Lucky 7: The sunrise sectors of 2013, 2014

The 7 sunrise sectors in the next two years include BPO, construction and real estate

MANILA, Philippines – Seven is considered a lucky number and for the next two years, there are 7 sectors that are bound to experience strong growth.

At the briefing of local think tank Institute for Development and Econometric Analysis Inc. on Friday, November 23, former Finance Undersecretary Romeo Bernardo and Management Association of the Philippines President Eduardo Francisco talked about the sectors to watch out for in the next two years.

  1. Business Process Outsourcing (BPO)

    Bernardo said BPOs will continue to experience strong growth in the near-term even with US President Barack Obama’s promise to bring home these jobs. Bernardo said outsourcing allows companies abroad to lower costs so turning to the outsourcing industry is practical for firms. However, Bernardo said this industry may experience a few bumps along the way because of the appreciation of the peso. The higher value of the peso makes Philippine BPOs uncompetitive.

  2. Equity and bond markets

    Franciso, who is also the President of BDO Capital & Investment Corp., expect the capital markets to do well, especially next year. He said with low interest rates, many would be encouraged to invest in the equities market. Francisco added that if ASEAN neighbors will be allowed to buy Philippine stocks, that will also drive up interest in the sector. He said banks will also have to raise capital to comply with Basel 3, which imposes stricter bank capital requirements and introduces new regulatory requirements on bank liquidity and leverage The Bangko Sentral ng Pilipinas said the Philippines will begin Basel 3 reforms in 2014.

  3. Construction 

    The rollout of Public Private Partnership (PPP) projects and BPO growth are some of the factors that will help boost costruction in the next two years. Bernardo said while it was true that only a handful of PPPs have been bid out, things are bound to speed up. Meanwhile, the strong growth in the BPO sector will also increase the demand for office spaces, a good news to the construction sector.

  4. Consumer-based manufacturing

    Bernardo said that not all manufacturing firms will be on an upswing in the near term since global demand remained weak. Only those that are involved in manufacturing consumer goods such as food, beverage, and personal care items will continue to experience strong growth due to high domestic consumption. This, he said, is now a trend in China where more and more manufacturing firms are directing their products to the local market.

  5. Banking sector

    The steady flow of Overseas Filipino Worker (OFW) remittances will give the financial sector a boost. IDEA estimated OFW remittances to post a steady growth of 5% 2013 and 2014. Bernardo and Francisco’s estimates of increased banking transactions due to lower interest rates and capital raising activities will also enable the sector to grow.

  6. Real estate

    The growth of the real estate industry is largely accounted for by BPOs and OFWs, according to Bernardo. He said as long as these two sectors continue to grow, so will the real estate sector. However, Bernardo said the risk now is oversupply, particularly in the low-end verticals market. But one clear opportunity here, he said, is the housing backlog which will continue to fuel demand for affordable housing. 

  7. Retail 

    The strength of the Philippine economy is domestic consumption. It already accounts for 70% of the economy. With more and more Filipinos employed in BPOs and as OFWs, their disposable incomes continue to increase. This will allow them to spend more in malls, restaurants, and other establishments in the country. Also, with the 2013 elections coming up, the retail sector is expected to get a lot of windfall from election spending.

“highway road going up as an arrow” image via Shutterstock


Add a comment

Sort by

There are no comments yet. Add your comment to start the conversation.