From 'pussycat' to 'tiger' economy
MANILA, Philippines - The Philippine economy is projected to hit $1.2 trillion in 16 years or by 2030, according to a report by IHS.
"The Philippines economy has undergone a remarkable transition from a pussycat into a tiger economy over the last decade," Rajiv Biswas, Asia-Pacific chief economist at IHS, said in a statement.
IHS, a leading provider of global market and economic information, said the Philippine economy has a capacity for long-term economic growth of around 4.5 percent to 5 percent a year between 2016 to 2030. Last year, the Philippine economy grew by 7.2 percent, one of the fastest in the region.
"This (growth) will transform the Philippines economy from its current $280 billion economy to a $680 billion economy by 2024, with a projected GDP of $1.2 trillion by 2030,”
By 2024, IHS projects the total GDP per Filipino will rise to $5,800 (around P254,000) from around $2,800 (around P122,000) this year.
"This has considerable implications for the size of the Philippines consumer economy. These significant increases in per capita GDP will create one of ASEAN’s largest consumer markets of the future, as the middle class rapidly expands over time," Biswas said.
The Philippine economy's growth will be driven by the IT-business process outsourcing (IT-BPO) sector and continued strong flow of remittances from overseas Filipino workers.
The IT-BPO sector's export revenues more than doubled between 2008 and 2013, hitting around $13.3 billion. Remittances from OFWs reached $25 billion in 2013.
"The rapid growth of the IT and BPO industry is also creating positive transmission effects for the rest of the economy, including rapid growth in demand for commercial floor space, underpinning the development of existing and new office parks in urban centers," Biswas said.
However, the long-term outlook for the Philippines' future development will depend on its ability to make the manufacturing sector more competitive and to attract foreign and domestic investments in manufacturing, IHS said.
"This will require considerable improvement of the business climate, with the Philippines still ranked very low globally on the World Bank’s Ease of Doing Business rankings," he said.
The Philippines, Biswas said, also faces challenges such as "very high" poverty and unemployment incidence.
"However, sustained rapid growth will require continued economic reforms to improve the business climate of the Philippines, making it more attractive for foreign direct investment into sectors such as manufacturing and tourism," he said.