RP Economy Remains Robust, Says Arroyo Official

ZAMBOANGA CITY (Mindanao Examiner / 01 Feb) – The Philippine economy is growing at a robust rate with traditional goods, such as garments and agricultural sectors now being overtaken by information and communication technology (ICT) and the electronics industries, a senior Filipino government official said.

Cabinet Secretary Ricardo Saludo said since 2001, the Filipino exports, particularly in IT and services, remain very strong. In January to October 2006, exports grew by 16.4%, while full-year shipments from economic zones were recorded at $36 billion.

He said (IT) services are growing much faster than merchandise exports. By 2007, BPO (Business Process Outsource) exports are expected to exceed by $5 billion, bigger than the agriculture and garments exports combined.

"These new sectors are now the major drivers of the country's economy," he said, noting that the "country will build on its leading position in several key ICT products and ICT-enabled services."

He said the Philippines has become an IT and services-driven economy.

"The country is currently No. 4 in IT-enabled services exports after India, Canada and Ireland. We are also the 4th largest exporter of notebook PCs (personal computers) and DVD-ROMs (Digital Versatile Disc—Read Only Memory), and 5th in disk drives, while exports of semiconductor and BPO services match those of India," he said at a news conference in Zamboanga City.

With the boom in IT-enabled companies, "cyber-services" employment has nearly tripled since 2002 -- from 65,000 to 266,000 hired employees in 2006, he said.

Saludo said the information technology earnings are expected to increase to $11.7 billion in the following years -- almost equaling the current level of OFW (Overseas Filipino Workers) remittances going through the banking system.

Further growth is expected in the Cyber-services Industry. The data is broken down by key sectors. The total workforce forecast is expected to grow to more than 1 million by 2010 almost four times the 2005 level, he said.

Saludo, who was here as guest speaker in a forum sponsored by the Western Mindanao State University, said the country has at least 555 information technology-related companies.

Of these companies, one is located in Northern Luzon; 425 in the so-called Luzon Urban Beltway; 102 in Central Philippines; and 27 in Mindanao.

And the 105 Call Centers, 40 Animation Studios, and 60 BPOs and 50 Medical Transcription companies, are all part of the Global O&O (Off shoring & Outsourcing) Industry. The 300 Software Development companies service both local & Global O&O.

In addition, Saludo noted, the country's economy has been moving remarkably for the last six years.

"The Philippines has moved to a markedly higher growth plane, while inflation has moderated and job creation has surged. The country has the fastest yearly progress in economy, smallest increase in the prices, and the most number of new jobs created in the last 20 years," he said.

“As a result, the number of poor Filipinos has dropped by 5.5 million, based on the poverty incidence of 23% of families by 2006, as estimated by the National Statistical Coordination Board. Self-rated poverty is averaging 57.3%, the lowest since SWS (Social Weather Station) began the SRP survey in 1986."

He said the economy's uptrend is clear from charts showing sustained increase in Growth Domestic Product and Gross National Product since 2001.

"The Philippine economy proved resilient, owing to vital economic reforms and new industry opportunities. The linchpin sector of consumption, services and overseas Filipino workers' remittances continues to deliver, guaranteeing steady growth despite the challenging environment," Saludo explained.

He noted that the country's economic growth had reached on the level of what used to be in 1960's where the Philippine was 2nd in terms of economic ranking in Asia.

"The growth under the administration of President Gloria Macapagal Arroyo is inching its way up towards the level experienced during the terms of former presidents Quirino, Magsaysay and her father Diosdado Macapagal.”

“The current growth upgrade builds on earlier momentum under President Ramos, with growth averaging 5.02% in 1992-96 until the Asian financial crisis the next year stopped the surge," he pointed out.

Quoting World Bank's country manager Joachim von Amsberg, Saludo said that it is possible for the Philippines to takeoff by 2010. He said the World Bank pledged to support the government’s economic reform. "World Bank and the IMF (International Monetary Fund) raised their 2007 growth forecast for the Philippines, expecting the country to do better than the rest of East Asia," he said.

Saludo claimed that local businessmen, together with traders from China, India, Ireland and South Africa were optimistic with the current economic growth performance of the Philippines.

"With increasing investors’ confidence, the prices of stocks and property are back to levels before the 1997 Asian financial crisis. Foreigners are particularly bullish. Net foreign buying of RP stocks jumps 191% to P68.5 in 2006.”

“Net portfolio investment went up to 24% in 2006, after increasing six-fold in 2005. Net foreign direct investment in January-October rose to 75% increase from the same period in 2005," he said.

"There are evident reasons for the resurgent economy of the country like increased exports, increased remittances from Filipinos abroad,increased tourism and the increasing numbers of call centers and other business process outsourcing. And Philippine commerce will strengthen further with the slide in oil prices since July 2006," he said. (Darwin Wee)