Philippines well-positioned to grow over long term
The Philippines is among the countries well-positioned to grow over the long term, a research study by Oxford Economics showed.
“China leads the way in terms of a positive long-term outlook, followed by the Philippines and the Czech Republic,” the think tank said in a report.
It said this is based on the update of its work first published in February 2020, which looked at the ability of selected emerging market economies to escape the middle-income trap and achieve high-income status.
For the countries’ long-term growth indicator, Oxford Economics analyzed 33 metrics divided into three groups that determine long-term growth such as labor-related, capital-related and technical change-related indicators.
“Each of the top five ranked countries – China, the Philippines, the Czech Republic, Malaysia and Thailand – have a relatively strong score for technical indicators. These include measures of productivity growth, economic structure and governance,” Oxford Economics said.
It said the good long-term indicator score must be viewed as an indication that the country “has a relatively high convergence potential versus other EM (emerging market) economies in our sample.”
Meanwhile, countries with the weakest scores such as Argentina and South Africa had poor showing in terms of economic structure and capital-related indicators, which include indicators of investment, returns on investment, and research and development.
Oxford Economics said the poor long-term indicator scores should not be interpreted as forecasts for low future economic growth.
“These scores mean that they may face higher obstacles to income convergence than other EM economies in our sample,” it said.
The Philippine government has set a six to seven percent economic growth target for this year.
In the January to September period, the economy grew by 5.5 percent.
For 2024 to 2028, the Philippine government is targeting an annual economic growth rate of 6.5 to eight percent.
The Philippines, which is currently a lower-middle income country, is aiming to reach upper middle-income status by 2025.
Based on the updated scores, Oxford Economics also said Asia now has the most favorable long-term growth score among emerging market regions.
When the exercise was last conducted prior to the pandemic, Europe was the leading region.
Latin America, meanwhile, faces relatively weak prospects for long-term growth, with all countries in the region part of the sample in the “potential laggards” camp.