London-based HSBC, one of the biggest financial institutions in the world, expects gross domestic product (GDP) in the Philippines to grow between three and four percent next year.
HSBC president and chief executive officer for the Philippines Mark Watkinson said the key factors that would drive the modest growth in 2009 are the business process outsourcing (BPO), services, remittances of overseas Filipinos and the tourism sector.
“If the Philippines grows by three to four percent next year, that would be very good,” Watkinson said yesterday, adding that HSBC is prepared for modest growth amid the adverse financial crisis.
The domestic economy is expected to grow between four to 4.6 percent this year and between 3.7 to 4.7 percent in 2009, based on official government forecasts, coming off a strong 7.2-percent growth last year, the fastest pace in 30 years.
The World Bank earlier revised downward its growth projections for the Philippines at between three to 3.5 percent in 2009, while the Asian Development Bank (ADB) placed it at less than four percent.
Meanwhile, remittances hit $14.4 billion last year and is expected to breach $16 billion this year. Money coming from overseas Filipinos fuels personal consumption, stimulates employment, and develops and expands small and medium businesses.
As remittances account for roughly 10 percent of GDP, more than 40 percent of the country’s population are benefiting from these inflows.
The Philippines is the third largest beneficiary of remittances after Mexico and China.
Likewise, the BPO sector is expected to benefit from the poor economic conditions of major economies like in most of Europe and the United States.
HSBC itself hosts two BPO centers in the Philippines employing over 5,000 individuals.
Watkinson said it is highly possible they will employ another 1,000 next year. One BPO center is fully operational and within capacity is in Alabang, while the Quezon City center can still accommodate another 1,000 seats.
“It becomes even more economical and practical that the major economies will look towards outsourcing, and the Philippines has the edge over India,” he said. “The next two years will definitely be rosy for the sector.” –Ted P. Torres, Philippine Star
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