Philippines poised to become high-income economy by 2040

MANILA, Philippines - Investments  in infrastructure and human capital could catapult the Philippines into being a high-income economy by 2040 provided succeeding administrations would build on the foundations built by the Aquino government, officials and observers said on Wednesday.

This year’s Philippine Economic Forum takes the theme of “Shaping our Future” with focus on the need to make the country’s strong growth—averaging more than six percent for the past five years—more inclusive.

“It should be a synthesis of growth and continuity. For the Philippines, we were able to maintain growth and continuity even on a difficult operating environment,” central bank Gov. Amando Tetangco Jr. said on his opening remarks.

The country’s prospects remain “very promising,” and the government is still looking at capping the year with six percent growth, still fast when compared in the region, Socio-economic Planning Secretary Arsenio Balisacan said.

But next year’s expansion could hit 7 percent “and if we get this right this time, and this is sustained beyond 2016, we can see per capita income rise to middle-income level,” he explained.

The Philippines could then achieve high-income level status, with per capita income of more than $14,000, by 2040, once the next three administrations achieve 7-percent growth.

As of June this year, gross domestic product (GDP)—or the sum of all products and services created in an economy—increased 5.3 percent, way below the official seven- to eight-percent target this year. GDP per capita indicates the income share of the population in the economy.

“We wish to turn over to the next administration an economy with much stronger fundamentals than what we inherited in 2010,” Balisacan said.

“We are in the process of structural transformation crucial for economic growth and quality jobs,” he added.

Open forums featured in the event tackled how the Philippines could take advantage of its young demography through the use of technology. Infrastructure — a key sticking point for the past five years of the Aquino government—was also raised once again.

A "Dream Plan" submitted by the Japan International Cooperation Agency is now integrated on the country’s economic roadmap and is being implemented, Public Works Secretary Rogelio Singson told the forum.

“So the Dream Plan is no longer a dream. It is now being implemented. We have already started expanding the road networks. There are other projects on it like railways, which we will soon begin,” he said.