Economic resilience in the Philippine context: the primer to the 23rd World Economic Forum on East AsiaMarch 17, 2014 / By
Economic shocks have become more complex due to globalisation and the frequency of natural disasters. The gains of development have a tendency to become short-term, as traditional frameworks and policies are constantly being challenged. The Philippine economy, on the other hand, defied the threat of a slowdown in 2013 when it posted a strong 7.3% GDP growth, despite the estimated physical damage of approximately USD 15 billion due to an earthquake and Typhoon Haiyan, which swept through Central Philippines in late 2013.
The strong economic performance was partly due to the expansion in the underlying factors supporting the growth of the local property sector. Aggregate demand from offshoring & outsourcing firms, as well as other growth industries such as manufacturing and financial services, pushed the estimated office space transactions in 2013 above the average transaction levels of the past five years. Overseas Filipino remittances and tourism arrivals also registered impressive growth rates in 2013, further buoying demand for residential and hotel/leisure developments.
The resiliency of the Philippine economy and the local property market is reinforced by the positive investment climate due to the upgrade in the country’s credit and investment ratings last year, as well as planned increased spending on public infrastructure. As a direct result, the level of net FDI inflows grew by as much as 37% from January to November 2013 compared to the same period in 2012. As investor interest continues to strengthen, average capital values for commercial real estate investment are expected to post moderate, positive growth rates.
The economic growth story of the Philippines serves as a fitting backdrop to the 23rd World Economic Forum on East Asia, to be held in Manila in May 2014. The meeting will bring to the fore the key issues on how economic resiliency should be tackled in the context of achieving equitable progress, advancing models for sustainable growth and realising regional connectivity.
The Philippines is in a unique position to host the meeting; as this will put to the test how the key stakeholders will formulate the appropriate framework to ensure equitable and sustainable growth of the various sectors of the economy. The framework should advocate policies that will answer to the demands of the complex economic system (brought about by the impending economic integration of the Philippines with the nine other economies comprising the Association of South East Asian Nations) and be supportive of efforts to minimise the impacts of natural disasters that will inevitably occur in the future.
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