Trade liberalization to boost bpo, tourism, banking sectors, Asean integration to further fuel Philippine growth – HSBC

MANILA, Philippines - The Hongkong and Shanghai Banking Corp. Ltd. (HSBC) expects the integration of Southeast Asian economies would help sustain the 67 consecutive quarters of economic expansion in the Philippines.  

“We see more trade and investment opportunities for Philippines with the integration of Asean, as the dynamic growth of the region and the rising affluence in this economy will fuel demand,” said Jayant Rikhye, the bank’s Asia Pacific head of international markets. 

Rikhye, who is also HSBC’s head of Asia Pacific strategy and planning, explained the launch of the Association of Southeast Asian Nations (Asean) Economic Community (AEC) would be a key driver for prosperity in the region. 

“The creation of the AEC is a milestone for the 10 nations it unites,” he said.

“It sweeps away internal barriers to business growth and wealth creation, setting the stage for the economies in the Asean to enjoy a new era of development and shared prosperity,” he added. 

Specifically, trade liberalization should help the Philippines’ outsourcing and tourism industries, with easier access to banking services also a major plus.

Rising incomes would also mean more demand for retail banking, savings, insurance and asset management services, he said.

“Buoyant economic growth and increasing trade and investment flows mean more demand for commercial banking, trade financing, and investment banking services,” Rikhye explained. 

The Philippines has been on a growth trajectory since the first quarter of 1999, recording  67 straight quarters of economic expansion, including one during the global financial crisis in 2008.

Wick Veloso, president and chief executive officer of HSBC in the Philippines, said the local economy’s strong growth despite a challenging global and macroeconomic backdrop in 2016 makes the Philippines an attractive market.  

“This is what makes the economy attractive to internationally focused companies and to HSBC. This is an opportunity that we must embrace. Now is the time to be ambitious and build for the future,” Veloso said. 

The country’s gross domestic product (GDP) growth accelerated to six percent in the third quarter from the revised 5.8 percent in the previous three months. The uptick was also faster than the 5.5 percent in the same quarter last year, thanks to robust government and private consumption.  

The robust growth in the third quarter brought the GDP expansion to 5.6 percent in the first three quarters of the year, down from 7.1 percent last year. 

Economic managers have targeted a GDP growth of between seven and eight percent this year. The economy grew 6.1 percent in 2014. 

However, officials have given up on the target saying the country’s economic expansion would settle between six percent and 6.5 percent this year.