THE PHILIPPINE ECONOMY has the potential to become a “superstar” in Asia amid bright prospects for services exports and investments, HSBC Philippines said.
“According to HSBC Global Research, growth in Philippine GDP is expected to reach 6.7% by 2026, potentially making it one of the region’s top performers in terms of growth,” HSBC Philippines Head of Markets and Securities Services Corrie Purisima said at a briefing in Bonifacio Global City.
“This is further complemented by the fact that service exports continue to rise and even outpace the growth of international remittances, while foreign direct investments maintain a promising outlook with historic levels of foreign investments approved,” she added.
HSBC sees gross domestic product (GDP) growth expanding by 5.8% this year, 6.4% next year and 6.7% in 2026.
The government is targeting 6-7% growth this year.
“Our economic growth has been very encouraging, and we’ve seen all the reforms in the last 20 years. We’ve had two decades of very, very strong reforms that have really prepared the economy to be able to progress to the next level,” Ms. Purisima said.
She noted that growth will be driven by the country’s young workforce, continued efforts in digitalization and resilient service exports.
“We’re optimistic about what we can do to collectively propel the Philippines from ASEAN’s ‘rising star’ to Asia’s ‘superstar,’” HSBC Philippines President and Chief Executive Officer Sandeep Uppal said.
Mr. Uppal said most Association of Southeast Asian Nations (ASEAN) economies’ GDP ranges from 5-7%, including the Philippines. “What would make us a superstar? I think the superstar would be when we can cross the 7% mark,” he added.
“How much closer can we get to that double digit, which is very aspirational, very elusive but that’s what makes us a superstar.”
He also noted the government’s recent efforts to control inflation, which has “allowed the economy to continue to prosper.”
Headline inflation averaged 3.3% in the first 10 months, within the central bank’s 2-4% target.
On the other hand, he noted that there are still gaps to address, particularly in infrastructure, in order to unlock this growth potential.
“The biggest opportunity in the Philippines and the biggest challenge I describe in one word: mobility. How do you move people, goods, electricity, water, data. If we get that right, the sky’s the limit,” Mr. Uppal said.
The government plans to spend 5-6% of GDP on infrastructure.
Mr. Uppal also cited other risks that could dampen growth, such as geopolitical tensions.
“We’ve got a few wars going on globally that can impact energy prices. Now, clearly, that’s a challenge for importing countries like the Philippines.”
“Like some of the Asian markets, we import energy, but we also import food. Anything which disrupts international trade is not good for the Philippines.” — Luisa Maria Jacinta C. Jocson