MANILA, Philippines – Malaysian investors should continue investing in the Philippines even beyond June 30 – with its business process outsourcing (BPO) and remittance sectors bringing $60 billion by 2017, said Finance Secretary Cesar Purisima.
Purisima told the audience of the 2016 TAEL Partners’ Annual Meeting last April 28 in Penang, Malaysia, that the Philippines is seeing the best economic growth in the past 40 years, with its gross domestic product (GDP) growth surpassing most of its neighbors.
“I think the Philippines is attracting attention in the past 6 years. We are seeing the best growth that we’ve had in the past 40 years, averaging at 6%,” Purisima said.
The outgoing finance chief said the Philippine economy is in the right place at the right time, with its favorable demographics and its integration with other Association of Southeast Asian Nations (ASEAN) members.
“You know, I’m bullish about the country because the change that President Aquino brought is coming at the right time – because one, our demography is favourable and, second, because of ASEAN,” Purisima told Malaysia.
As the country goes towards elections, Purisima said the Philippines will continue to be bullish as it belongs to the “most dynamic economic region in the world” – ASEAN.
“I believe that it won’t be a slam dunk – ASEAN integration. There will be challenges; TPP (Trans-Pacific Partnership) is going to be one of them. In fact, for me, that the US is not signing is good news because if TPP comes into force, Philippine garments, Thai garments will be competing at a 20% handicap against Vietnamese and Malaysian garments,” Purisima said.
He added that it will become a hindrance to integration, as the region will start putting up barriers.
“[I]f not, we lose our garment industry. That’s why I’ve been saying that in TPP, they should have invited the whole ASEAN. But we have the ASEAN way; It’s slowly moving in the right direction and I am confident that firms like TAEL [Partners] is going to play a key role, especially in the small and medium enterprises (SMEs),” the Finance chief said.
TAEL Partners is a private equity partner that has 5 regional offices in Singapore, Malaysia, Indonesia, Thailand, and Vietnam.
‘Help us grow local SMEs’
By its nature, Purisima said SMEs do not have the management span to look at opportunities across the boundaries.
“You (Malaysian firms) will be the one to put together a logistics company in Manila, and another logistics company in other area, or hospitals there, hospitals here or diagnostics center here, diagnostics center there, or supplier here, and user there,” he added.
Without the scale to do so, Purisima said local SMEs need the help of foreign firms to expand their operations.
“We cannot see SMEs setting up operations there – they don’t have scale to do so. In fact, in the Philippines, our goal is to use the ‘Big Brother’ concept, where large companies become the bridge of SMEs to the rest of ASEAN,” he added.
Citing as an example is how Nestlé does its coffee business in the Philippines.
“Of course, Vietnam is a very major coffee supplier, but we import about 80% of our coffee requirement. So, if our SMEs are trained to improve their coffee production, then we can create diversity in terms of blending – a Philippine and Vietnamese coffee or Unilever with our coconuts, or Jollibee with our onions and tomatoes,” Purisima said.
With a new Philippine president come June 30, Purisima said he will inherit a robust economy with a large potential for SME growth. (READ: Philippine economy ready for any president)
“[W]ith that, I hope I can see you in the Philippines. The term of President [Benigno] Aquino [III] is only up to June 30 lunch time – because that’s when the new President takes his oath – and so is my term,” Purisima said.
“So, you can see me as Minister of Finance up to lunch time on June 30 but after that I’d be a very interested member of the private sector – trying to create opportunities as well,” he added. – Rappler.com