The Philippine economy may grow 80 percent larger within nine years as anti-corruption efforts build momentum and translate into greater foreign direct investment inflows, according to DBS Group.
In a research titled "Asia 2020," the Singapore-based financial service group said that over the coming decade, economic growth will be respectable and trending toward 6 percent.
Such growth will depend much "on policy and whether the large labor pool and resource endowment—which include gold, nickel and copper—can be effectively tapped upon," the paper said.
"We hold a cautiously optimistic view of the economy and expect reform to proceed at a moderate rate," DBS added. "By 2020, GDP will (in today's dollars) likely be 80 percent larger, and income levels 45 percent higher than at present."
The group said that the Aquino administration has so far done a credible job in introducing reforms focused on fiscal discipline and public-private partnership (PPP) on infrastructure investments as well as population management and anti-corruption reforms.
Amid criticism that the government is not spending enough, Malacañang has limited deficit-spending to ₱34.5 Billion in the eight months to August, or about a seventh of the ₱228.1 Billion recorded in the same period of 2010.
Also, Malacañang expects to auction off the first of big-ticket PPP projects before yearend.
"A new structure for project approvals and implementation is being established, which should complement the launch of PPP projects," DBS said. "Measures to counter corruption should raise investor confidence."
DBS noted that the savings rate has grown to 18 percent from 11 percent in 2004 adding that investment is beginning to follow the same path and that GDP should follow.
"In short, the reform momentum is building, and this should translate into greater FDI inflows and complement the rising domestic savings rate already apparent in the data.
Further, DBS said the country's young population could prove to be an advantage although the still-high birth rate remains a challenge, with an additional 19 million people seen within the next nine years.
"To some extent, resources have been spent in accommodating a rise in population at the expense of other investment, and this may have impeded GDP growth," DBS said.
PUPTF – Petroleum Task Force Mining Exploration
As the Aquino administration is poised to bet heavily in developing the country's oil and gas resources, an inter-agency task force has been created by Malacanang to oversee government approvals on upstream petroleum investments.
Under Executive Order No. 60 signed by President Aquino last September 30, 2011 it has been stipulated that the inter-agency Philippine Upstream Petroleum Task Force (PUPTF) will primarily watch over the implementation processes for the $1.0 billion fresh batch of investment for the Malampaya gas field project.
The EO creating the new task force basically amended Executive Order No. 254 which was the underpinning policy for oil and gas developments since 1995.
"It is in the interest of the Philippine government that projects such as the Malampaya Phases 2 and 3 are executed with no harm to people and the environment, with minimum disruption to the power supply of Luzon, and completed on time and within budget," the EO has emphasized.
The task force has to be chaired by Energy Secretary Rene D. Almendras and the membership will be completed by 17 more representatives from various government agencies. They shall include Executive Secretary Paquito Ochoa, Department of Transportation Secretary Manuel Roxas; Finance Secretary Cesar Purisima and Justice Secretary Leila De Lima, among others.
Aside from the Malampaya venture, the task force will also keep an eye on the new 15 petroleum blocks due to be auctioned by the Department of Energy (DoE) toward the end of this year.
Fundamentally, the role of PUPTF will be to "review, simplify and streamline the applicable rules, regulations and procedures" in upstream project implementations. These shall rope in "the efficient deployment of personnel, vessels, machinery, equipment, spare parts and materials to be used in petroleum operations."
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