According to the National Economic and Development Authority, the Philippine economy will hit its targets for 2023, given the continued growth of the gross domestic product and inflow of foreign direct investment.
Meanwhile, the Philippine Economic Zone Authority is also confident it will reach its year-end target of $2.72 billion in new investments following the signing of a free trade agreement with South Korea earlier this year. The Department of Trade and Industry is forecasting that the country will record the second-highest FDI in the ASEAN region by 2028.
The economic rebound following the devastating effects brought about by the COVID pandemic is attributed to the strong performance of the aviation, business processing outsourcing, digital innovation, and professional services sectors, as well as the leadership of local government units, special economic zones, and state-owned enterprises.
Germany’s Lufthansa Technik Philippines, an aircraft maintenance, repair, and overhaul joint venture established with Philippine-owned MacroAsia Corp. in 2000, has reported positive results this year following a predictable downturn in 2020.
LTP President and CEO Elmar Lutter is bullish on the Philippines and, following its recent $40 million expansion, is confident the country provides his company more advantages amid tight competition with China.
“China has been the workshop of the world for the past decades. Similarly, many airlines bring their aircraft to China for heavy maintenance. However, a realignment is underway. Supply chain managers look for alternatives from single sources,” Lutter said.
“We believe that the Philippines is quite well positioned strategically, especially in the aviation sector where the smallest details matter and flexibility could spell the difference between on-time or delayed redelivery. Our business partners work with Filipino mechanics who are fluent in English, master the manual and intellectual skills required on the aircraft like no one else, and culturally have a natural inclination towards customer service,” Lutter added.
Amid the optimism, it looks like people are voting with their feet, so to speak. According to the Bureau of Immigration, the country welcomed more than 1.55 million tourists and long-term visitors from the United States, South Korea, Australia, Canada, and Japan last year.
Identifying a need to assist visitors with visa extension and immigration requirements, Filipino entrepreneur JR Coca opened JRC Visa Consultancy and Immigration Services in Cebu City, the main economic center in the central Philippines. “We are one of the silver linings of the COVID-19 pandemic. Because of the restrictions, we were able to navigate the applications of our clients, who were locked down in a particular place. We processed the applications here in Cebu and Manila. We grew from an initial two branches to seven branches. The majority of our clients, between 70% and 80%, come from the U.S.,” Coca said.
At the height of the pandemic in 2020, the Internet economy in the Philippines was estimated to be worth $7.5 billion. It is expected to grow by 30 percent annually to reach $28 billion by 2025.
A long-time contributor of foreign direct investment to the economy, the Business Processing Outsourcing industry created 1.3 million jobs and accounted for 9% of the Philippines’ GDP in 2022. Some BPOs in the country have transitioned to higher-value services with the emergence of Knowledge Processing Outsourcing.
“The companies who do business with Flat Planet are looking for back office, non-voice, high-value tasks, but also require their workforce to have a sense of personal dignity in the workplace,” said Flat Planet Philippines CEO and Managing Director Chris Moriarty.
“It’s not the classic Filipino BPO job wherein we hire a low-cost fresh graduate straight out of college to perform simple repetitive tasks. We hire highly skilled Filipinos who would go abroad because the jobs that they need don’t exist in the Philippines but would prefer to stay home. Flat Planet tries to create a pathway that allows people to live in the Philippines with their families, stay in their community, and still have access to a high-value job,” Moriarty added.
Another example of the global competitiveness of the Filipino workforce is Manila HealthTek Inc., a biotech research and development laboratory founded by Dr. Raul Destura, who returned to the Philippines after several years of studies and research work in the United States.
“During the height of the pandemic, Manila HealthTek was the first home-grown Filipino company to develop a diagnostic test kit for COVID-19 detection. To have completed a fully functional test kit in record time was a proud moment in Manila Healthek’s history, seeing that a small company like ours has a role to play in nation-building and in helping the country bounce back,” said Destura, the company’s CEO.
Apart from the COVID test kits, Manila HealthTek also developed tests for infections prevalent in the country, like those caused by Leptospira, Salmonella, and Schistosoma.
Destura, who is also the deputy director of the Philippine Genome Center at the University of the Philippines, said Manila Healthtek’s mission is to improve the quality of life of lower and middle-income Filipinos by making test kits affordable.
Beyond the nation’s capital, some local government leaders are adopting ideas that are aimed to boost economic growth and reduce poverty. More than 200 km north of Manila, the province of Pangasinan hopes to become Northern Luzon’s largest consumer market and a model for sustainable urban development.
To achieve that objective, Pangasinan Gov. Ramon V. Guico III plans to roll out a bus scheme that will be a viable, profitable and sustainable mass transportation system.
“We want to implement a ‘hop on-hop off’ bus transport system with one terminal in Manila. Just like when riding a train in Europe, one uses an app (to book), except that you’re going to use an electric bus. There will be organized intermodal transport terminals, wherein you can hop on in one station and ride one line, then hop off and catch another line to reach your destination,” Guico explained.
“We’re going to organize this and key players in the transport industry would like to be part of it. This transportation model can be followed by other provinces,” the governor added.
With financial assistance from the World Bank, the province will open a milkfish (bangus) breeding and hatchery facility, which will produce more than 100 million bangus fry and more than 48 million larvae every year. The big-ticket project is expected to benefit around 39,399 fisherfolk and 63 nursery operators in the province, which accounts for around 28% of bangus production in the country.
To boost tourism, the governor also launched several projects, including building a reflecting pool and interactive fountain in the capitol compound. In September, he also inaugurated Banaan, the province’s first museum, which is located at the historic Casa Real, the old provincial seat.
With nine campuses across the province, Pangasinan State University has cemented the province’s reputation as the leading education center in northern Luzon. The public university, established in 1974, offers basic and secondary education, college and post-graduate degrees, and open university programs.
Meanwhile, the National Development Company is tasked to spur industrial development and drive economic growth through investments by investing in various commercial and industrial ventures.
Recently, NDC partnered with the Department of Trade and Industry to provide equity financing options and support to qualified startup businesses through the Startup Venture Fund, which aims to boost the thriving local startup ecosystem.
“The NDC historically has engaged big business and the agricultural industry. Now, however, we are trying to look at the tech base, innovation, and more startup businesses that are forward-thinking. That’s very much the type of joint venture for our future investments,” said NDC General Manager Anton Mauricio.