How Philippine economy can grow faster
Various TV, radio and other media both local and foreign have recently interviewed me about the economic prospects of the Philippines under the new Duterte presidency, and I have expressed optimism that economic growth shall not only continue, it may even accelerate with the new leader’s action-oriented, anti-crime and decisive governance style.
Why then were Philippine stocks tumbling down just before election day on May 9? I believe it was mainly because of uncertainties due to rumors that the ruling political party will allegedly try to cheat and thus thwart the rise of the popular opposition presidential candidate, I think uncertainty is what spooks investors. After the decisive victory of Mayor Rody Duterte was already unassailable in the speedy election count, confidence bolstered Philippine stocks.
To get a better perspective of how investments in general, the economy and stocks will be under President Duterte, two finance experts and book authors Randell Tiongson and Marvin Germo will be guest speakers at the Pandesal Forum of Kamuning Bakery Cafe in Quezon City on May 17, Tuesday, at 10 a.m. It will not be exclusive only to media guests and intellectuals, because investors, professionals and business people are welcome.
What are the sunrise industries under a Duterte administration?
Duterte joked before that entrepreneurs should open more funeral parlors, because he plans to eliminate many crooks under his administration, even once saying he will exterminate 100,000 criminals. Seriously, I think we should consider more investments in the following industries and areas under his new government, some of which are:
1. Tourism. Better peace and order, and better infrastructure will catapult our Philippine tourism industry to levels at par with those of our Asean neighbors Thailand, Malaysia, Singapore, etc. I’m sure more European, East Asian and even Russian tourists will want to come to our archipelago if we can decisively improve the country’s negative peace and order image overseas, if we can have better and more efficient airports, etc.
If the new government can at least even just normalize Philippine-China ties with pragmatism and high-level diplomacy, we should consider learning from our ASEAN competitors Thailand, Malaysia or Indonesia in easing tourist visa rules for the affluent China tourist market, too.
2. Agriculture. The new government’s priority concern for rural countryside development should open up the country’s numerous arable lands and agriculture sector for more investments. Mindanao, Visayas and huge regions of Luzon have so much untapped agriculture potentials.
3. Consumer industries. If the Duterte government reforms the existing inequitable and onerously high taxation system, boosts the take-home incomes of ordinary people as well as government employees, if he lessens public worries about peace and order, there will be increased consumer spending in malls, restaurants, leisure activities, etc.
4. Health care. Duterte has said many times that he wants to boost spending in medical and other social services, so I foresee a big boom in the medical care industry. Entrepreneurs should invest in better health care facilities in order to support this government thrust. If peace and order improves, I also foresee the medical tourism sector of the Philippines to flourish, from cosmetic beauty industry, the spa industry to even dental tourism.
5. Education. A government that will prioritize education can benefit this sector, so schools, textbooks, educational services will hopefully flourish in the coming six years.
6. Mining. One of the untapped industries of the Philippines in recent years is mining, due to lack of political will, due to bad peace and order situation in the rural areas. I foresee the strong-willed Duterte administration improviong the prospects for this potentially multi-billion dollar export sector to help enrich the whole Philippines, without sacrifising environmenmtal safeguards similar to progressive mining countries like Australia and Canada.
In an interview by eComparemo.com editor-in-chief Alex Paita, I said that I believe a Rodrigo Duterte presidency will boost the Philippine economy due to the following reasons:
First, Duterte is expected to push rural countryside development in different parts of the archipelago and most especially in his long-neglected yet resource-rich Mindanao in southern Philippines.
Second, investors and tourists will come more to the Philippines if he succeeds in his peace and order plans, because local and foreign investors, as well as tourists want personal safety. The past six years have seen international credit ratings of the Philippines improving, but how come we still have one of the lowest foreign direct investment (FDI) levels in ASEAN?
Third, poverty reduction and increasing domestic consumption with more inclusive economic growth with his plans to increase health care and other basic social services, all these reforms can help rectify the imbalance of the past years which witnessed high economic growth which was not inclusive;
Fourth, the Philippines can benefit from hopefully more trade, tourism and investments from world’s No. 2 biggest economy, and hopefully reduce tensions in the Spratleys, because Duterte may also help repair and normalize the ancient friendship ties of the Philippines with our neighbor China without forsaking Philippine sovereignty in the disputed territories. This normalization of ties will help the Philippines compete with our ASEAN and Asian neighbors in riding the China economic wave via the AIIB infrastructure loans, more trade, more tourism, etc. Last year 2015, our neighbor Thailand welcomed eight million affluent Chinese tourists, while we had less than half a million. Even political and ideological foe Taiwan has more tourists from China per year than we do here in the Philippines.
Fifth, urgently needed major infrastructure projects have been quite slow in recent years, like the need to expand or totally build a new international airport for Metro Manila, fast trains, etc. Can the more audacious and decisive Rody Duterte push more and faster implementation of public infrastructure nationwide, thus unlock the vast economic potentials of the Philippines to go beyond six percent annual economic growth and stimulate more businesses? Let us aim for double-digit economic growth and a strong-willed government that will help in redistribution of this growth to the poor, middle-class and SMEs through better infrastructure and more social services.
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