Theme: Gearing Up for ASEAN Integration
Date: May 19, 2014
Venue: Mandarin Oriental Hotel
Once called the “sick man of Asia”, the Philippines now has a much healthier and stronger economy, driven by robust domestic demand and investment, low inflation and larger inward remittances, as well as prudent debt management and better governance. This transformation has prompted the three leading ratings agencies to upgrade the Philippines to investment grade status, with Standard & Poor’s this month further raising its rating to BBB. Compared with many other countries in the region, the Philippines’ prospects appear the brightest.
The landscape however is changing. A single-market ASEAN Economic Community, planned from 2015, will gradually liberalize trade and services, integrate capital markets, and facilitate intra-regional mobility for ASEAN’s 600 million people. This will enhance opportunities for investment and economic growth, but at the same time sharpen competition among ASEAN countries. Benigno Aquino III’s administration and the Philippines’ key business sectors will have to ensure they are prepared for both the benefits and risks of economic integration.
The Philippines is also not immune to global or regional economic pressures. External markets generally are being affected by the recalibration of monetary flows following the US Fed’s move to taper its expansion of liquidity. Philippine financial authorities have to remain vigilant about domestic credit conditions, while those in charge of trade and industry have to ensure that capital is directed towards the right projects, such as essential infrastructure.
Is the Philippines ready for ASEAN Integration? What are the main risks to continued strong economic and investment growth? What further policies should be adopted to attract institutional capital? What sectors present the most potential for continued expansion?