FEATURE
1 Transparent, accountable, and participatory governance
4 Just and lasting peace and the rule of law 5 Integrity of the environment and climate change adaption and mitigation
1 English as a first language 2 Highly skilled labor force and rapidly developing education system
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3 Continuing low labor costs
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These five areas give a blueprint to lawmakers, regulators, and commercial parties on how the government will seek to open up industries and create free and competitive economic environments in a planned and consistent manner. Since President Aquino’s induction, improvements in the incentives, market access, and regulatory environment for manufacturing have remained fairly unchanged. Instead, observers have seen the majority of changes in market access and regulatory environment for the agricultural, public construction, BPO, energy, employment, and education industries. All these adjustments
are having positive effects on GDP, which grew at 7.5% in the second quarter, matching China’s pace and leading the Southeast Asian countries. While FDI has grown at 185% year-over-year (at USD $2.8 billion), it continues to lag behind most of its neighbors, a situation which is expected to continue due to the fact that the industries which are seeing the most growth require a low percentage of capital investment. Part of this recent growth story can be attributed to the surge of foreign remittances, contributing 13% of GDP in 2012, as well as the increase in tourism numbers. As the the IT-BPO industry in the Philippines grows, tourism increases, and the Filipino middle-class grows to around 20% (a trend that seems virtually unstoppable due to robust numbers coming out of the Philippines Central Bank) of the population, the country will see foreign remittances decrease as overseas Filipino workers return back to the country
NOVEMBER / DECEMBER 2013
3 Rapid, inclusive, and sustained economic growth
to take advantage of the opportunties offered by a growing economy. Most pundits don’t expect this to reduce GDP as it will be a natural shift from one revenue generation stream to another, which will be powered by increased entrepreneurial activity and growing numbers of small and medium enterprises which will be taking advantage of the changing macro and micro economic landscape. There are five main factors why the Philippines has replaced India as the world’s largest voice BPO location and why it will rely upon a services industry development model (similar to Ireland’s development) to gain the high ground in a highly competitive Southeast Asian market:
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2 Poverty reduction and empowerment of the poor and vulnerable
Commitment to excellence Higher education in the Philippines is proving a growth engine for the country. Increased numbers of graduates in the fields of science and technology are powering the BPO industry.
ISSUE 01
What has marked the development of the Philippine economy in the last decade are ramifications from opening up the telecom and banking sectors starting in 1993. Since then the largest industry to develop has been the BPO industry . Over the last few years the Philippine government has enacted a number of new changes meant to open up the market to competition and ignite the same sort of growth the last significant round of revisions made. Since the Bio-fuels Act of 2006 and coupled with the price of palm oil, the number of palm plantations has increased nearly 400%. Although this is far below the production levels in Malaysia and Indonesia, the number of plantations is expected to continue to grow rapidly. The latest rounds of deregulation and promarket policies have taken place since President Benigno Aquino took office in 2010 and the new Social Contract With The Filipino People was signed (2011), which outlined five major areas that the new administration is focused on improving:
4 Well-developed BPO infrastructure 5 Global growth of BPO Add to this list the fact that there is a similarity of culture and accent between the US and the Philippines (a former US territory).