Economist sees 7%-10% growth

ECONOMIST Bernardo Villegas is optimistic the Philippines can grow seven to 10 percent in the next 10 years if it would start looking at emerging countries as trade partners, amend the economic provisions of the Constitution and kill the reproductive health (RH) bill.

“The Philippines is facing the brightest prospects in the next 10 years, the brightest it has ever faced,” said Villegas during an economic forum held last Friday at the Marco Polo Hotel Cebu.

Villegas, who has been described as a “prophet of boom” for his often optimistic outlook for the country, said achieving the seven to 10 percent growth is not impossible.

He said the Hong Kong and Shanghai Banking Corp.’s (HSBC) projection that the Philippines will emerge in 2050 as the sixteenth largest economy in the world is a “welcome news” to bank on, surpassing Indonesia, Australia, Argentina, Egypt, Malaysia, Saudi Arabia Thailand, the Netherlands, Poland, Peru, Iran, Colombia, Switzerland, and Pakistan in the list of the top 30 by the year 2050.

“The perception about the Philippines has changed dramatically that this former ‘sick man of Asia’ was catapulted 27 places to number 16,” said Villegas.

He said Philippines is part of a new group of up and coming countries called TIP (Turkey, Indonesia and the Philippines) identified by Morgan Stanley’s Emerging Markets head Ruchir Sharma in his book Breakout Nations.

“Forget about BRIC (Brazil, Russia, India and China). It’s now all about the TIP,” Villegas said.

To achieve growth targets, he said the Philippines should build closer relations with non-traditional markets.

“Emerging markets is the key phrase in attracting investors,” he said.

Villegas said “emerging markets” are those countries that have strong domestic market of at least 50 million people, strong enough to offset the big fall on exports.

The Philippine population is now 95 million. Villegas said a large populace is an asset and not a liability to an emerging country like the Philippines.

“China is no longer a giant in terms of being the manufacturing hub in the world because of its one child policy. That is why RH bill is a stupid bill from an economic viewpoint,” he said.

To achieve a sustainable growth even after PNoy’s stint, Villegas also supports the move to amend the economic provisions of the constitution saying that if amended it could attract further investments and reduce poverty incidence in the country.

“There are economic provisions in our constitution that are serious obstacles to the national economy attaining the growth rates that are necessary,” Villegas said, who was a member of the Constitutional Commission that drafted the Philippine Constitution under the government of former president Cory Aquino.

Villegas said a gross domestic product (GDP) growth of seven to 10 percent per annum must be sustained in order to reduce poverty incidence to 10 percent. He said high GDP growth cannot be attained without large infusion of foreign direct investments.