Coming off GDP growth of 6.2% in 2018, the Philippines has impressively maintained positive momentum in the face of a global economic slowdown and geopolitical tensions. The World Bank, Asian Development Bank and IMF have all maintained projections of the Philippines as one of the region’s fastest-growing economies into 2020.
The Department of Finance cites strong macroeconomic fundamentals and judicious fiscal and tax reforms as reasons for the country’s strong performance. Its debt-to-GDP ratio is dropping, gross international reserves are rising and the Philippine peso is among Asia’s best-performing currencies. This prompted financial analytics firms such as S&P Global to upgrade the country’s credit rating to “BBB+” with a stable outlook.
Steady economic confidence is evidenced by foreign direct investments doubling and consumer demand accelerating to 6% in 2019 versus the same period last year. Major infrastructure projects are on track, boosting related industries. Philippine firms such as port-handling titan International Container Terminal Services, Inc (ICTSI) are contributing to the government’s ambitious “Build, Build, Build” program by helping improve trade logistics and investing in human capital. Its Chairman and CEO Enrique Razon Jr. says that, as global manufacturing and production shifts, the country can capitalize on available opportunities.
The Philippine property market is set to reach double-digit growth this year, with real estate values hitting historic highs, according to Leechiu Property Consultants. With the country accounting for 16-18% of the estimated global information technology business process management revenue market, offshoring and outsourcing demonstrate strong, stable demand. Jones Lang LaSalle projects growth of 7-8% in 2019 for the contact center industry alone. Online gaming operators are the most recent and aggressive leaders of this gold rush. Vigorous take-up of office space and the burgeoning worker base have also fed a bullish residential market. Rising condominium prices, previously reliant on the local and overseas Filipino markets, are now increasingly driven by foreign investors and locators. Rental rates in key areas have risen by 80% in the last three years. Thriving online retail and logistics are driving demand in warehousing and industrial properties.
This boom is translating to solid performance by the country’s largest conglomerates, and many have successfully increased their presence abroad. SM Investments Corporation, cited in Forbes’ Global 2000 list of the World’s Best Regarded Companies, saw its income up by more than a quarter this year thanks to its banking and real estate holdings. ICTSI’s earnings, meanwhile, have increased by almost 50% in 2019.
Years of sustained growth coupled with increased investments are uplifting more Filipinos, translating to more jobs and better quality of life. Network marketing companies like FRONTROW are taking advantage of these conditions to achieve rapid success. Developers such as Vista Land, run by the country’s second richest tycoon, Manuel Villar Jr., are keeping pace by expanding with more innovative projects in key locations.
By overcoming and even making the most of regional challenges, the Philippines continues to rise in the ranks as a leading global economy.