Indian students pursuing medical courses in various universities in that country, MCC president Ramesh Agarwal said.