THE Philippines must work harder to diversify its growth drivers for sustainability so as not to miss the chance to be attractive to foreign investors again, a government official said.
At the sidelines of a recent briefing in Makati City recently, Socioeconomic Planning Secretary Arsenio M. Balisacan said the Philippines—due to its robust performance in the past years—has the change once again of becoming an investment hub in the region.
Balisacan said that decades ago, the Philippines was one of the leading candidates of being a manufacturing investment hub of Japanese investors. However, subsequent political unrest blew that opportunity, he added.
This time, as the country becomes an outlier in terms of growth comparable to its Asian peers, Balisacan said the Philippines must grab this opportunity to finally ramp up its foreign direct investment numbers.
“Performance feeds into further attractiveness of the country. So we have this window…we have good fundamentals, while our neighbors have their own problems. Of course, we like our neighbors to solve their own problems because we have synergies with them but, if we miss it this time, it will all go to waste,” Balisacan said.
As such, the country’s socioeconomic-planning secretary said the country must diversify its growth to ensure its sustainability.
“There is so much scope in domestic growth. But, at the same time, because we want to be more stable, we want to be less vulnerable from shocks from the global economy of anywhere, the sources of growth are quite diverse…we are also pushing trade and investments,” Balisacan said.
He explained that, when one’s nation’s growth depends largely on domestic sources, growth can be limited and paralyzed if a large economic problem hits the country.
There is only so much you can do with domestic sources of growth. The bigger market out there is the global, so, for an economy to continue growing rapidly, you have to connect to the bigger market,” Balisacan said.
In our case, according to Balisacan, the Philippines must be able to diversify especially its manufacturing capacity apart from its main produce of semiconductors and electronics.
In the first half of 2014, the Philippines has grown by 6 percent based on the data from the Philippine Statistics Authority (PSA). This is lower than the government’s target of 6.5-percent to 7.5-percent growth for this year.
This means that the Philippines must have a growth rate of 7 percent in the next two quarters to hit the lower end of the government’s target.
“Even if we only hit the lower end, that is already spectacular comparatively. An above 6-percent growth is remarkable, given global economy and local problems,” Balisacan said.