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Thursday, February 14, 2013

Economy : Philippines - Asia's Laggard No More!

Many Filipinos almost gave up on the Philippines. A few actually did and migrated to other countries. Many were forced to work abroad, and by doing so, helped the country withstood the economic crises through their dollar remittances. The Filipino "diaspora" is still ongoing. Almost 10% of the total population of the country live or work abroad. The irony is that while many developing countries are hiring Filipino technocrats and labors to maintain their economic developments, the Philippines continues its brain drain. (Though there seems to be a reverse brain drain nowadays with other nationalities immigrating to the Philippines). For many years, the Philippines was the "Laggard of Asia". But Filipinos remained patient, patriotic and resilient despite all the odds.

Recently, Time magazine featured a special report on the Philippines referring to it as a new Asian Tiger. And other sources' statistics point to an improving economy of the country. Of course, Filipinos were ecstatic about the news. But everyone seems to ask : Is this for real?

Philippines : Asia's New Tiger
The country's economic growth as statistics show is on the bright side in the next few years. Some ASEAN neighbors are in economic lull right now after experiencing phenomenal economic booms in the previous years. Indonesia and the Philippines' economies seem to be the ones in active mode right now. 

If it's any indication of the good things to come, according to real estate pundits, the real estate boom in the country will continue for the next three years. I guess then that for the next three years our economy would still be on an upswing. 

Another indicator are the positive words of New York University professor and economist Dr. Nouriel Roubini about the Philippines' strong economic growth and resiliency, and his opinion/recommendation that the Philippines should be upgraded to investment status this year or in the next thirty months. Dr. Roubuni said these encouraging remarks about the Philippines despite his prediction last year of a "global perfect storm next year (2013) as economies the world over slow down or shudder to complete halt."[1]

Other factors which might help sustain our economic growth in the years to come would be : the transfer of Japanese companies to the country because of the ongoing territorial conflict of Japan with China, which has affected Japanese factories and companies located in mainland China; the growing tourism industry and the BPO service industry. 

The uninterrupted dollar remittances of OFW (Overseas Filipino Workers) and Filipino emigrants would still be the lifeline of the Philippine economy that will ensure  stability in case other factors fail to deliver. For years it has become the anchor of the country's economy.(The Filipino diaspora has turned out to be a blessing in disguise.) But this has to stop eventually, exports, tourism and BPO, not OFW remittances should be the country's main dollar source for its foreign currency reserve. A positive effect triggered by OFW remittances is an increase in domestic spending and consumption.

2012 Philippine GDP growth : 6.6%
Last year the Philippines had a 6.6 percent GDP growth. The best in the ASEAN region and the sixth best in the world. Let's just hope and pray that this trend continues. For the moment let's be happy that our country is Asia's laggard no more!

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