“MAKE IT HAPPEN IN THE PHILIPPINES” GLOBAL CAMPAIGN
From a paper delivered during the Dec. 10 webinar, “Health and Economic Outlook for 2021—Sparking Hope: Will a Vaccine see an end to the Pandemic?” conducted by the Philippines Graphic-BusinessMirror, in partnership with the Pharmaceutical & Healthcare Association of the Philippines (PHAP).
I just wish to discuss, the Philippines recently launched “Make it Happen in the Philippines” global campaign.
The country’s new investment promotion brand “Make it Happen in the Philippines” is more than just a brand or a tagline. It speaks of who we are as Filipinos and as government. It highlights our genuine Filipino trait of resilience and make–it–work mindset that exudes strength and adaptability even in times of adversity.
The success of our repurposing manufacturing program is a testament to this mindset. It demonstrates the agility of Philippine industries to adopt to changing business environments anchored on the country’s growing industrial baseline and ability to leverage a broader ecosystem or inter and intra industry partnerships.
From a production capacity of two million pieces of surgical masks per month, and none for coveralls pre–COVID, we were able to ramp up our domestic production capacity to 60 million medical grade face masks and 3.2 million pieces of medical grade coveralls per month. Together, we made it happen.
“Make it Happen in the Philippines” is also a promise to Filipinos and anyone doing business or wanting to do business in the Philippines that we will build back better. That is why we set out to implement “ReBUILD,” our initiative which stands for Revitalizing Businesses, Investments, Livelihood and Domestic Demand. This is our economy recovery plan admidst the pandemic. It is anchored on a vision to create a modern, dynamic, and responsible Philippines. It is aimed at jumpstarting and reinvigorating the Philippine economy by revitalizing consumption and enhancing production capacity.
The two broad strategies of “ReBUILD” are to revitalize the demand side and on the supply side, empower local industries to capture the demand in agriculture, industry and services. On the demand side it starts with government support via economic stimulus to save thousands of companies to keep jobs. This is important to restimulate the purchasing power and demand to attract more production activities and create better business environment for investments.
On the supply side, we should enhance production capacities in the agriculture industry and services sector to help build our export competitiveness and manage imports. This creates a dynamic cycle of sustained and growing economic activity with strong domestic linkages. Hence, the infusion of more foreign direct investments plays a dual, critical role in our country’s economic development. It addresses the supply chain gaps in production and it also provides for the physical and digital infrastructure to enable the modernization of Philippine industries.
Rebuilding the robust growth of the Philippines will start from strategies outlined under the “ReBUILD” initiative. This will hinge on key drivers that have enabled the Philippine economy to thrive in previous years. With a stable and large domestic market of 110 million people, our population is expected to grow by 16.8% from 2017 to 2026. We are in a demographic sweet spot with the average age of Filipinos being 24 years old which means significant latent demand for goods and services in the country.
The Philippines has also preferential market access in major markets through our free trade and preferential trade agreements with ASEAN (Association of South East Asian Nations), with Japan, Korea, with China, with India, with Australia, New Zealand, EU (European Union), EU FTA (European Free Trade Association), Russia, US and Canada.
The recent conclusion of the regional mega free trade agreement, the Regional Comprehensive Economic Partnership or RCEP is further expected to strengthen the Philippine advantage. These agreements signals a renewed vow in a rules based system for trade and investment in the region with our key trade partners. I have mentioned ASEAN plus the five other countries Australia, China, Japan, Korea and New Zealand. It covers not only the usual areas of trade in goods and services, investment and economic cooperation but emerging trade areas or topics of interest like intellectual property, electronic commerce or ecommerce, government procurement and competition.
Moreover, the country has been a reliable manufacturing base for export–oriented industries. The Philippines has veered away from the imposition of export restrictions even at the height of the pandemic, even for critical medical products during this pandemic. Instead, we capacitate manufacturing firms to repurpose to enable them to support both domestic and foreign demand.
As a testament of our “Make It Happen” brand, we have a large pool of trainable, skilled and cost efficient workforce who are also competent, hard working and loyal. Among the ASEAN member states, the Philippines produces among the highest number of tertiary graduates most of which are into engineering, IT–related fields, medicine, health related fields, and agri–forestry.
Prior to the pandemic, the Philippines had very strong economic fundamentals. We were growing at an average of 6.6% over the period of 2016 to 2019 under the Duterte administration. The Philippines was also the third fastest growing economy in Asia. In 2019, our per capita GDP stood at US$3,400 to 3,500 and we were projecting to breach the US$4,000 mark to become an upper middle income country by this year 2020 if COVID–19 did not happen.
Our astute monetary policy enabled us to have low and stable inflation rates averaging at 2.5% in 2019 and even into 2020 this year. Also last year, we had a strong fiscal position whereby we achieved the highest revenues and lowest debt of shares in GDP. We also had our lowest unemployment rate at 5% in 2019 and we even received the highest ever credit ratings with the range of Triple B+ to A– from credit rating agencies. But then again, because of the pandemic and the strict lockdown this year from March, our strong economic growth of 6% took a dive to –16.9% in the second quarter and improving a bit to –11.5% in the third quarter. Our 5% unemployment rate that I mentioned in the past years even up to 2019 worsened to 17.7% in April. However, there were signs of recovery as we are reopening some sectors, many sectors of the economy over the past few months so this unemployment rate of 17.7% went down to 10% in July and the latest number is 8.7% in October. So these are signs of good recovery although we are still very far from pre–COVID levels.
Because of COVID–19, lives were lost. The health of many of our people suffered. Livelihoods were affected and the dreams of many were put on hold. We owe it to our people, every Filipino and every investor, must put their trust and faith in the Philippines to rebuild a better economy. We will make it happen with the passing of the appropriate recovery tax incentives for enterprises or the CREATE Bill at the Senate. We expect more great things for the country to happen and hopefully, this CREATE Bill will be signed by our President this December.
The Philippines is then working on a V–shaped economic recovery. We expect to sustain this towards the end of the year and look forward to a stronger recovery in 2021. Through this, we recently recalibrated our GDP forecast for our country to a robust 7.8% for 2021 instead of the original 5.2% projection. Some other signs of recovery, other export performance after dropping by half, by 50%, in April of this year has started to go up to –35%, –17%, –10%, –9% and now it is at 2%, first time again that it is in positive territory, taking note that prior to the lockdown in March, we were still doing positive growth rate in January with 9.4% and February 2.8% and even from last year in 2019. We were one of two or three countries, I think, who were posting positive export growth amidst the US–China trade war and now the pandemic.
Furthermore, our net FDI or foreign direct investments went up from 41% as of July to 47% last August. Actually this has been going on for four consecutive months already. The country is also lining up the production of 10 new vehicle models even in the midst of the pandemic. And in DTI we recorded a 4% increase in the number of business names registered for the first eight months compared to the full year of 2019. In fact, for online businesses registered, it leapfrogged from 1.700 in March to around 86.000 by December. This is a clear indication of the adaptability of Filipinos in challenging times.
Investment approvals registered by the Philippine Board of Investments is on track to hit again another record breaking year of Php1.14 trillion and it might be probably the first or the second highest mark in the agency’s history. For the first three quarters of 2020, investment approvals reached US$15 billion. Our PEZA has also registered a 43% increase in investments in our export oriented IT, BPO industry. There are still 90 notable investment leads with high probability of completion valued at US$24.1 billion and expected to generate 134,000 jobs. There are also 73 target investment leads that DTI will invite directly and aggressively. This will be investors coming from the US, Malaysia, Japan, China, Taiwan and Europe.
We would also like to point out that the Philippines has recently risen in the Global Innovation Index that is the GII 2020 to 50th position out of 131 countries from 54th position in 2019. This is the first time that the Philippines has reached the top 50. Just recently, our country got a much–needed boost as we ranked among the safest economies in the world. The Philippines placed 12th among the 50 countries based on the highly respected Gallup’s 2020 Global Law and Order report. It is worth noting that we are on the same level as Australia and New Zealand. As such, foreign investors would surely take notice of this development and take advantage of potential opportunities in the country.
We look forward to the virus being contained along with our fiscal support reawakening to revitalize and bolster our economy as we promote our country in the face of global recovery, we can tap the emerging opportunities and challenges from shifting trade and investment preferences and changing forms of international production.
This will be made possible as we continue to fast track our industrial strategies with reskilling and upskilling of our work force along with adapting new technologies with more resilient, inclusive and sustainable effort, we are gearing up for a dramatic recovery next year.
Our ultimate goal is that with your support our country’s economic growth story will continue even better in a post COVID future. Through the jobs and employment generated by businesses and investments, our people can gain a better and more comfortable quality of life as promised by our President Rodrigo Roa Duterte.
We are very confident that the launch of the “Make it Happen Philippines” Campaign will relay a clear message across the world that the Philippines is dynamic, agile and resilient. Now, more than ever, we are ready to roll up our sleeves and make things happen. Thank you very much and let’s make it happen in the Philippines. Maraming salamat po.