The Philippines is the only country in Southeast Asia that is enjoying a surplus in trade in services, according to the Economic Insight: South East Asia report of the Institute of Chartered Accountants in England and Wales (Icaew).
But the report, based on the study conducted by the Center for Economics and Business Research (CEBR), noted that the Philippines failed to take advantage of such growth in intra-Asean tourism.
“The Philippines exports services worth 8 percent of GDP [gross domestic products], whilst importing services worth 6 percent—meaning there is a 2-percent surplus. Of other Asean members, even Singapore, with its strength in financial and business services and as a logistics hub, has a services deficit of 1 percent of GDP,” the report said.
Icaew said the large English-speaking population and low wages in the Philippines helped the country emerge as the only Southeast nation with a services-trade surplus.
However, Icaew said the country still lags behind when it comes to one of the biggest growth industries in the region —intra-regional travel.
The group said intra-regional travel went up almost 35 percent since 2007 for Asean as a whole.
For the Philippines, however, only 8 percent of its total foreign arrivals are from its neighboring Asean countries.
“The increased wealth of countries like Indonesia has increased visitor numbers and tourist dollars to places like Singapore, as well as newer destinations like Laos. Laos, in comparison, gets 80 percent of its tourism from other Asean members, predominantly from Singapore,” Icaew said.
The Economic Insight: South East Asia provides Icaew’s 140,000 members with a current snapshot of the region’s economic performance. The report undertakes a quarterly review of Southeast Asian economies, with a focus on the five largest countries; Indonesia, Malaysia, the Philippines, Singapore and Thailand.
According to the report, political stability in the Philippines is boosting consumer confidence and promoting a positive outlook for the private sector.
“With consumption up, inflation remaining moderate and low interest rates bolstering investment, the country is on track for growth of 5.2 percent in 2013 and 5.5 percent in 2014,” the report said.
Douglas McWilliams, Icaew economic advisor and CEBR’s chief executive, said that while growth in the global economy remains lackluster, Southeast Asian nations find themselves in an “economic sweet spot of manageable inflation, moderate interest rates, and rising prosperity feeding through to increasing household consumption.”
“The Philippines is benefiting from this and, barring unexpected shocks, is on track for solid growth compared to global figures. However, it is not currently in a position to benefit fully from one major success story for the region: tourism. Whereas numbers of visitors both from within Asean are important in Southeast Asia, visitor numbers to the Philippines currently remain low. But the good news is that a low fiscal deficit should enable the government to implement ambitious investment plans, and with good governance and prudent allocation of resources we would expect to see the country embracing greater prosperity alongside its neighbors before long,” he said.
Mark Billington, regional director, Icaew Southeast Asia, said: “As Asean economies continue to grow, it is beginning to play a larger and more pivotal role in the global economy and marketplace. With the increased purchasing power from a rapidly growing middle class, the region will become one of the most dynamic parts of the world.” –Max V. de Leon | Reporter, Businessmirror
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