The Philippines has overcome the uncertainty and many challenges posed byCOVID-19. And the Duterte government is ready deliver to the next administration an economy that is healing.
The Department of Trade and Industry said what the Philippines has gone through is not unique. Trade Secretary Ramon Lopez said that country’s predicament is not unique to the Philippines, and just like any country in crisis, the government has been forced to make big decisions.
“The pandemic has required us to borrow more. These is one of the challenges now. But at least the income capacity, the income fundamentals of the country is there,” he said, adding the Philippines’ journey to recovery is on the right path now.
He noted a third of the current government’s term was spent battling the pandemic and preventing economic recession from spiraling further down.
And while the masks, constant hand washing, quarantine and vaccination were the norm in pandemic years, the burden of debt-servicing becomes part of the new normal.
Despite this, the DTI shares its optimism of a stable rebound of the economy in 2022 on hopes that business sectors will be back on track to pre-pandemic levels as the health crisis wanes.
“As the Omicron scare fades and COVID cases drop, the uncertainty in the business sector dissipates. Hopefully, this will be the end of the Omicron and barring any new variant, we’re starting to see the end of the pandemic. And as we see new variants, we believe that these new variants like the Omicron will be milder,” said Lopez.
The resurgence of exports and foreign direct investments (FDI) are good indications that the economy is in the upswing. FDI has never been better, now back at record levels surpassing 2019 FDI by 23 percent, and averaging $8 billion to $9 billion a year from just $3.2 billion in years before 2016.
While exports brings in revenues, FDIs brings in jobs―a perfect combination to spur business activities and a sweet recipe for recovery, said Lopez.
“And with this we can expect that the economy will continue to reopen. Definitely, it will be a full recovery for all,” said Lopez noting that the Philippines now ranks 4th in the ASEAN in terms of FDI growth from 6th.
Key to sustained growth, Lopez added, are the legislative measures and multilateral treaties that will support trade and investments in the long term.
Hot on the plate is the anticipated concurrence by the Senate to ratify the Regional Comprehensive Economic Partnership, which received pledges of support from many business groups including business chambers and federations.
Lopez said the Philippines missed the first ride as fellow RCEP signatories―Australia, New Zealand, Brunei Darussalam, Cambodia, China, Japan, Laos, Singapore, South Korea, Thailand and Vietnam –started to enforce the treaty in as early as January 1, 2022 .
“We are part of global value chain. To delay ratification is to give the edge to our competitor countries. They will enjoy lower tariffs. In fact they are gaining more opportunities in terms of market access and investments in their sectors, as we speak. We should not be inward-looking,” he said.
He cited the erosion of market shares in major exports like pineapples, bananas, canned tuna and fish products, coconut, cacao, garments and electronics.
“Opportunities for our professional service exports such as engineers and architects will not be maximized. We will lose the gains we had. Investors would rather go to those countries with more market access. This will be the effect of an inward-looking policy,” Lopez said.