'Lack of investments holding back PH'
MANILA, Philippines - The country needs to attract more domestic and foreign investments if it wants to sustain its better-than-expected 6.6% growth last year, economists and analysts said on Tuesday.
"You already have in this country a clear macroeconomic stability so the other components [needed to sustain growth] is building up public and private investments," Anoop Singh, Director of Asia and Pacific Department at the International Monetary Fund, said during the Philippines Investment Forum in Makati City.
"You need to open the economy to the outside world to raise investments," he continued.
These investments, he noted, should go to education and health in order to support the country's labor force.
"That makes the labor force more productive... and makes the economy more inclusive," he stressed.
Matt Hildebrandt, Chief Philippine Economist and Head of Asia Credit Sovereign Strategy at JP Morgan Bank, pointed out that the lack of investments has held back the country from being granted the coveted investment grade rating.
"If we take a look at what had held back the Philippines: per capita to GDP (gross domestic product) is still low, investment to GDP is still low and FDI (foreign direct investments) is still low relative to other countries," Hildebrandt said in the same forum.
In 2012, the Philippines attracted only $2 billion in FDI.
But Lena Teoh, Chief Investment Officer for Asia Pacific at Credit Suisse, said that there should be more venue for the investments and allow more businesses to flourish in the country.
"We want to see more of mid-sized companies coming to the stock market or listing bonds to provide a wider breadth of opportunities," Teoh said in the same forum.
"To make investments really interesting, it's very important to broaden the breadth and the diversity of the consumption pattern and the corporate structure to release and sustain Philippines beyond 2016," she continued.
Manuel V. Pangilinan, Managing Director and Chief Executive Officer at First Pacific, concurred with Teoh, echoing the need for increasing the choices for investors.
"We know the system is very liquid but with the liquidity sloshing around the system, you need to open vents for investments--investments that are more permanent and productive for the economy," Pangilinan said
"The more investment outlets there are, the better," he said.
However, Hildebrandt pointed out that most investors considering the Philippines are wary of what will happen after President Benigno C. Aquino III finishes his term in 2016.
To this, Finance Secretary Cesar V. Purisima said the government is making sure the reforms have been properly put in place so there will be no disruption in the Philippine growth story.
"[We] made sure to embed and institutionalize the reforms," Purisima said.
Moreover, Purisima stressed that the government is doing its best to put funds toward the development of its people and in infrastructure to make sure growth will be sustained even after the 2016 polls.
"We're optimistic in our prospects with the administration focusing on its people and infrastructure. He's (the President) really allocated it with regard to priority: investment in people, investment in infrastructure," he said.