Ma. Famela Jane B.

Deloria

BSAccy-II

PHL COULD GROW 8% TO 2015 AND BEYOND GIVEN THE 'RIGHT PLANS'

PHL COULD GROW 8% TO 2015 AND BEYOND GIVEN THE

'RIGHT PLANS'
 
MANILA, AUGUST 4, 2013 (PHILSTAR) By Prinz Magtulis - The Philippines could begin
growing by more than 8 percent in 2015 and sustain that even onto the next administration
given the correct policies and strong fundamentals driving investor confidence now, an
investment bank said.

“There is no reason why the Philippines could not start growing faster than China,” Marios
Maratheftis, global head of macro research at Standard Chartered Bank said in a briefing on
Thursday.

“The country is moving into the right direction. There is no reason why the Philippines will
not grow by 8 percent plus by 2015,” he added.

The statement compares with Standard Chartered’s official forecast of 7 percent growth by
2015. For this year and the next, the economy is expected to expand by 6.9 percent and
6.3 percent, respectively.

The Aquino administration has set the following medium-term growth targets: 6-7 percent
this year, 6.5-percent to 7.5-percent next year, 7-8 percent by 2015 and 7.5-8.5 percent by
2016.

Maratheftis said the “positive story” of the Philippines has reverberated across the world
given that “right plans,” especially on infrastructure, are in place. The bank also credited the
public-private partnership (PPP) initiative.

In a report dated July 1 but released on Thursday, Standard Chartered said low interest
rates and a flush of liquidity will help finance PPP projects, of which only three have been
successfully awarded since its launch in November 2010.

The awarding of investment grade status could also boost foreign direct investments (FDI)
— tagged as the missing link to the country’s success story. Maratheftis noted that “strong
confidence” in the Philippines from corporations globally.

“FDI will eventually catch up. There is a lot of room for Philippines to catch up,” Maratheftis
said.
“If you have the three drivers of growth: correct policies, strong fundamentals and
confidence, it will be difficult to isolate one over the other,” he pointed out.

A recovery in the United States would also work on the country’s favor, the official said,
noting that the Philippines is “most sensitive” to developments in the world’s largest
economy. Among others, trade and FDI gains are expected once the US fully recovers.

Steve Brice, the bank’s chief investment strategist, said it would be important for the
government “not to become complacent” despite all its laurels.

Growth, he said, will need to be sustained by ensuring public projects are bid out
accordingly and in time.

Brice also said there is a need to create more channels for investments to keep the
Philippines on the radar screen. On the local bourse for instance, he said “a lot of money
chasing limited assets” have caused valuations to ratchet up relative to our neighbors.

“Valuations are really high. It’s a challenge for the market. But we always believe on the
structural re-rating story,” Brice told reporters.

“You would expect earnings to grow up faster here than in the US against this backdrop (of
strong growth),” he added.

On the property market, Brice said the market is seen to remain “relatively buoyant,” with
slight correction on prices in the future owing to huge supply coming in. “But we don’t
expect it to slump back dramatically.”

Comment:

It is good to here that Philippines have the chance to grow by 8%. This would mean that
we will have a stronger economy. It would also mean that our unemployment rate will be lesser
and the needs of our fellow countrymen will be provided. If the “right plans” would lead us to a
better country, why not make and follow the “right plans?” If we want our economy to grow,
then we should do these plans and become a developed country, not just a developing country.
This will also mean that it will lessen poverty in the Philippines. Through this also, we can settle
our obligations and debts. It would benefit us, so we should execute this plan in order to have
better lives.   