Top economic and infrastructure managers under the administration of Philippine President Rodrigo Roa Duterte on Tuesday showcased the Philippines’ stable and robust growth prospects, along with infrastructure projects and big-ticket investment opportunities under the government’s massive “Build, Build, Build” programme, before investors and other foreign stakeholders during a Philippine Economic Briefing (PEB) held at the Four Seasons Hotel in Park Lane, London.
Attended by around 250 participants, the PEB carried the theme “Strengthening Economic Resilience and Spurring Infrastructure Development for Inclusive Growth.” The first roadshow in London under the administration of President Duterte, this leg of the PEB highlighted the Philippines as one of the fastest growing economies in Asia and as an attractive investment destination under a reform-minded leadership focused on delivering results.
The PEB was led by Finance Secretary Carlos G. Dominguez, along with Budget Secretary Benjamin E. Diokno, Socioeconomic Planning Secretary Ernesto M. Pernia, Bangko Sentral ng Pilipinas (central bank of the Philippines) Deputy Governor Diwa C. Guinigundo, Transportation Secretary Arthur P. Tugade, Public Works and Highways Secretary Mark A. Villar, and Bases Conversion and Development Authority President and CEO Vivencio B. Dizon. Trade and Industry Secretary Ramon M. Lopez and Tourism Secretary Bernadette Romulo-Puyat joined the team in a series of meetings and roundtable discussions with British firms and companies.
Private sector panel was composed of Tony Stringer, Managing Director of Fitch Ratings; and Kevin Tan, CEO of Alliance Global, one of the largest conglomerates in the Philippines.
“Like the rest of the economies in the world, the Philippines is not exempt from challenges. But what differentiates our economy from many is the decisiveness, extent, and the pace by which we are implementing policy and infrastructure reforms,” said Finance Secretary Dominguez. He said that these reforms have resulted in immediate revenue increases, helping the government to implement necessary investments that will benefit the country long into the future.
The Philippines is enjoying rising investor interest. According to the BSP, net inflows of foreign direct investments surged by 42.4 percent year on year to $5.8 billion in the first semester, with equity capital infusions mostly coming from Singapore, Hong Kong, Japan, China, and the United States.
“The Philippine banking system is on a sound footing, and it has been sustained and continues to be a stable comfort for the economy,” said Deputy Governor Guinigundo. “We have been building relationships with other countries to diversify markets for our exports and to find other sources for our foreign direct investments,” he added.
The Philippines is one of the most resilient economies in the world, consistently posting strong gross domestic product (GDP) growth despite external headwinds. As of the second quarter of this year, the economy posted its 78 consecutive quarters of positive growth. GDP growth was solid at 6.7% in 2017 and 6.3% in the first semester of 2018, with investments as a leading growth driver.
“The rule of thumb, as you know, is that a country with a debt-to-GDP ratio below 60% is fiscally sound. The Philippines is comfortably below that,” said Budget Secretary Diokno. As of end-2017, general government debt was at 36.6 percent of GDP. Fiscal space allows the government to spend more on vital infrastructure. The Philippines will increase its infrastructure spending from 4.7 percent of GDP in 2019 to as high as 7% by 2022 – an unprecedented infrastructure investment in Philippine history.
Credit rating firms recognize sustainability of the Philippines’ favorable economic performance. In December 2017, Fitch Ratings upgraded the country’s sovereign credit rating from “BBB-” to “BBB” and assigned a “stable” outlook on the new rating. Fitch retained the said rating and outlook for the Philippines in July 2018. Meanwhile, S&P raised its “BBB” rating outlook from “stable” to “positive” in April 2018, while Moody’s affirmed the Philippines credit grade of “Baa2,” maintaining a stable outlook for the country’s economy, in July 2018.
On the non-economic side of development in the Philippines, Tourism Secretary Romulo-Puyat shared an update on Boracay, saying that it will have soft opening on October 26. She said that President Duterte gave clear instructions not to open establishments that are not 100 percent compliant with environmental laws, citing the importance of the health of tourists and the integrity of the environment as the top priority.
“The role played here by decisive leadership cannot be understated. The road towards inclusive and sustainable growth is now open,” Dominguez reiterated.