The Philippine economy is expected to continue to grow rapidly over the next decade, Rajiv Biswas, IHS Markit chief economist for Asia Pacific, emphasized in a report released on Friday, with total gross domestic product (GDP) increasing from $360 billion in 2020 to $810 billion in 2030.
Fast expansion in private consumer spending — driven by robust growth in urban household incomes — will be a crucial growth driver, he continued.
“By 2033, the Philippines is forecast to become one of the Asia-Pacific region’s one-trillion-dollar economies, joining mainland China, Japan, India, South Korea, Australia, Taiwan and Indonesia in this grouping of the largest economies in APAC,” Biswas stressed.
He added that this robust economic growth in the Philippines is also projected to support a significant rise in per capita GDP, which is seen to reach $6,500 by 2030 from $3,300 in 2020. This will aid in the development of the Philippines’ local consumer market by attracting foreign and domestic investment in a wide range of industries.
The Philippines will also gain from its membership in the Regional Comprehensive Economic Partnership (RCEP) trade deal, the IHS Markit economist underscored, owing to its very favorable rules of origin treatment, which will help to create manufacturing supply chains across the RCEP region.
“This will help to attract foreign direct investment flows for a wide range of manufacturing and infrastructure projects into the RCEP member nations, particularly into low-cost manufacturing hubs such as the Philippines,” he emphasized.
As a result, Biswas believes that the Philippine economic outlook for the next decade is very positive, with significant progress in economic development.
He also said that rapidly rising per capita GDP and living standards will contribute to a broad improvement in human development indicators and should result in a significant reduction in the number of people living in extreme poverty over the next decade.
After the negative effects of the Covid-19 pandemic, the country’s economic managers had previously said that the door to recovery was now fully open.
With a strong 7.7-percent fourth-quarter expansion, they said the full-year GDP growth for 2021 to hit 5.6 percent, which is higher than the Development Budget Coordination Committee’s target of 5 to 5.5 percent.
“The strong 2021 performance shows us that we are on the correct path to a resilient recovery. The stage is now set for growth to accelerate in 2022,” the economic managers added.
They also believe that this year, the country will not only be able to return to pre-pandemic levels, but will also be able to acquire the rank of an upper-middle income country.
“We have put in place several game-changing reforms throughout the Duterte administration and we will not slow down in these final months. We will continue to pursue structural reforms that will make the country more resilient against future crises and solidify our growth prospects,” the economic managers said.
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