PH to post strong growth in 2025

PH to deliver one of strongest growths in ASEAN

By Anna Leah Gonzales
Philippine News Agency

January 14, 2025

MANILA – The Philippine economy is expected to post one of the highest growths in the Association of Southeast Asian Nations (ASEAN) this year, the HSBC Global Private Banking and the Bank of America (BofA) said.

ECONOMIC GROWTH. High-rise buildings as seen from Torre de Manila on Tuesday (Jan. 14, 2025). HSBC Global Private Banking expects the Philippine economy to deliver one of the strongest growths in the Association of Southeast Asian Nations this year. (PNA photo by Yancy Lim)

In a report released on Tuesday, HSBC Global Private Banking and Wealth chief investment officer for Southeast Asia and India, James Cheo, said the Philippine economy is expected to deliver one of the strongest growths in the region this year.

Cheo said economic growth would be driven by robust domestic consumption, a thriving business process outsourcing (BPO) sector, and increasing investments in digital services.

Household consumption is also expected to return to the pre-pandemic growth rate, supported by easing inflation, a strong labor market, and increased infrastructure spending.

According to Cheo, the country’s strength in services exports, including information technology and BPO services, also provides a buffer against global trade uncertainties and tariff risks.

“Services exports and overseas remittances, which remain key economic pillars, will continue to contribute significantly to economic resilience and stability in the Philippines. Monetary and fiscal policies are aligned to support growth while managing risks," he said.

He noted that the Bangko Sentral ng Pilipinas would likely reduce the policy rate to 5 percent in the third quarter of this year as it cautiously navigates external risks, such as potential volatility in the peso and the US Federal Reserve’s easing cycle.

"On the fiscal side, the government’s infrastructure agenda remains a key growth driver, supported by revenue-enhancing measures," he said.

Cheo, meanwhile, said the peso is likely to face volatility from a stronger dollar but its high carry will be a buffer.

"We are bullish on the PHP and expect it to stay resilient at 59.8 against the USD by end-2025,” he said.

In a separate report, BofA revised upward its Philippine economic growth forecast to 5.9 percent this year from the earlier 5.5 percent projection.

In the ASEAN-6, the economic projection for the Philippines is the second highest, next to Vietnam's 6.8 percent economic growth forecast.

The ASEAN-6 consists of Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.

According to BofA, the Philippines, which is domestic-oriented, is "less vulnerable" to the impact of the possible higher tariff that will be imposed by the United States.

BofA, meanwhile, said headline inflation is expected to remain within the government's 2 percent to 4 percent target. (PNA)

Office space occupancy in PH ranked 3rd globally

PH office space occupancy 3rd highest globally in H1 - consultancy firm

Jon Viktor D. Cabuenas
GMA Integrated News
30 August 2024

Philippine office space occupancy averaged 80% in the first half of the year, the third highest in the globe mainly due to the growth of the business process outsourcing (BPO) industry, real estate consultancy firm PRIME Philippines said Thursday.

According to PRIME Philippines executive vice president Cholo Florencio, the country’s office rate was only behind Singapore’s 88% and India’s 85%. It is also higher than the global average of 70%, the United States’ 62% and Europe’s 60%.

Florencio attributed the occupancy rate to the BPO sector, which reported an annual growth rate of 7% to 8%, the increasing demand from the government, and the high adoption of flexible working arrangements.

For Metro Manila alone, the occupancy rate was recorded at 85%, slightly higher than the previous year’s 84%.

“I think we will be able to sustain our momentum in terms of adding a bit of occupancy levels. The challenge really is when more buildings will be left by the online gaming companies,” Florencio said on the sidelines of a briefing in Makati City.

President Ferdinand “Bongbong” Marcos Jr., in his third state of the nation address (SONA) in July, announced the ban on Philippine Offshore Gaming Operators (POGOs), and ordered the Philippine Amusement and Gaming Corp. to wind down and stop all operations by the end of the year.

A cost-benefit analysis by the Department of Finance (DOF) showed that the POGO industry had a net cost of P99.52 billion to the Philippines, equivalent to 0.41% of the country’s economy as of 2021.

According to Florencio, there has been a decline in office space takeup, especially from POGOs since the COVID-19 pandemic, and vacancies are expected moving forward following the ban ordered by Marcos.

“There has been a very sharp decline ever since the pandemic. As you all know, the pandemic really triggered everything. It’s unfortunate lang, of course, we’ve heard a lot of negative stories about criminality, about scams that have really affected the POGOs here,” he said.

“The President has announced of course a total ban so once it is fully implemented, it will be more challenging for developers to attract more (locators) to come in,” he added.

To address the decline of takeups expected from the exit of POGOs, Florencio said developers should offer more to prospective locators such as including more benefits for them to take up space, like building more amenities.

Florencio noted, however, that he believes the country will be able to sustain the office occupancy rate as demand is still picking up from occupiers.

“Major economic driver pa rin talaga ang BPOs and then government has taken a large share of office space,” noting that government agencies have picked up demand as a lot of them need an interim space given the ongoing rehabilitations of their headquarters.

“Demand can also translate to co-working facilities, so it’s not just the traditional office space you’re seeing right now. There’s consistent demand for co-working spaces, because co-working also technically is part of the office sector,” he added.—RF, GMA Integrated News

Philippines can achieve First World status in 2050 - Palafox

First World PH achievable in 2050 – Palafox

Story by Earl John Alfaro

Manila Times

04 August 2024

THE Philippines can achieve First World status in 2050, said world-renowned Filipino architect and urban planner Felino Palafox Jr.

Speaking at a joint luncheon meeting of the Rotary Club's Makati chapters on July 29, Palafox said this can be attainable if the country can address corruption, criminality, climate change, inequality, infrastructure and investments.

By addressing these challenges, he believes that the Philippines could be the 16th highest economy in the world by 2050, as forecasted by Goldman Sachs and HSBC.

Palafox claimed that the Philippines should be a First World country, as it ranks in various industries in the world.

"We're number one in the world in sailors, seafarers. We're now number one in call centers. We are, I'd like to believe, we're number one in nurses. We're now number two in BPOs (business process outsourcing). We're number three in geothermal energy. We're the third- or fifth-longest coastline," he said.

"We're number four in shipbuilding, next to the Japanese and the Koreans. We're number five in all other mineral resources," he added.

"We are in the top ten. So we should really be a first world economy," Palafox told The Manila Times.

He mentioned that the country has a demographic soft spot in terms of average age at 26. "Filipino expatriates are the preferred employees of most employers all over the world," he continued, referring to overseas Filipino workers.

For this to happen, Palafox also said this would also take "visionary leadership, strong political will, good representation, good urban planning, good design like architectural engineering and excellent management."

By 2050, the Philippine population will reach 150 million, and 100 million Filipinos would be living in urban areas or cities. Given this scenario, Palafox said that the country will need 100 new sustainable, smart, resilient and livable cities in order to support and sustain its increasing population.

He added that the country has a very high development and investment potential.

"The Philippines is 400 times the size of Singapore. In fact, Singapore can fit inside Laguna Lake. We are 350 times the size of Hong Kong, eight times Taiwan [and] three times South Korea. South Korea is about the size of Mindanao," Palafox said, referring to the country's size and how it could use it to its advantage.

"We're very rich. God has blessed our country. In demographics, in natural resources, in beautiful islands," he concluded.

Recto: PH an 'economic giant' by 2033

Recto: PH an 'economic giant' by 2033

By Anna Leah Gonzales
Philippine News Agency
May 27, 2024

MANILA – The Philippine economy is expected to continue posting strong growth and is seen to be one of the economic giants by 2033, Department of Finance (DOF) Secretary Ralph Recto said on Monday.

In his speech at the Philippine Economic Briefing at the Philippine International Convention Center in Pasay City, Recto said global research firms and analysts expect the Philippines to grow by 5.8 to 6.3 percent this year, outperforming ASEAN economies.

For 2025, Philippine economic growth is projected to hit 5.9 percent to 6.5 percent.

"This trajectory puts us firmly on course to become a trillion-dollar economy in less than a decade. This means that by 2033, our economy will nearly triple in size, placing us in the league of economic giants like China, Japan, India, and South Korea," Recto said.

"And we are expected to continue outpacing the growth of Asia's economic powerhouses in the years to come. Fast forward to 2075, the Philippines will overtake France to become the 14th largest economy in the world," he said.

Recto assured the public that the government is addressing bottlenecks to encourage investments in high-priority sectors.

"These include infrastructure, renewable energy and power, critical minerals, financial services, healthcare, consumer and retail, manufacturing, and ITBPM (information technology and business process management), among others," he said.

Recto said the government is also intensifying efforts to address investor concerns and is doubling efforts to harness the country's workforce.

He said these efforts aim to provide pathways out of poverty for about 14 million Filipinos, or cutting poverty incidence to 9 percent, before or at the end of the President's term.

"This is the single most important number that we aim to achieve. Even with headwinds along the way, there are a lot of reasons to be confident and excited about our nation’s future," he added. (PNA)

Is Trillion Dollar economy Attainable for PH?

Could the Philippines Really Become a Trillion-Dollar Economy in the Next Decade?

Story by Currie Cator
Esquire Philippines
19 April 2024

The World Economic Forum (WEF) is optimistic that the country could be a $2-trillion-dollar economy in the next 10 years—reaching the same level as mainland China, Japan, India, South Korea, Australia, Taiwan, and Indonesia. 

That’s on the condition, though, that the Philippines scores better investments in key sectors. 

Currently, the country’s economy is pegged at around $476 billion, the WEF said.

In its property market report, consulting firm Leechiu Property Consultants said the Philippines saw an 18-percent surge in foreign tourist arrivals in the first quarter of the year. This is the highest since 2019.

The demand for hotels, tourism, and leisure went up to 1.66 million, with travelers mostly coming from South Korea at 27.5 percent. 

Overall hotel performance is expected to bounce back by 2025, according to the report.

Leechiu also reported a growth in office take-up by a quarter in the first three months of 2024, the largest over the last four years.

It said the increase in demand was observed across all industries, "indicating a widespread and robust expansion." 

Office market transactions rose to 331,000 square meters (sqm) from the 264,000 sqm. in the same period last year.

The "sustained" take-up was attributed mainly to traditional companies or government agencies, as well as the IT-BPM (information technology and business processing management) industry. Philippine Offshore Gaming Operations (POGOs) also continued to take up space, accounting for about 55,000 sqm.

Another factor driving possible growth, according to Leechiu, is the shift of the country's residential market to the provinces. 

Real estate loans outside Metro Manila rose in recent months, whereas the capital is experiencing a slowdown in residential condominium sales.

As for capital values, delayed interest rate cuts have been causing fatigue in the economy.

But Leechiu said the market remains bullish, as the U.S. presidential elections this year may force the Federal Reserve to slash rates; though it may still depend on inflationary management.

"Long-term view [is] still positive as Philippines continues to be one of the fastest growing countries in the world at 5.9 [percent]," the report said.

The country's inflation rate rose to 3.7 percent in March due to higher food prices and transportation costs.

In 2023, the Philippines recorded a full-year gross domestic product (GDP) growth rate of 5.6 percent, falling short of its six to eight-percent target.

PHL still BPO powerhouse

PHL still BPO powerhouse

Rizal Raoul Reyes
Business Mirror 
09 April 2024

THE Philippines remains a powerhouse in the business process outsourcing (BPO), ranking first in labor force among Asia Pacific outsourcing destinations, according to real estate consultancy firm Santos Knight Frank Inc. (SKFI).

Its recent report on the BPO industry shows the Philippines, tying with India for the top spot, emerged as the most well-rounded option across the Asia Pacific, in terms of overall scores in the index.

The report compares four offshoring hubs in Asia Pacific, namely: India, Malaysia, Vietnam and the Philippines. SKFI’s analysis highlights five key drivers of location choice: growth dynamics, skills, labor force, business costs and commercial real estate value.

According to SKFI, among the four major outsourcing destinations in Asia Pacific, the Philippines—which has approximately 78.7 million people in the working population—has the youngest median age of just 25 years. India records a median age of 32.4; Malaysia, 30.8; and, Vietnam, 31.6.

With its well-rounded appeal, SKFI pointed out that the Philippines will be on the radar screen of global players for their specialized outsourcing services such as finance, human resources, legal processes and analytics from the United States, Europe and Australia.

“BPO has taken off over the last 20 years and the Philippines has grown right along with it,” SKFI Senior Director Morgan McGilvray said. “What started as a novel experiment for many firms—the hiring of a few support staff in Manila—has become an integral part of their business operations that they couldn’t live without.”

Holistic Destination

THE Philippine BPO industry grew by double digits in 2021 and 2022, reaching $29.5 billion and $32.5 billion in revenues respectively. A significant part of this growth includes business expansions outside Metro Manila and into other growth centers such as Cebu, Davao, Clark, Iloilo and Bacolod City.

The latest estimates set the Philippine BPO workforce at 1.7 million people, with estimated revenues last year of $35.4 billion, while maintaining a global market share of approximately 10 percent to 15 percent.

Bolstered by Filipino talent, the IT and Business Process Association of the Philippines (IBPAP) is optimistic that the sector will further grow to $59 billion in revenue and a 2.5-million strong workforce by 2028.