Secretary of Finance
April 17, 2024
Fellow workers in government, our partner banks, friends in the US, ladies and gentlemen: good morning.
Thank you for investing your time in this dialogue.
I am very eager to share with you the Philippines’ promising growth story and how the United States can actively be part of this journey.
Over the years, the US has been our stalwart ally. It has supported us in strengthening national security and provided investments and development programs that uplifted the lives of Filipinos.
There is definitely huge headroom for our economic partnership to grow more extensively over the coming years.
So, allow me to underscore the compelling reasons why expanding in the Philippines is the most strategic move US investors can make.
First, you are teaming up with the fastest-growing economy in ASEAN and soon-to-be one of the largest economies in the world.
While global prospects remain clouded with uncertainties brought by geopolitical tensions, there is one area of consensus among economists: the Philippines is set to lead growth over the next decades.
Our economic numbers point in that direction.
Under President Marcos, Jr.’s term, the Philippines grew the fastest in the ASEAN despite external challenges, expanding by 6.6 percent.
Multilateral organizations validate the vigor of our economy. They expect us to remain a frontrunner in ASEAN with a projected growth of 5.8 percent to 6.3 percent in 2024.
Our own projections show that we can grow by 6 to 7 percent this year, and even higher at 6.5 to 7.5 percent in 2025.
International research firms also attest to our economic strength. They project the Philippines to join the ranks of the world’s top 20 biggest economies by mid-century.
And fast forward to 2075, Goldman Sachs forecasts the Philippines to become the 14th largest economy worldwide, outpacing France.
Our optimism about reaching—and even surpassing these projections is fueled by favorable factors.
Our growth trajectory is being driven by strong domestic consumption, which is a robust shield against external factors contributing to the global economic slowdown.
This strong consumer spending, which continues to account for more than 70 percent of the economy, is being supported by a vibrant labor market.
The largest portion of our workforce is engaged in formal and stable work. This is an indication of a strong and growing middle class.
As the Philippines heads towards becoming an upper-middle-income country next year and the world’s 13th largest consumer market by 2030, our domestic market offers a huge capacity for enterprises to thrive.
Meanwhile, the robust remittance inflows from our overseas Filipino workforce also help sustain domestic consumer demand.
The strong rebound of our tourism industry as reflected by the rising tourism receipts, and the hefty BPO export revenues give us confidence that we have ample buffers against external headwinds.
These, along with our low external debt and healthy reserves that exceed standard benchmarks, should keep our currency stable and resilient to adverse external shocks.
Our growth is further bolstered by an inflation rate that is well under control.
The Philippine central bank has remained vigilant in ensuring that inflation expectations are well-anchored through monetary policy.
Meanwhile, in the executive branch, we are adopting a whole-of-government approach to reduce inflationary risks brought about by geopolitical tensions.
Another reason why investing in the Philippines is the best move is our commitment to ensuring business stability through prudent fiscal management.
Our fiscal performance remains on solid footing and on track with our growth-enhancing fiscal consolidation plan dubbed as the Medium-Term Fiscal Framework.
In 2023, our fiscal deficit continued to narrow down to 6.2 percent of GDP from its peak of 8.6 percent at the height of the pandemic.
This is projected to gradually decrease in a sustainable and strategically paced manner over the medium term.
The narrowing deficit path is attributed to the consistently higher government revenue collections and improved expenditure management, which prioritizes massive infrastructure projects and social services.
Meanwhile, our debt is on a sustained downward trajectory with the majority of financing sourced internally to take advantage of high liquidity in the domestic economy.
In 2023, our debt-to-GDP ratio further dropped to 60.1 percent from its peak of 60.9 percent in 2022.
We are on track to bring this ratio down further to less than 60 percent by 2028, well below the internationally accepted threshold of 70 percent.
Our fiscal consolidation plan ensures that the economy will continue to outgrow our debt in the medium term.
The Philippines’ high credit ratings summarize all our efforts in exercising fiscal discipline and prudent debt management.
This is a strong vote of confidence in our sound fiscal and economic policies.
Meanwhile, we have a President with decisive political leadership and a foreign policy that is friendly, independent, and peace-oriented.
President Marcos, Jr. has been actively engaging with leaders around the world to strengthen ties and form alliances aimed at boosting economic security, which is a key aspect of ensuring national security.
In fact, he was just here last week for a historic trilateral meeting with US President Joe Biden and Japanese Prime Minister Fumio Kishida to enhance peace, security, and investment cooperation in the Indo-Pacific region.
Under President Marcos, Jr.’s guidance, the Philippine government has also rolled out a red carpet of pro-business policies to welcome investors with open arms.
Private sector participation is now made faster and easier with the recent enactment of the Public-Private Partnership Code.
This provides a stable, predictable, and competitive environment where high-quality PPP investments can thrive.
We offer an enticing menu of investment prospects for PPPs under the President’s Build Better More program, featuring 185 big-ticket infrastructure projects worth 161 billion US dollars.
The Ninoy Aquino International Airport PPP Project—the administration’s largest PPP endeavor to date—is a crowning testament to how quickly and efficiently the Philippine government acts on investments.
We evaluated the proposal to rehabilitate our country’s primary international gateway in just six weeks––the fastest approved PPP project in Philippine history.
The private sector consortium for the project was selected seamlessly through a transparent and competitive bidding process.
Rest assured, you can expect nothing less than the same speed and efficient handling of your investments when you partner with us.
The Maharlika Investment Fund, our first sovereign wealth fund, also presents an ideal platform for private-sector engagement in financing our flagship infrastructure projects.
Meanwhile, the Philippines is now open to full foreign ownership of renewable energy projects. This will help unlock the vast potential of the country’s mineral sector valued at 6 trillion US dollars.
We also now allow full foreign ownership in public services like telecommunications, airports, and shipping. And we have lowered the minimum paid-up capital requirement for foreign corporations.
Furthermore, the President institutionalized green lanes for strategic investments. This is a whole-of-government approach to streamline approval and registration processes as well as address investor concerns.
On top of these, we are currently refining the country’s fiscal incentives system to further tailor fit incentives and attract more international enterprises.
Another critical factor that makes us more advantageous and globally competitive is our very young and well-educated population.
The Philippines enjoys a demographic sweet spot with a median age population of 25 years old. This stands in stark contrast to the aging populations of our neighbors and developed countries, like the US, whose median age is 38.
This sweet spot provides an opportunity for the Philippines and the US to become demographic partners.
Our young, tech-savvy, English-speaking workforce certainly complements the US’ forward-thinking businesses.
And as we rapidly invest in physical infrastructure, we equally prioritize the development of our human capital.
Our law ensures free basic education for all Filipinos and we have extended this privilege to students enrolled in state colleges and universities. This will ensure that our workforce is among the best and the brightest in the world.
And while we rank as the best-performing economy in ASEAN, growth is not the final goal of all our efforts.
We seek a more dynamic and competitive economy to cut the poverty rate to a single digit, or 9 percent by 2028. This means lifting 14 million Filipinos out of poverty.
The reward for all our hard work is to create more opportunities to provide a comfortable life for every Filipino.
With this, we eagerly look forward to the US becoming a key player in realizing our development goals by strengthening our long-standing alliance with more forward-looking business partnerships.
I invite all of you to join us in building an economy that will allow the Filipino people’s many talents to blossom and secure a better future for our children.
Thank you and Mabuhay po ang Pilipinas.
