I expect at least a 6% growth of GDP for the whole of 2012. Thanks to our not being too export dependent, we are partly insulated from the stagnation that the world economy will experience in 2012. Exports account for a little over 30% of our GDP in contrast with close to 200% in such tiger economies as Singapore and Hong Kong.
These rich countries will see their GDP suffering from either a decline or a significant slowdown. Not the Philippines nor Indonesia, nor China nor India. They can thank their large populations which guarantee a large domestic market for their local businesses. Although I do not accept at face value the prediction by some population commission officials that the Philippine population will reach 97 million by the end of 2012 (it will be closer to 95 million), I welcome the talk of a large population. A large population attracts investors, both domestic and foreign, because of the strong domestic market they see.
Even the lowest-income households (the so-called D and E markets) can offer attractive markets for the savvy business man who knows how to mine the "bottom of the pyramid." Ask Procter and Gamble, Unilever, Jollibee, McDonald's, Alaska Milk Corporation, Lucky Me, Nestle, etc. They are creative enough to design products that can be sold to the poorest of the poor.
Just to humor a geomancer I overheard in a New Year's television program, let me agree with his "prediction" that the "water" attached to the Dragon symbolizes a flood of investments and consumption expenditures in the Philippines for 2012. This "flood" is made possible by the significant increase in domestic savings over the last four to five years and the still healthy demographic profile of the country in which the young still outnumber significantly the senior citizens. To the RH Bill proponent, let me repeat: It's the large population, stupid!
What about "inclusive growth"? Will the growth lead to alleviating mass poverty? I am optimistic because I see the efforts of Vice President Binay complementing the excellent work of the economic team in controlling inflation and mobilizing funds for investments with pro-poor projects. I see the Vice President trying to replicate at the national level what he did when he was Mayor of Makati in ensuring that growth in one of the richest cities in the country would trickle down to the poor in terms of quality education in the public schools, health care, housing and welfare for the senior citizens.
It was a very wise move of the President to assign the Vice President to two of the most effective channels to uplift the conditions of the masses: social housing and OFW welfare. Another source of optimism is the work I see being done at the Department of Public Works and Highways whose leadership is addressing the decades-old problem of inadequate rural and agricultural infrastructures.
Next to providing their children with access to quality public education, the greatest service we can give to the poor, who are mostly in the rural areas, is to endow them with the infrastructures they need to make their small farms productive and to bring their produce to the markets cost effectively.
We may not achieve our targets for the Millennium Development Goals by 2015, but we are headed towards the right direction. We are applying emergency measures to alleviate the economic sufferings of the poorest of the poor through the Conditional Cash Transfer program.
But even more important for the medium-term reduction of poverty, we are creating the right environment for both public and private investments in the countryside, the only sustainable way of creating employment opportunities and thereby reducing mass poverty.
The following article has been doing the rounds among Filipino Facebook accounts:
12-Jan-12, Joseph Villanueva, InterAksyon.com
MANILA, Philippines - HSBC said the Philippine economy may become the 16th largest in the world by 2050, dwarfing neighbors Indonesia, Malaysia and Thailand.
The British banking giant said the Philippines could even outgrow oil-producing Saudi Arabia - host to the biggest concentration of overseas Filipino workers - or the Netherlands, which is home to a number of multinational companies.
The forecast is contained in a study projecting the size of a hundred economies 40 years hence. HSBC expanded the report from the original 30-country review published in 2011.
HSBC said the Philippine economy would likely expand 15 times from $112 billion today to $1.69 trillion in 2050. The forecast sends the Philippines 27 notches above its current ranking of 47 in the original group of 50 economies reviewed.
“Our ranking is based on an economy’s current level of development and the factors that will determine whether it has the potential to catch up with more developed nations. These fundamentals include current income per capita, rule of law, democracy, education levels and demographic change, allowing us to project forward the gross domestic product (GDP) forward,” HSBC said.
It said the Philippines' likely improvement would owe more to an expanding population than to any improvement in individual wealth.
The Philippines joins a group of 26 countries that are expected to register the fastest growth through 2050 at five percent a year on average.
Countries in this group “share a very low level of development but have made great progress in improving fundamentals. As they open themselves to the technology available elsewhere, they should enjoy many years of ‘copy and paste’ growth ahead,” HSBC said.
Other members of the group are China, India, Egypt, Malaysia, Peru, Bangladesh, Algeria, Ukraine, Vietnam, Uzbekistan, Tanzania and Kazakhstan, among others.
A second group of countries whose growth would average from three to five percent includes Brazil, Mexico, Turkey, Russia, Indonesia, Argentina, Saudi Arabia, Thailand and New Zealand.
Cellar-dwellers include developed economies such as the US, Japan, Germany, the United Kingdom, France, Canada, Italy, South Korea, Spain, Autralia, the Netherlands, Poland, Switzerland, South Africa, Austria, Sweden, Belgium, Singapore, Israel, Ireland, the United Arab Emirates, Norway, Portugal, Finland, Denmark, Cuba, Qatar, Uruguay, Luxemburg and Slovenia.