I was recently in the Philippines for the World Economic Forum (WEF) on East Asia. Every time I visit, I am struck by the energy in the air.
Much of this can be attributed to the good leadership of Philippine President Benigno “NoyNoy” Aquino III.
When I first met him in 2010 (he was just a simple senator back then), he struck me as someone having a “charisma deficit.”
He was unassuming and didn’t deliver eloquent or dramatic speeches. Well, NoyNoy has proven to be a giant who has delivered.
Under him, the Philippines – once the “Sick Man of Asia” – and ASEAN's second-largest member in terms of population (nearly 100 million) has staged a remarkable recovery.
The streets of the Makati business district resound with the boom of construction, as ever-taller skyscrapers turn the former colonial city into a quasi-Manhattan or Pudong. Politically, NoyNoy’s administration has been bold, decisive and morally upright – rooting out corruption, tearing up red-tape and easing business.
He is straightforward, focusing on the work that needs to be done. This focus on substance has seen the country prosper. The Philippines is predicted to become a trillion-dollar economy by 2030. Its GDP grew by 7.2% in 2013 despite the devastation of Typhoon Haiyan.
Indeed, it was the second-fastest growing economy in Asia after China. Growth for the first quarter of 2014 is expected to be around 7% or better. Official forecasts for 2014 predict its economy will grow between 6.5%-7.5%.
Crucial industries such as business process outsourcing (BPO) continue to outperform and has even surpassed India as the world leader.
This success speaks volumes of the quality of Philippine human capital. Aquino hasn’t focused on extractive industries but on improving skills and language training, making Philippine workers world-beaters.
This bodes well for reducing the number of Overseas Foreign Workers (OFWs). Their remittances are generous but the social cost of citizens having to leave their homes to work abroad is growing.
Another sector worth watching is the gaming industry. Four USD1 billion integrated resorts are being developed in Manila Bay’s Entertainment City.
Revenues in 2013 was just USD2.2 billion but this could grow with the regulatory Philippine Amusement and Gaming Corporation’s (PAGCOR) reducing fees for licences.
The real attraction of the Philippines to me however is its vibrant and lively culture. Philippine music, art and television are raucous, fun and irreverent—everything I love.
Of course, this is not to say that the Philippines doesn’t have its own set of challenges.
Like that other Southeast Asian giant, Indonesia, poor infrastructure remains a perennial problem. Manila’s Ninoy Aquino International Airport has a “disaster zone” feel to it.
Still, the administration will seek to raise USD8 billion to upgrade and develop its infrastructure, including highways and airports.
Also, the Philippines is still struggling with making its growth more inclusive. The World Bank has pointed out that while the Philippines’ Gini Coefficient is 0.43, the rich-poor gap there might be worse in reality.
And while March’s peace agreement with the Moro Islamic Liberation Front (MILF) was rightly hailed—security remains an issue in the south, combined with the on-going problems of hard core poverty and corruption.
It’s current maritime boundary dispute with China—which has been brought to the Permanent Court of Arbitration (a body the North Asian giant refuses to submit to)—is doing little to cool tensions in Southeast Asia.
Poor relations with China also rob it of the tourist and investment dollars that it desperately needs to continue its growth.
Furthermore, the fact that the Philippine Constitution mandates that Aquino must step down in 2016 after just one 6-year term in office means that the turnaround is at risk if his successor does not share his reforming zeal.
This may give pause to many would-be investors in the Philippines, which it can ill-afford as perceptions are everything in the great game of global business.
The Philippines has come a long way and it can go further—if its people want it to. Electing leaders who can continue Aquino’s agenda will ensure that the Philippines becomes not only a more prosperous and just country, but also an influential one.
But I will keep on saying this: if you want to see the next big thing, go to the Philippines!