THE global economy is on the rebound, and this will translate to healthy trade and investments in the near term, said Asian Development Bank Economics and Research Department lead economist Dr. Ernesto M. Pernia, at last week’s PortCalls Cargo Economics Conference 2003 at the Hyatt Regency Manila.
Asia is showing signs of improvement and will retain its title as the fastest-growing region in the world, he said.
Exports and investments remain to be Asia’s main growth drivers, and are particularly robust in countries such as China, Thailand, Vietnam and India.
Pernia said the Philippines is likely to exhibit slower growth compared with other neighboring Asian countries.
“Over the past 20 years, per capita GDP (gross domestic product) growth in the Philippines has lagged far behind that of several other Asian countries. In fact, the modest growth of the 1990s barely made up for the contraction of the 1980s, leaving average per capita incomes in the Philippines today just marginally higher than they were two decades ago.”
Investments, he said, have also been “constrained by a low savings rate owing to the dependency burden of high population growth. And an unfavorable investment climate keeps foreign direct investment low.”
In addition, the country’s dependency on electronics industry as its main export driver makes it vulnerable to “external market swings.”
The Philippines, Pernia said, must seize opportunities to achieve a turnaround, adding it could benefit from the growing importance of China as an export market, and the recently forged Bali Concord which would attract more intra-regional trade and investment.
To help achieve growth, Pernia said law and order must be in place; institutions must be strengthened and governance improved; investment climate (essentially the regulatory system and infrastructure) improved; export sector diversified; reversals in trade liberalization avoided; and population growth slowed.