The Philippines, once dubbed the laggard of Asia, is now a frontrunner in economic growth. In four years, it has quadrupled the amount of foreign direct investments in its shores, seen a 9.9 percent growth in the manufacturing sector and an eight percent growth in the services sector. As a result of this growth, car sales have increased by 40 percent, and property sales have also grown significantly.
“Success begets success,” a smiling Trade and Industry Secretary Gregory L. Domingo said at last Tuesday’s Bulong Pulungan at the Sofitel Philippine Plaza. “The Philippines is breaking all its records.”
“The Philippines is in a sweet spot, and it’s going to be in this spot for several decades to come. Our future looks very bright indeed,” he said, adding, “huwag lang nating barilin ang ating sarili sa paa (Let’s just not shoot ourselves on the foot).”
Domingo, a Wharton-educated technocrat who used to work with Mellon Bank, First Boston and Chemical Bank (New York), attributes the Philippine success story to four things: 1. Good governance 2. A promising and young workforce 3. A reasonable wage cost for its labor force and 4. Value for money for every dollar invested here.
“In 2010, the foreign Direct Investment (FDI) in the Philippines totaled $1 billion. In 2011, it was $2 billion. In 2012, $3.2 billion, 2013, $3.8 billion. And as of August this year, it already hit $4.008 billion,” he announces proudly. “And next year will even be better.”
Interest in Philippine trade roadshows abroad conducted by the DTI by a team headed by Undersecretary Chito Manalo has also spiked, with attendance increasing tenfold, according to Domingo.
“I have never seen anything like it,” he reveals.
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President Aquino’s adherence to good governance and his determination to push economic reforms despite strong opposition to some of them is reaping a windfall of confidence in the Philippines. And this confidence is expressed in investments.
“Investors now know they’re going to get a fair shake when doing business in the Philippines,” Domingo points out. This, he stresses, has reduced the risk perception that every businessman factors into his investment.
The Philippine population’s average age is 23, and this young workforce promises to be a dynamo if educated and trained properly. Investors are heartened by the fact that the Aquino government has increased by 70 percent its budget for primary and secondary education.
The wage costs have not increased as steeply as China’s (in 2010, China’s labor cost was lower), even as Filipinos are a hardworking, English-speaking force who are willing to go beyond the call of duty, “especially when treated well,” says Domingo.
The IT/BPO sector has spawned one million direct jobs in the Philippines, which brings in P18 billion in revenue. A heartening figure, because it is only P5 billion shy of the P23 billion the OFWs remit to the Philippines, and soon BPO workers may be remitting more revenue than OFWs. And this would mean more people staying home, avoiding the social costs of the diaspora.
And investors really see value for money for every dollar infused in a Philippine venture. Domingo, who headed the Board of Investments from 2001 to 2004, says that 10 years ago, investors were only interested in leasing half a hectare of property for their manufacturing business. Today, their requirements range from five to 30 hectares for mega factories. These factories churn out electronics, pre-fab houses and garments.
Eighty percent of the country’s exports come from special economic zones, which boast of a world-class administration under PEZA Director General Lilia de Lima.
“We now have 314 special economic zones, which are increasing even as we speak,” De Lima, who was present at the forum, reveals.
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Domingo was asked why the effects of the Philippine boom have not been felt by many.
“But the number of the poor and unemployed has decreased,” he says.
You have to admire Domingo for his candor — he says it is inevitable that the first to feel the fruits of the boom are those who risked their money to ignite it.
“We cannot avoid this, because you must remember that for every successful investor are several who have lost the shirts off their backs. So naturally, those who put their money in feel the returns first. The multiplier effect is not immediate,” he says.
But it will come, sooner than later. Definitely it will be felt before President Aquino’s term is over, Domingo foresees. Investors give jobs, and those with jobs buy cars and homes, go out to eat more, and employ others themselves.
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So what exactly did this Ateneo alumnus mean when he said, “huwag lang nating barilin ang ating sarili sa paa?”
The forum’s moderator Deedee Siytango asked if he was worried about the continuity of the gains of the Aquino administration after 2016?
Domingo says he was not worried about that at all because of his faith in the discernment of the new breed of Filipinos.
First of all, there is social media, where the people immediately give feedback on issues that are being closely monitored by those wanting to seek office, he says. Second, Filipinos today are wiser and more educated.
Thirdly, he believes there will be a “fiscalizer” come 2016 and beyond who the next administration cannot ignore and who will still be a force to reckon with: Noynoy Aquino.
Domingo believes Aquino the President will go down in history for his administration’s economic gains, and Aquino the Private Citizen will be a thorn in the side of those who would waste those gains.
“The future looks very bright indeed,” Domingo smiles.
(You may e-mail me at joanneraeramirez@yahoo.com.)