Finance Secretary Ralph G. Recto has successfully pitched the Philippines as an attractive investment hub, gathering strong interest from American investors during the Philippine Dialogue held on April 17, 2024 at The Ritz-Carlton in Washington, D.C.

“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,” he said in his keynote speech.

In his presentation, the Finance Chief made a strong case before American investors on the compelling reasons why they should continue expanding their operations in the country.

Among these is the Philippines’ promising growth trajectory with the country holding the status of being the fastest-growing economy in ASEAN and soon to be one of the largest economies in the world.

Despite external headwinds, the Philippines expanded by an average of 6.6% during President Ferdinand R. Marcos, Jr.’s term.

Multilateral organizations affirm the strength of the Philippine economy projecting it to remain a frontrunner in the region with a projected growth of 5.8% to 6.3% in 2024.

Furthermore, international research organizations forecast that the Philippines will join the ranks of the world’s top 20 largest economies by mid-century.

Specifically, Goldman Sachs projects the Philippines to be the 14th largest economy globally by 2075, outpacing France.

The Finance Secretary attributes the country’s promising growth trajectory to 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,” he said.

The largest portion of the Philippine workforce is engaged in formal and stable work, with 62.5% of the total employed individuals in 2023 belonging to the wage and salary group–an indication of a strong and growing middle class.

Secretary Recto also highlighted the country’s strong domestic market which offers a huge capacity for enterprises to thrive.

By 2025, the Philippines is expected to become an upper middle-income country, which means having a gross national income (GNI) per capita income range of USD 4,466 to USD 13,845.

The country is also expected to become the world’s 13th-largest consumer market by 2030 with a whopping 79 million consumers. By then, more than two-thirds of the Filipino population will spend more than USD 11 daily.

Meanwhile, the Finance Chief pointed out that the government’s strong commitment to prudent fiscal management ensures stability for business.

The country boasts a growth-enhancing fiscal consolidation plan which ensures that the economy will continue to outgrow its debt over the medium term.

Due to its adherence to fiscal discipline and prudent debt management, credit rating agencies continue to affirm the Philippines’ high credit ratings, which is a strong vote of confidence in its sound fiscal and economic policies.

Apart from these, Secretary Recto said bringing further business stability is the country’s stable political environment with a decisive President whose foreign policy 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,” he stressed.

Under President Marcos, Jr.’s leadership, the government rolled out a red carpet of pro-business policies to welcome investors into the country with open arms.

The Philippines has significantly improved regulations to strengthen public-private partnerships, lowered the minimum paid-up capital requirement for foreign corporations and enabled full foreign ownership in public services and renewable energy projects.

The President also institutionalized green lanes for strategic investments which is a whole-of-government approach to streamline approval and registration processes as well as address investor concerns.

Additionally, there are ongoing refinements to the country’s fiscal incentives framework that aim to tailor incentives to specific needs and address investor concerns.

These policies are complemented by the competitive advantage offered by the country’s demographic sweet spot.

With the Philippines’ very young and well-educated population (median age of 25) which stands in contrast to the US aging population (median age of 38), Secretary Recto also broached a proposal for the two countries to become demographic partners.

“Our young, tech-savvy, English-speaking workforce certainly complements the US’ forward-thinking businesses,” he stressed.

The country’s economic managers composed of Secretary Recto, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan, and Department of Budget and Management (DBM) Secretary Amenah F. Pangandaman were in full force in engaging the American investors in an in-depth panel discussion to further discuss investment opportunities in the Philippines. They were joined by Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco G. Dakila, Jr.

In particular, HSBC Public Sector Banking Chairman of the Global Banking and Markets Michael Ellam recognized the Philippines’ comprehensive and decisive reform agenda, which has made it resilient despite global headwinds.

“I think the test really of an economy is not so much how it performs in good times, but how it deals with some of the big challenges. And I think the proof that we’ve seen recently of the resilience and the underlying strength of the Philippines economy is, I think, certainly leaves us very excited about how well positioned it is to take advantage of some of these bigger trends that we’re seeing in the global economy,” he said.

Several American investors who have ongoing investments in the Philippines came forward to express their desire to expand their operations in the country and gave support to the government’s plans to further improve the ease of doing business.

“We currently have 12 hotels across six brands, but we’re expanding rapidly in the Philippines. And in our current signed pipeline, we have 16 new hotels. We’re planning to more than double our presence currently, which is just a very exciting time,” a Marriott International official said.

“Firstly, I’d like to express our enthusiasm for the investment environment in the Philippines. We have a very large workforce footprint there, doing high-technology jobs. I was pleased to hear the comments from the budget secretary about increased investment in digitalization,” an IBM executive said.

“We’re making a great investment in skills in the Philippines in partnership with DOLE, the labor authority, and TESDA, the technical education authority, and we’d like to see the government continue to focus on that area so we can continue to expand technology jobs in the Philippines,” the executive added.

“It’s been an incredible partnership with your government and we’re thrilled with the announcement of the Luzon Corridor during the trilateral leaders summit last week. We look forward to engagement with a range of other government and private sector partners,” an official from the Partnership for Global Infrastructure and Investment remarked.

“We at Citi are proud to be a partner to the government, to the Philippine community. You know, we’ve been on the ground and continue to grow and prosper and we bring our clients and connect with our clients in the Philippines every day,” Citi Corporate & Investment Banking Vice Chairman Jay Collins said.

“Visit the Department of Finance, we will do hand holding, make it easy for you to do business, and make it profitable for you to invest in the Philippines. There is predictability, stability, and sustainability,” Secretary Recto assured investors in closing.

The Philippine Dialogue built on the progress made during the recently concluded Philippines-US-Japan Trilateral Summit.

It was attended by around 90 executives from US-based funds and corporations, multilateral institutions, and the public sector.

Among the guests were Philippine Ambassador to the US Jose Manuel Romualdez and House Speaker Ferdinand Martin Romualdez.

It was jointly organized by the Bangko Sentral ng Pilipinas (BSP) and the Department of Finance (DOF) in partnership with the BofA Securities, Citi, HSBC, J.P. Morgan, Morgan Stanley, Standard Chartered Bank, UBS, and the Philippine Embassy in Washington, D.C.