I HAD the distinct honor to conduct a Philippine economic briefing in the Financial Centers of the World: Focus on Manila webinar at the Z/Yen FS Club in London last February 13.

Z/Yen is a think tank co-founded by Prof. Michael Mainelli, incoming Lord Mayor of London. Z/Yen is the premier global executive knowledge network for technology and finance where the leading industry thinkers provide an up-to-date assessment of key events and developments likely to affect the future of the financial services industry. It is also an opportunity to discuss key topics to gain a greater understanding of current and emerging areas in global economics, society and technology.

My presentation for this webinar series focused on Philippine economic highlights and how it relates to the wider growth story of the Association of Southeast Asian Nations (Asean) region, the enabling Philippine regulatory environment, structural reforms and investment opportunities in the country.

Analysts have moderated their global growth forecasts for 2023. However, Asean is expected to perform better than the global forecasts and remains to be among the fastest-growing regions in the world. The International Monetary Fund, in its latest World Economic Outlook, forecasts global economic growth to slow down to 2.9 percent in 2023 from 3.4 percent in 2022, versus an expected growth rate of 4 percent in emerging markets and developing economies. Credit Suisse expects a 4.4-percent growth in the Asean region, lower than its previous projection of 5.6 percent, but still significantly higher than the projected global average.

From the foregoing, we can see that emerging and developing markets in Asia are expected to grow 5.3 percent and 5.2 percent in 2023 and 2024, respectively — a projection that significantly outperforms the rest of the world. Hence, Asean remains to be an attractive investment option, providing exposure to one of the fastest-growing regions in the world.

For Philippine economic highlights, gross domestic product (GDP) expanded by 7.2 percent in the fourth quarter of 2022, bringing the full-year GDP to 7.6 percent, the highest recorded full-year growth in 46 years or since 1976. Domestic growth was supported by consumer spending following increased mobility since the lifting of Covid-19 restrictions; and has allowed the Philippine economy to outperform Indonesia, Thailand and Singapore.

S&P global analysts predict a higher than 5-percent growth rate for the Philippines in 2023, notably higher than global forecasts, signaling that the global slowdown would have less impact on domestic demand-driven economies such as our country.

For enabling business environments, the Philippine Development Plan 2023-2028 is a comprehensive socioeconomic agenda aimed at tackling immediate concerns and at the same time setting into motion deep economic and social transformation to provide growth opportunities for all Filipinos. One goal is to reach upper-middle income status by 2025.

Economic liberalization measures have opened public services such as telecommunications, toll roads, shipping and expressways to 100-percent foreign ownership. The renewable energy sector has also been opened up to full foreign ownership. Public-private partnership through the Build, Better, More Infrastructure agenda will further boost investments on top of the government’s goal to allot at least 5 to 6 percent of GDP to infrastructure annually.

Lastly, investment activities in the domestic market were able to raise P145 billion (or GBP 2.2 billion) through initial public offerings in 2021, more than 600-percent increase from the previous year’s P18 billion. In 2022, the market was able to raise P22 billion, reflecting the upside potential of the domestic stock market.

As for the corporate debt market, it was able to raise P325.9 billion (around GBP 5 billion) in bond offerings in 2022, up 117 percent versus 2021 and 274 percent versus 2020. Moreover, at the recently concluded World Economic Forum in Davos, Switzerland, several international companies have expressed interest to expand in the country such as global asset manager BlackRock, financial services Morgan Stanley, Swiss mining multinational Glencore, logistics firm BP World, insurance giant AXA, satellite provider Astranis and online education provider Coursera.

To summarize, the seven key advantages of the Philippines are a huge consumer base at the back of a fast-growing population, Asean affiliation, young and growing population, liberalized policies and regulations on foreign investments, progressive capital market regulatory framework, booming information technology-business process outsourcing sector and conducive location. All these make the Philippines a really good destination for investors and businesses.

Kelvin Lester K. Lee is a commissioner of the Securities and Exchange Commission (SEC). The views and opinions stated herein are his own. You may email your comments and questions to [email protected]