THE Philippines deserves a second look from Singaporean investors because of the Duterte administration’s infrastructure push via the “Build, Build, Build” (BBB) program, according to the Department of Finance (DOF).
Finance Secretary Carlos Dominguez III said the BBB program helps create jobs and shields the country’s economy from the trade conflict between the United States and China and other risks to GDP growth.
The BBB program also boosts efforts that aim to improve the business climate in the Philippines. Infrastructure modernization would lead to improved doing-business processes.
“Private sector participation is not only in our country’s BBB program, but also in investments that would open up as a result of our infrastructure modernization, and we think that the Singaporean investors should take a close look at that,” Dominguez said in a statement.
“Even as the global economic outlook deteriorates further, we are confident that the economic stimulus provided by our infrastructure program will continue to create new jobs and be very beneficial for businesses in the sense that it will lower your logistics costs in the Philippines,” he added.
This was part of the address of Dominguez to the visiting delegation from the Singapore Business Federation (SBF) at the DOF on Monday.
Led by its chairman, Teo Siong Seng, the SBF met with Dominguez and other DOF officials to know more about the business climate in the country and explore investment opportunities here. The SBF represents 25,800 companies based in Singapore.
The Duterte administration, through the BBB, Dominguez said, “delivered in the field.” Under the ambitious infrastructure program, the country increased spending on infrastructure from a mere 2.5 percent of the country’s GDP in the last 50 years, to 5 percent of GDP in 2018.
Dominguez also said the Philippines expects to hit upper middle-income country status next year on the back of stable macroeconomic fundamentals and “game-changing” reforms such as the Tax Reform for Acceleration and Inclusion (TRAIN) law, which allowed the Philippines not only to support its “Build, Build, Build” program but also to ramp up spending on human capital.
Another key advantage which Dominguez said makes him “even more confident” of the economy’s stable outlook, is the country’s young and well-educated workforce with a median age of 24 years old.
This is in sharp contrast to the aging populations of the region’s more mature industrialized countries and some Asean economies. Singapore can team up with the Philippines as “demographic partners” so they complement each other’s economic strengths, Dominguez said.
The recent upgrade of the country’s credit rating and other developments in the economic front make the Philippines a “prime” investment destination, he added.
Dominguez cited the sufficient gross international reserves (GIR) at over $86 billion. The enactment of the rice trade liberalization law, he said, will keep rice prices down.
Image credits: Department of Finance