Philippines no longer the sick man of Asia?

Editorial

Economy on the right track

NO longer the “sick man of Asia,” that’s for sure, but is the Philippines about to become a growling tiger?

Maybe not yet, but it’s definitely alive and kicking.

The National Statistical Coordination Board reported on Thursday that the Philippines’s gross domestic product (GDP) grew by 6.4 percent in the first quarter of this year, from the revised 4.9-percent expansion in the same period last year.

According to Socioeconomic Planning Secretary Arsenio Balisacan, the first-quarter growth is well above the market’s consensus forecast of 4.8 percent, and the fastest in Asia, except China, which expanded by 8.1 percent.

The above-target growth benefited from benign inflation and drew from the revitalized services sector, particularly trade and other services. Services expanded by 8.5 percent in the first quarter from 3.6 percent in the same period last year, while the industry sector rose 4.9 percent and agriculture 1 percent.

“Given the preliminary first-quarter 2012 estimate, we expect that the full-year 2012 real GDP growth-rate projection of 5 percent to 6 percent is well within reach, or may even exceed it,” Balisacan said.

The growth, he pointed out, generated 1.101 million jobs.

And the good news doesn’t end there. There is actually more room for government spending to increase with the potential contribution of public-private partnership projects.

The government’s rosy outlook is validated by Barclays Research, which said that given the strong first-quarter GDP performance and taking into account increased risks to global growth, it is raising its 2012 GDP growth forecast to 5.5 percent from 4.2 percent.

There’s one other factor that could make this year’s GDP surpass expectations.

That’s the conclusion of the Corona impeachment trial that businessmen say is a big step toward political maturity and a milestone in fighting corruption—seen as a major obstacle to attracting investments.

The Makati Business Club believes the proceedings of the Impeachment Court were “transparent, fair and impartial,” and that the outcome was a “triumph of our democracy’s system of checks and balances…and “a revalidation of the fundamental principle that public office is a public trust and that all public officials are, therefore, accountable to the people.”

Even the foreign business community has supported the outcome of the trial. For EU Ambassador Guy Ledoux, the verdict against Corona sent a good signal to the international community,” and expressed the hope that President Aquino would “continue with his initiatives against corruption.”

The businessmen are on the right track in calling on the Aquino administration to uphold its commitment to build a culture of integrity not only in the judiciary, but in the two other branches of government, as well.

A level playing field where businessmen do not have to resort to bribing government bureaucrats so they can start, expand or retain their businesses is exactly what’s needed for the economy to prosper.

A growing economy and an honest-to-goodness campaign against corruption do not cancel each other out; they reinforce each other for as long as the government is focused on building a culture of integrity at all levels.

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Tough call for Phl

ECONOMIC managers have a tough job ahead: improving the country’s competitiveness. The Philippines was down two notches in the 2012 ranking of Switzerland-based global business school IMD in its annual World Competitiveness Yearbook released this week. The country fell to 43rd this year from 41st last year and, thus, needs to attract more investments and develop its exports industry if it wants to improve its ranking, according to IMD.

The IMD ranking measures how well countries manage their economic and human resources to increase prosperity. The Philippines must improve its current business environment, mitigate disaster risks, strengthen public-private partnerships, and fast-track the development of physical, institutional and social infrastructure, the report noted. Among members of the Association of Southeast Asian Nations, the Philippines lags behind Singapore, Malaysia, Thailand and Indonesia, the report showed.

Singapore was ranked 4th from 3rd in the same comparable period; Malaysia was 14th from 16th; Thailand was 30th from 27th; and Indonesia was 42nd from 37th. Hong Kong, the US and Switzerland were the most competitive of 59 economies ranked this year, according to the report.