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WATER is
still flooding the basement of a shopping mall in the
Philippines’ central business district after an explosion
in October. At least nine died and more than a dozen
businesses were kicked out from their glass-walled shops
now wrapped with white-painted boards.
Another
blast nearly a month later claimed the life of a lawmaker
and aides inside the tight-security compound of the
Senate.
Several
blasts and explosions have occurred between and after
these two incidents, reflecting the quirky fate of the
Philippine economy. Despite being inundated with money,
especially from overseas Filipino workers, there is still
a lot to be done for an explosion of people’s purchasing
power and allow the growth to significantly impact on the
lives of the poor.
“You’ve
got to be patient,” says Caroline Couronne of the Oxford
Business Group, that would launch a report end-December on
why the country remains an attractive investment site.
The report
is expected to conclude that small and medium businesses
from Europe and North America can ride the Philippines’s
growth wave, estimated by the World Bank to hit 6.7
percent this year and 6.2 percent next year.
Couronne,
Oxford Business Group country director for the
Philippines, acknowledges security as a concern among
these investors.
“But these
are risks the Philippines does not have a monopoly of,”
she tells BusinessMirror, citing terrorist attacks in the
United States as well as other Southeast Asian countries.
“We don’t
care about the hype,” said Couronne, who has stayed in the
country for the past two years. “We have seen the ups and
downs of the Philippines. There’s a sort of stability in
the ‘instability.’ That’s how the market is everywhere.”
World Bank
These are
some of the things that Couronne said most investors don’t
know about the Philippines or other countries that it
reported on from
Algeria
to the Ukraine.
They don’t
rate these countries as a way of comparing strengths, but
Couronne said the Oxford Business Group produces the
200-page report only upon the invitation of governments.
For the
past nine months, the Oxford Business Group has done just
that after having asked to do so by a senior diplomatic
official.
The
report, Couronne admits, doesn’t differ much from what the
World Bank has said in its recent East Asia & Pacific
Update that gave good marks on the country’s performance.
The World Bank, which recently blocked an infrastructure
loan on corruption charges against the Philippine
government, cited that growth for the year could reach or
exceed the upper end of the original target range for this
year.
“Growth
performance and prospects have improved following the
substantial fiscal adjustment, public-debt reduction and
balance of payments surpluses of recent years,” the World
Bank said.
While
factories, fisheries and farms were losing steam, the
World Bank noted that jobs and workers’ contribution to
the growth marched ahead in the first half. The latter
were mostly in the services sector, mining and
construction industries.
“Expansion
in manufacturing slowed to 3.8 percent…[t]he agriculture
and fishery sector also slowed to 3.9 percent,” it said.
Even wage
and salaried workers, according to the World Bank report,
are seeing their pockets bulge a little with their share
in rotating the economic gears, increasing “slightly to 53
percent while the share of unpaid family workers
diminished somewhat.” This suggests “some improvement in
the quality of employment.”
And
despite a shortfall in targeted tax revenue this year, the
country’s war-chest—or gross international reserves—went
up from $23 billion at the end of 2006 to $32.4 billion in
October, “reflecting rising surpluses on both current and
capital accounts.”
OFW money
Despite a
strengthening peso and the ailing Western economies,
there’s money flowing in from overseas, most especially
from Filipino migrant workers.
“Overall,
the figures are good,” Couronne said, adding that based on
their research the middle class “may be increasing.”
“Because
of remittances, a lot of families are buying—apartments,
appliances and major consumer items. The market has shown
its resilience and may be getting immune to the political
noise,” she added.
The World
Bank—which released the report weeks after the interview
with Couronne—agrees: “personal consumption expanded by 6
percent, benefiting from large and growing remittances.”
“In my
stay here, I observed Filipinos like political debates;
they debate on politics incessantly. But those are largely
coffee-shop talks because we’re finding out, and this
would be reflected in our report, that there’s a large
elbow room for economic growth,” Couronne said.
She
pointed out the renewable-energy, medical-tourism and
high-value business-process outsourcing sectors as the
areas that the country could still squeeze revenue from.
Key
concerns, Couronne added, remain in infrastructure,
including power generation and distribution, technology,
and transportation.
“You won’t
go anywhere without foreign investment. We’re here to at
least raise the interest of these investors and saying the
Philippines is worth taking a look,” Couronne added.
Hopefully,
the
Philippines
will have a real blast—of the monetary kind. |
