In First Metro Investments Corp. and University of Asia & the Pacific’s macroeconomic briefing last January 4th, it was predicted that 2018 will be a better year for the Philippines in terms of economic growth. In 2017, GDP growth was at an impressive 6.9%, but this 2018, it is projected to grow at a spectacular rate of 7 to 7.5%.
On the other hand, the World Bank expects the Philippines to merely sustain its growth in the next three years at 6.7% in 2018 and 2019 before slowing down at 6.5% in 2020 after public investments start to decrease.
While these projections are below the Philippine government’s target GDP growth for the next three years, the country still will continue to prevail as “the fastest-growing economy in the Association of Southeast Asian Nations (ASEAN), despite some stabilization of investment growth,” as stated in its January 2018 Global Economic Prospects report.
Meanwhile, FMIC president, Rabboni Francis Arjonillo, argues that all engines of growth in the country are already up and running at a faster pace, so the Philippine economy will accelerate at a faster pace this 2018. The new TRAIN (Tax Reform for Acceleration and Inclusion) law, the government’s “Build, Build, Build” program, and the demographic sweet spot the country is experiencing will drive economic expansion further.
Regardless of whose prediction is right, the GDP projections for the Philippines remain positive from both sides. This outlook of economic growth benefits foreign investors thinking of starting a business in the Philippines even more than they did in 2017.
The Philippines Marked the Highest FDI Growth in ASEAN
Last year, the Philippines registered the highest rate of foreign direct investment (FDI) growth in the ASEAN region. The foreign direct investments grew by 40% from 2015 to 2016, totaling to $7.9 billion, giving the country the honor of being hailed as the fourth-highest recipient of FDI among the ten nations in the group. This award will allow the Philippines to open new doors to international trade and foreign investment opportunities.
A high GDP translates to a higher purchasing power for a larger part of the economy, and an increased standard of living, as evidenced by the continuous industrialization.
Left and right, you’ll see the construction and development of condominiums, townships, and business hubs. Consequently, there will be an increase in the manufacturing and consumption of consumer goods and services.
As the country’s economy continues to steam ahead, foreign investors stand to gain a lot. Just imagine being part of a dynamic, vibrant, emerging market. There is no shortage of investment opportunities, so starting a business in the Philippines during an exciting time of economic growth is a great business decision.
Establishing a business in a country with a high GDP offers foreign investors better opportunities for expansion. As the best performing economy in the ASEAN, the country’s external position remains strong.
Hosting the last ASEAN summit further enabled the Philippines to showcase its thriving cities and credentials as an emerging economic power to various world leaders and business drivers. Delaying investments would mean lost opportunities to foreign investors.
The Philippines as a Smart Investment Destination
The Philippines boasts of many inherent advantages as an investment destination. As the second-largest population in Asia with a growing middle-income class, the country’s standard of living and education is also improving.
Ultimately, this translates to a larger talent pool of highly educated and skilled young professionals who are highly proficient in the English language, so you won’t have a hard time in terms of business communications.
Many foreigners, in fact, will attest to how working with Filipinos can be such a breeze. Apart from their excellent grasp of the English language, the Filipino culture is also flexible and their work ethics are unparalleled. Filipinos are known as hard-working, dedicated, and passionate about their craft.
When starting a business in the Philippines, foreign investors can enjoy a business-friendly landscape, where the government continues to offer its foreign direct investors with tax incentives and exemptions, and streamlined registration processes that will help them easily launch their operations.
Both the First Metro Investments Corp. and the World Bank foresee a positive GDP for the coming years, and this only means one thing—economic growth that is beneficial to foreign investors.