The Philippines has reason to be bullish
Filipinos have reason to face the new year bursting with hope. That is, in so far as the economy is concerned. From all indications, Asia's best performer in 2012 is headed for another banner year.
Christine Lagarde, the managing director of the International Monetary Fund (IMF), boosted this upbeat mood during her visit to Manila last December: "The Philippines is probably the only country in which we have increased the growth forecast as opposed to other places in the world where we decreased our forecast."
This, coming from the head of a multilateral agency criticised by many developing countries for prescribing austerity measures and pushing many nations to open up their economies to globalisation. The IMF, in its October 2012 "World Economic Outlook", raised its 2012 growth forecast for the Philippines to 4.8 per cent from 4.2 per cent in April. (The growth projection for this year was upgraded to 4.8 per cent from 4.7 per cent.)
Lagarde also provided a more optimistic view on the Philippine economy: "Growth in 2012 will be in excess of 5 per cent and we're looking forward to 2013 to be in the range of 5 per cent as well."
Such exuberance was likewise manifested in the Philippines' ranking second among 58 countries in the Global Consumer Confidence Survey conducted by The Nielsen Co. With a score of 118, the Philippines was next only to India and Indonesia, which both shared the top spot with 119. The survey noted that a score of 101 and higher indicated more optimism, while a score of 100 and lower meant more pessimism.
Among Southeast Asian countries, consumer confidence in the Philippines bested Thailand by 6 points and Malaysia by 13 points. Singapore and Vietnam scored below the index of 100 with 98 and 87, respectively.
As 2012 drew to a close, Standard and Poor's raised its outlook for the Philippine economy from "stable" to "positive", which means the country can expect, barring unforeseen circumstances, an actual credit-rating upgrade in the coming months.
The improved outlook followed the signing of the landmark bill reforming sin taxes that further strengthened the government's fiscal position. Some P34 billion in incremental revenues are expected to be collected from tobacco and alcohol this year due to the excise tax reform bill signed into law by President Benigno Aquino III last December 20.
Local and foreign economists and analysts are agreed that the Philippines enters 2013 with much optimism. However, there will be challenges along the way. On top of the list is the administration's anti-corruption effort. Despite President Aquino's campaign, the Philippines still ranked 105th out of 176 countries in the recent Corruption Perception Index of Transparency International.
Lack of infrastructure is another area of concern, although the government has promised to speed up approval and implementation of projects under the flagship Public-Private Partnership (PPP) programme.
In the longer run, making the benefits of growth trickle down to the masses should be the main direction. This did not escape Lagarde when she urged the government to carry on efforts toward inclusive, sustainable growth: "We share the government's view that growth should benefit the broader section of population. Inclusive growth is more sustainable and it is really to the credit of this government to make sure that growth is as inclusive as possible and inequalities can be reduced."
Indeed, for the first time in many years, Filipinos have a real reason to be bullish.