Foreign businessmen remain upbeat on RP

Foreign businessmen remain upbeat about the country’s economic situation saying that the Philippines will not enter into a recession next year and will even grow by three to five percent.

“The agriculture sector will be one of the pillars of the local economy next year together with the remittances from overseas Filipino workers (OFWs), business process outsourcing (BPO) and mining,” Robert Sears, American Chamber of Commerce of the Philippines Inc. (AmCham) executive director told The Star in an interview.

According to Sears, there will be a slowdown in the economy as a result of the worldwide economic crunch but said the Philippines is somewhat protected.

 “The country is a bit insulated. Some sectors will be more affected like exports,” Sears said.

 ”There will be a slowdown but definitely not a recession,” he stressed.

 Sears said the Philippines has a number of growth areas that can be developed. “Mining is a bit sluggish now. The government should take a good look at this particular sector,” Sears said.

 Likewise, he said infrastructure spending can spur the economy and probably make up for the expected slowdown in foreign direct investments.

“Naturally, foreign investments will go down given the economic situation. There will be a constriction of capital because there will be less money from overseas,” Sears said.

 Aside from the slowdown in foreign investments, Sears said remittances from OFWs may also decline as some overseas workers would lose their jobs and return to the country.

However, he said contrary to what is being said by some economists, the BPO sector will continue to boom.

 “The BPO sector will grow because there is more pressure for firms in Europe and the United States to look for ways to cut down costs,” Sears said.

Earlier, the Makati Business Club (MBC) said that majority of local businessmen expect a recession in 2009, a more difficult credit environment, and a reduction in jobs.

In a survey conducted among MBC members from Oct. 24 to Nov. 7, 87 percent of respondents agreed that the domestic economy will likely go into a recession next year. MBC executive director Alberto Lim said GDP growth will post a “mild downturn” towards the first quarter of 2009.