PH economy seen growing 7-10% in next 10 years: Villegas
MANILA- The Philippine economy could grow by seven to 10 percent in the next 10 years amid improving governance and business climate, one of the country’s leading economists said.
“Growth rates of seven to 10 percent is possible in the next 10 years,” University of Asia and the Pacific economist Bernardo Villegas said during the general membership meeting of the American Chamber of Commerce of the Philippines yesterday.
He noted though that what is more possible for the country to attain is the seven- to eight-percent growth as the country still lacks the necessary infrastructure to support faster expansion of the economy.
Among the factors seen to help the country sustain its positive economic performance are stable democracy; improving governance; labor peace; availability of young, educated, English-speaking workforce, strategic geographic location in Southeast Asia; renaissance of manufacturing; high rate of savings due to overseas Filipino workers’ remittances; and low rate of dependence on petroleum.
The economy grew 7.5 percent in the second quarter, bringing first semester growth at 7.6 percent.
“The bad news is the 10-percent growth is at the moment far-fetched.
We can grow by 10 percent but unfortunately, we have very weak link to transport system,” Villegas said.
He added that reaching the high-end of the range is also difficult as the rollout of Public-Private Partnership (PPP) projects has been slow.
For the economy to grow at 10 percent, he said the government needs to spend more on infrastructure. Inefficient infrastructure is among the weaknesses faced by the country in achieving faster economic growth.
Villegas said the restrictive economic restrictions of the Constitution also prevent foreign firms from investing in certain activities here.
The Constitution sets a 40-percent limit on foreign ownership in the following activities: development of natural resources, investment in areas recommended by the national and planning agency to be of national interest, operation of public utility franchises, and educational institutions, except those established by religious or mission groups.
Engagement in the advertising industry meanwhile, is limited to firms that are at least 70 percent Filipino owned.
Those which are only open to Filipino citizens are agricultural lands of public domain, ownership and management of mass media, as well as holding of executive and managing positions in the advertising industry.
Villegas said amending the restrictive economic restrictions will allow the country to attract more foreign investments and to participate in the Trans Pacific Partnership which seeks to liberalize 12 economies in the Asia-Pacific region and offers huge economic opportunities.
“Why do we need FDIs (foreign direct investments)? It is not because we lack money. We lack long term money to be tied down to projects.
Even more, we need access to technology,” he added.