Economist: Philippines to jump from 'pussycat' to trillion-dollar 'tiger economy'

MANILA, Philippines - The Philippines is set to become a trillion-dollar tiger economy by 2030 with its capacity to post long-term economic growth, Rajiv Biswas, Asia-Pacific chief economist for global information company IHS said.

"The (Philippine) economy has undergone a remarkable transition from a pussycat into a tiger economy over the last decade. However, sustained rapid growth will require continued economic reforms to improve the business climate of the Philippines, making it more attractive for foreign direct investment into sectors such as manufacturing and tourism," Biswas said.

According to IHS forecasts, the total gross domestic product (GDP) per person in the Philippines will jump from about $2,800 this year to $5,800 by 2024. Biswas said the country can post around 4.5 to 5 percent GDP growth from 2016 to 2030.

"This has considerable implications for the size of the Philippines consumer economy. These significant increases in per capita GDP will create one of ASEAN’s (Association of Southeast Asian Nations) largest consumer markets of the future, as the middle class rapidly expands over time," he said.

Biswas said the growth drivers for the Philippines include the "rapidly growing technology-business process outsourcing (IT-BPO) sector and the strong flow of remittances from Filipino workers abroad." The IT-BPO sector posted $13.3 billion from 2008 to 2013, while remittances soared to $25 billion last year.

Future growth, however, is also dependent on the manufacturing sector, which should be made more competitive through the mobilization of foreign and domestic investment flows, he said.

Biswas said the Philippines also faces economic development challenges, such as poverty and unemployment which remain very high. About 28 percent of the population is still living in poverty, while more than 10 million members of the workforce are either unemployed or underemployed. He said about 1.1 million new workers are expected to join the labor force by 2016.

Biswas's analysis comes ahead of the World Economic Forum in Manila, which will take place from May 21 to 23.