Better infra to catapult Philippines into top economies by 2033 — report
MANILA, Philippines — Overhauling the Philippines’ outdated infrastructure could catapult the nation into the league of the world’s largest economies in the next 15 years, a London-based consultancy said.
The Philippine economy is predicted to rank 22nd by 2033 in terms of gross domestic product, according to the latest 193-nation World Economic League Table published by the Centre for Economics and Business Research (CEBR) on Wednesday.
Before securing the 22nd spot in 2033, CEBR forecasts the Philippines to rank 40th this year, 39th in 2019, 28th in 2023 and 25th in 2028.
Compared to its peers in Southeast Asia, the Philippines is projected to outgrow Malaysia (25th), Vietnam (30th), Singapore (40th), Myanmar (61st), Cambodia (99th), Lao PDR (105th) and Brunei (133rd) in 2033.
The Philippines, meanwhile, would be behind Indonesia (12th) and Thailand (21st) a decade and a half from now.
“High levels of infrastructure spending together with strong levels of domestic demand from the Philippines' large and fast-growing population are set to sustain annual growth of around 6.6 percent per year over the next two years,” CEBR said in its report.
“In the longer term, improvements to infrastructure have the potential to unlock major productivity gains, fuelling annual growth of close to 7 percent,” it added.
Widely known as the “Build, Build, Build” program, the Duterte administration plans to supercharge economic growth by upgrading the country’s dilapidated infrastructure, which policymakers qualified as one of the reasons why the Philippines had lagged behind its Southeast Asian peers for so long.
CEBR expects the Philippines to register a GDP growth of 6.5 percent in 2018. If realized, this would be slower than the 6.7 percent clip recorded in 2017, but will settle within the government’s downwardly revised 6.5-6.9 percent target for this year.
‘Risks to growth’
In the same report, CEBR cited inflation as a “risk to growth in the coming years,” but acknowledged the government and the central bank’s efforts to bring down prices.
READ: Inflation cools down for the first time in 2018 in November | Bangko Sentral keeps rates on hold as inflation drops
CEBR also flagged rising global interest rates, as the government taps foreign creditors to partly fund the nation’s ambitious infrastructure plan.
READ: US Federal Reserve raises lending rate, signals slower pace ahead
Nonetheless, the Philippines “is better placed than most to manage this risk, with high levels of foreign exchange reserves and only a small current account deficit, which is contained by the regular flows of remittances from overseas Filipino workers,” CEBR stressed.
“It is less reliant on exports than many other countries at a similar level of development,” the consultancy said of the Philippines.
“This, together with consistently strong levels of domestic demand, has enabled it to sustain positive growth in every year since the turn of the millennium, despite many external shocks such as the 2008 global financial crisis,” it added.
By 2033, CEBR expects China to overtake the United States as the world’s biggest economy. Completing the top 10 economies in the next 15 years are India, Japan, Germany, the United Kingdom, France, Brazil, Canada and Korea, in descending order. — Ian Nicolas Cigaral
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