World Economy

Philippines Fastest Growing SE Asian Economy

Philippines Fastest Growing SE Asian Economy Philippines Fastest Growing SE Asian Economy

The Institute of Chartered Accountants in England and Wales (ICAEW) expects the Philippine economy to be the fastest growing in Southeast Asia next year.

The group said the Philippines will grow over 6.4 percent in 2015, citing the country's low budget deficit and slowing inflation, ABS-CBN News reported Wednesday.

This would mean the Philippines regaining its number one spot in the region.

In the third quarter, the country was just the third fastest growing economy in Southeast Asia, as growth was dragged by weak government spending. The Philippines posted 5.3 percent GDP growth in the third quarter, behind Malaysia's 5.6 percent and Vietnam's 6.2 percent.

However, ICAEW says the Philippines needs to build more infrastructure to support the country's accelerating growth.

The government has said it wants to fast track building and awarding much-needed infrastructure projects, but most of them are usually caught in delays.

More Investments

The Philippines aims to attract more foreign investments as well as promote the integration of small and medium enterprises (SMEs) in global value chains through its hosting of the Asia Pacific Economic Cooperation (APEC) meetings next year.

Speaking at the APEC Philippines 2015 National Launch held late Monday, Trade Secretary Gregory Domingo said the Philippines’ hosting of the APEC next year is an extraordinary opportunity to showcase to the world what the country has to offer.

As such, Domingo encouraged local businesses to invite their partners and other foreign companies to come to the country and check out opportunities here.

“From our experience, the most powerful promotion tool for foreign investments is to bring those companies here to see for themselves what we have to offer. In 2015, we invite you our partners to leverage on our hosting of APEC to bring your foreign counterparts here to see with their own eyes that now is the best time to invest in the Philippines,” he said.

Trade Undersecretary Ponciano Manalo Jr. added, the Philippines not only has an improving business climate, but also a big market and a young skilled workforce.

Business Destination

“With 100 million strong and young individuals with a very modern outlook, we are a business destination offering vast potential which simply cannot be ignored. As we reach the demographic sweet spot, investors looking to tap the skills, talent, and the creativity of Filipinos will see that we have the numbers to support and sustain business expansion for decades to come,” he said.

Apart from attracting more foreign investments to achieve inclusive economic growth, the APEC hosting next year is also seen to provide a venue to promote the competitiveness of SMEs.

“As the country prepares for its chairmanship of APEC 2015, we have identified several issues on trade and investment liberalization and facilitation vital to improve the businesses and to encourage inclusive growth,” Domingo said.

In the Philippines, the micro, SME sector is considered a key contributor to economic growth as it accounts for 99 percent of total businesses and 65 percent of jobs generated by all types of establishments.

Meanwhile, the United Nations Conference on Trade and Development estimates that 80 percent of gross global exports are tied to global value chains.

“To achieve inclusive growth, it is imperative that our SMEs must be competitive and be able to participate in global value chains,” Domingo said.