PH is Asia’s ‘rising star’

MANILA, Philippines – The accolades on the Philippine economy continues.

Moody’s Analytics called the Philippines “Asia’s rising star” for bucking the global economic slowdown by potentially posting “one of the world’s fastest-growing economies.”

In an outlook report released Wednesday, April 24, Moody’s Analytics, a sister company of credit rating firm Moody’s Investor Service, noted that story of the Philippines has swung from being a “perennial underachiever” in Asia to one that could grow between 6.5% and 7% this 2013 and 2014.

It’s a rosy and noteworthy outlook given the anemic performance of the United States, a crisis in the eurozone and a slowdown in China, and is even more robust than other growing emerging markets, noted senior economist Glenn Levine who authored the report.

Levine added that if the Philippines could continue its strong performance, the local economy could grow close to 8% by 2016.

Sustainable growth

Citing the Philippines’ “impressive” 6.6% growth in 2012, Levine said this uptrend “looks sustainable, as risks are low and most sectors of the economy are growing solidly.”

Robust domestic demand is one of the advantages of most economies in sustaining this trend, Levine stressed. This is the case in the Philippines, as well as in China, Indonesia, Malaysia, Thailand and Vietnam.

This has cushioned these domestic economies from the impact of the external threats on exports to overall growth.

For the Philippines in particular, Levine highlighted strong household consumption, increasing private investments and higher government spending.

These are supported by the anti-corruption agenda of the Aquino administration that in turn improved business sentiment in the Philippines, Levine added.

Stumbling blocks

Moody’s Analytics, however, noted several challenges that need to be addressed to create more jobs.

“Still, the biggest risk for Philippine investment is operational,” the report said, highlighting the “complicated and changeable” regulations and taxes.

It noted the Philippines ranked 138th in the World Bank’s Ease of Doing Business Index, shared alongside Sierra Leone but below India.

“If the government wants to attract more foreign investment, it must ease its restrictions on foreign ownership and streamline the rules for starting businesses, paying taxes, and dealing with workers,” Moody’s Analytics noted. – Rappler.com

Manila Bay skyline image from Shutterstock