MANILA, Philippines - The Philippines is projected to grow faster than the entire Southeast Asian region over the next two decades, to be supported by manufacturing, business process outsourcing, construction, transportation and logistics, and information and communications, according to financial advisory services firm Deloitte Touche Tohmatsu Ltd. (Deloitte Global).
“Over the next two decades, we expect the Philippines will grow somewhat faster than the rest of Southeast Asia, with overall GDP (gross domestic product) expanding by 4.8 percent per year in the 2014-33 period,†Deloitte Global said in its report, Competitiveness: Catching the next wave: The Philippines, which was released yesterday.
The firm forecasts Southeast Asia to grow by about four percent over the same period.
Among the key drivers seen to support the country’s long-term growth is the manufacturing sector.
The firm noted that the growth outlook for the Philippines will happen if the government continues on its path of reforms to improve confidence in the business sector, regulations regarding foreign ownership are relaxed, transparency improves and infrastructure spending increases.
“The strong growth in global manufacturing to 2033 will drive world growth, and this presents the Philippines with great potential to integrate into the global supply chain of high-value manufacturing,†Deloitte Global managing director for global clients and industries Gary Coleman said.
As the manufacturing sector remains a relatively small part of the economy at 22 percent, expanding production will be crucial to provide opportunities for high-skilled, semi-skilled and low-skilled workers.
Aside from manufacturing, also seen as a driver of the country’s long-term growth is the business process outsourcing (BPO) sector.
Deloitte Global noted that the Philippines offers a number of advantages in the BPO market given the quality of Filipinos’ accents, large pool of qualified workers, and lower labor costs relative to other countries.
Construction, which offers opportunities for roads, harbors and other public infrastructure, is also seen to boost employment, productivity and economic growth.
While the country’s public investment in infrastructure at 2.7 percent of GDP from 2002 to 2008 has been considered low compared to its Southeast Asian peers, which have an average of 6.6 percent, the government has started to address some of the gaps by raising the budget to upgrade infrastructure.