Capital investment in the Philippines is surging past the rest of Southeast Asia, as the government and firms ramp up spending.
In the first nine months of the year, net physical assets in the Philippines grew 10.4 percent from a year earlier. That compared with a 6.9-percent increase in Malaysia and 5.8-percent gain in Indonesia, according to data from statistics offices.
There’s reason to remain bullish on the outlook. Philippine government spending jumped 28 percent in October, the largest rise in almost a year, with another record budget planned for 2018. Companies are also joining in: Metro Pacific Investments Corp. plans to invest as much as $16 billion through 2022 on road, water and power projects, while Ayala Land Inc. is boosting capital spending to a record $2 billion next year.
President Duterte is building a network of railroads and highways across the archipelago in an ambitious $180-billion infrastructure program. Investment firing up adds another engine to the economy, headed for a sixth year of growth exceeding 6 percent and among the world’s best performers.
“The government is very committed to keep spending strong, and that has maintained the robust momentum of the investment cycle,” said Eugenia Victorino, an economist at Australia & New Zealand Banking Group Ltd. in Singapore. “With growth firing on all cylinders, the Philippines is really standing out in a region where the outlook has turned more positive.”
Image credits: Artist’s Rendering