Philippine economic expansion and endless pursuit for prosperity
My Cup Of Liberty
At Monday’s Philippine Economic Briefing (PEB) at the Philippine International Convention Center, which had the theme “PH On-the-Go: Fast-Tracking Economic Progress,” the keynote address was given by Fi-nance Secretary Ralph G. Recto, who correctly described the Philippines’ growth trend as having a “bright economic outlook supported by a more open and liberalized investment policy landscape.” He said they plan to “lift 14 million Filipinos out of poverty by 2028… position the country as the 13th largest consumer market globally by 2030… [have a] a trillion-dollar economy by 2033 and surpass France to become the 14th largest economy in the world by 2075.”
Since these are global macroeconomic scanning and projections, I checked the IMF’s World Economic Outlook (WEO) database to make comparisons.
I did not use gross domestic product (GDP) nominal values in US$ for global comparison because these are GDP size at national currencies divided by the average exchange rate to the US$ that year. So even if the GDP in national currency has expanded considerably but the exchange rate has deteriorated, the GDP in US$ expansion is low. Instead, I used the GDP at Purchasing Power Parity (PPP) values because it considers the cost-of-living valua-tion in each country.
At GDP-PPP values, the Philippines was already a trillion-dollar economy in 2019. And in 2023, the Philippines had a GDP size of a $1.28 trillion and was the 29th largest economy in the world, with China, the US, and India as the top three largest economies.
I also compared the GDP size of various countries in 2013 to 2023. The Philippine economy expanded by 96%, nearly doubled, in just one decade. Vietnam, India, and China have expanded over 100%.
Then I checked the GDP growth in percent for the first quarter (Q1) of each year in 2022, 2023, and 2024. Considering these, the Philippines’ and Vietnam’s growth this year are the second fastest to Taiwan’s 6.5% — but this is largely due to base effect, Taiwan’s economy contracted by 3.5% in Q1 2023. So, it is really the Philippines and Vietnam which have had the fastest growth in Q1 2024 among the major economies in the world —except per-haps India which has not reported its Q1 growth yet (see the table).
Notice the moderate expansion in GDP size over a decade of the G7 industrial countries, especially Japan and many European countries (except Ireland, Romania, and Poland). Looking at GDP growth in Q1 2024, most G7 countries and other European nations either have had slow growth (below 1.5%) or have seen degrowth and contraction. It is then a structural, not occasional or isolated economic disease. Among the explanations for this trend is their climate and energy policies, and the boomerang of their economic sanctions vs Russia.
OTHER SPEAKERS AT THE PEB
Budget Secretary Amenah F. Pangandaman highlighted the decline in budget deficit, from -6.2% last year to a programmed -5.6% this year and -3.7% by 2028. Meanwhile the infrastructure program would increase from 5.8% of GDP (P1.4 trillion) in 2023 to 6% of GDP (P2.2 trillion) in 2028.
Economic Planning Secretary Arsenio M. Balisacan again discussed the Philippine Development Plan 2023-2028 and among the important targets are achieving an unemployment rate of below 5%, and single-digit poverty incidence by 2028.
Bangko Sentral Assistant Governor Iluminada T. Sicat discussed the three mandates of price stability, financial/banking stability, and payments and settlement system, and spoke of why they will keep the tight monetary policies due to inflation concerns.
Assistant to the President for Investment Secretary Frederick D. Go explained some big investment projects — from infrastructure to shipbuilding and mining — which may come in or already entering the Philippines.
Public Works Secretary Manuel M. Bonoan showed short videos of big bridge projects, like the ongoing Panguil Bay bridge project in Mindanao (3.2 km long and expected to open by third quarter this year), and the proposed Cavite-Bataan Interlink bridge (32.2 km), and the Panay-Guimaras-Negros bridge (32.5 km). Meanwhile, Transportation Secretary Jaime J. Bautista discussed many ongoing and proposed projects: big airports, railways, seaports, and land transport.
Other speakers were Trade Secretary Alfredo E. Pascual, Agriculture Undersecretary Jerome V. Oliveros, Department of Information and Communications Technology Undersecretary Paul Joseph Mercado, and Energy Assistant Secretary Mario C. Marasigan.
SMC conglomerate President and CEO Ramon S. Ang also spoke during the open forum and discussed energy issues like how our ASEAN neighbors subsidize their fossil fuel energy (oil, gas, coal) while the Philippines is taxing and raising the prices of these important goods.
There were hundreds of people at the PEB that day — a huge turnout — from government to corporations, the diplomatic community, media, etc. Judging from the size and enthusiasm of the audience, I believe that key messages of the theme, “PH On-the-Go: Fast-Tracking Economic Progress” have been delivered.
We must focus on high and sustained growth, economic prosperity, material wealth, and the upliftment of the poor to become middle class, and of the middle class to become richer. Peripheral concerns like climate and en-forced equality should not hinder this socio-economic goal.
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