The Philippine economy will grow by a significant amount before 2030 to become one of the largest in Southeast Asia. A burgeoning middle class and a strong industrial sector will support this.
IHS Global, an internationally-focused publisher and think tank, said that the Philippine government’s business-friendly policies and innovation will draw in larger amounts of foreign direct investment (FDI). They believe it will create more jobs while raising income and consumption.
Economists forecast that growth will average 5.5% between now and 2020. Per capita GDP could double to US$6,000 a year by 2024 if this rate is sustained. By 2029, the size of the economy would more than triple from US$310 billion in 2015 to over US$1 trillion.
“These significant increases in per capita GDP will create one of ASEAN’s largest consumer markets”, explained IHS Global Asia Pacific chief economist Rajiv Biswas.
Look to the Future: Philippine Economy in 2030
The most important drivers of growth for the Philippine economy are the outsourcing sector and a strong flow of remittances from workers living abroad.
Gains from these activities are attributed to the large pool of university-educated workers. Workers also have strong English-language skills compared to the rest of Asia.
In the Philippines, revenue from the business process outsourcing (BPO) sector more than doubled between 2008 and 2014. Meanwhile, the total number of employees in the IT-BPO industry grew to over 1 million.
More than 1.3 million employees will work in the Philippine BPO sector before next year. The fast-paced growth of this sector also supports development in metropolitan areas. Manila and Cebu are now among the world’s top BPO hubs.
Furthermore, offshore remittances from Filipino workers abroad grew to a record high of US$26.9 billion in 2014. That’s up 6.2% from 2013, providing a key source of strength for the Philippines’ balance of payments.
Offshore remittances directly support consumer spending and residential property construction. An estimated 10 million Filipinos live abroad and remit payments every month.
Looking toward the long term, the development of the Philippine economy depends on the manufacturing sector’s competitiveness. The nation’s ability to maintain high efficiency and attract foreign investment matters a lot too.
“This requires considerable improvement of the business climate. The Philippines still ranked very low globally on the World Bank’s ease of doing business rankings,” said Biswas.
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