Can the next Philippine president keep the economy growing?
Dan Steinbock says the country, now expanding at 6.5 per cent a year, has come a long way from its days as the ‘sick man of Asia’, and the election on May 9 of a successor to Benigno Aquino will be keenly watched
After the rule of president Ferdinand Marcos, from 1965 to 1986, and a close relationship with the US Reagan administration, the Philippines became known as the “sick man of Asia”. But over the past six years, confidence has been restored by President Benigno Aquino, who enjoys the trust of most Filipinos, according to surveys. As a fourth-generation politician, Aquino’s 2010 election win was buttressed by the legacy of his father, an opposition leader assassinated by Marcos, and his mother, the first post-Marcos president.
President Benigno Aquino takes the Philippines forward
Today, the Catholic-majority Philippines is widely seen as one of the most promising economies in Asia, although it is still haunted by centrifugal forces. Politically, it is witnessing the rise of new and more independent leaders, though old political dynasties still cast a shadow over its future.
Strategically, Washington and Manila are cementing a military alliance that leaves many Filipinos apprehensive.
Currently, the economy’s growth potential stands at 6.5 per cent per annum, with services, construction, manufacturing and consumption fuelling this. The future of IT business services is also promising. Yet, public underspending, lower exports, soft agricultural production and outflowing portfolio investments restrain growth.
This real estate fund would rather invest in the Philippines than China
One tenth of the gross domestic product remains reliant on remittances and the Filipinos working in the Middle East have been hit hard by the plunge in oil prices. Public investment remains too low, due to weak execution. Investment in human capital has increased, but should be accelerated. The poverty rate remains around 20-25 per cent, and income inequality is high.
