The Philippines can potentially become a $2-trillion (around P112-trillion) economy in the coming decade if it continues policy reforms and boost investments in key sectors, the head of the World Economic Forum (WEF) said.
“We are very bullish on the Philippines, provided that reforms do continue. I think that this can be in the coming decade, a $2-trillion economy if there are better investments in education, infrastructure and also able to draw on the great competence of the people of the Philippines,” WEF President Børge Brende said at a press briefing at the Palace on Tuesday.
Data from the Philippine Statistics Authority showed that the country’s gross domestic product (GDP) was valued at P21.05 trillion (roughly $380 billion) in 2023.
Last year, the economy grew by a weaker-than-expected 5.6%, missing the government’s 6-7% goal.
Economic managers are targeting 6.5-7.5% growth this year, although they have recently signaled a need to temper the outlook amid a weaker-than-expected global economy.
“The economy here has really shown how resilient it is. We are seeing a lot of global business interest in the Philippines. It’s now the fastest-growing economy in the region. It’s not always been like that,” Mr. Brende said.
He noted there has been an increase in foreign investor interest in the Philippines, although the current level of foreign direct investments (FDIs) is “relatively lower” compared with neighboring countries.
In 2023, FDI net inflows dropped by 6.6% year on year to $8.9 billion. The central bank expects FDI net inflows to reach $9 billion this year.
To support economic growth and attract more investments, Mr. Brende said the Philippines needs to address red tape and bureaucratic bottlenecks, upskill and reskill workers, make further investments in infrastructure, and create a conducive environment for entrepreneurs and startups.
“Of course, there are also some geopolitical challenges that the region is faced with, but it’s also an opportunity for the Philippines to get increased investment, especially in the manufacturing area, because there is diversification of the supply chains,” he added.
Mr. Brende also highlighted opportunities in renewable energy (RE).
“There is quite a potential for renewables in this country… Renewables make you more energy independent, because the renewables will be produced in the Philippines so you don’t have to import from other countries. It makes you stronger as a nation,” he added.
The Philippines last year opened the renewable energy sector to full foreign ownership, paving the way for foreign nationals and foreign-owned entities to explore, develop and use RE resources in the country such as solar, wind, biomass, ocean or tidal energy
The government is targeting to increase the share of renewable energy in the country’s power mix to 35% by 2030 and 50% by 2040.
Mr. Brende also highlighted the potential of the Philippines’ young population.
“The youth is critical. There are also opportunities when it comes to the knowledge-based economy, because that’s a big change. Productivity can be increased by 30% in the coming decade,” Mr. Brende said.
“If you want to see continued economic growth, you also have to be part of the intelligence economy.”
Source: Business World