The Philippine government should increase investment in infrastructure so the country can cash in on the booming Asian trade, according to the head of an investment company.
“China overtaking Japan as the world’s second top economy will result in a very busy decade for the Philippines as its trade with Asia’s tiger economy will definitely swell due to (higher) consumption,” First Metro Investment Corp chair Francisco Sebastian told delegates to the recent Supply Chain Management Association of the Philippines conference and exhibition.
“Globalization, new world order and the Asia factor are the global megatrends right now and the Philippines is sitting right at the heart of it,” he said. “These megatrends have allowed for faster and freer movement of goods, capital, and people making it very ripe for the Philippines (to attract) infrastructure investment as almost all barriers are down.”
Describing Asia as the “growth center of the world”, Sebastian said growth for such countries as Malaysia, Vietnam and the Philippines will be anchored on domestic consumption.
The Philippine government’s under spending on infrastructure projects has, however, cramped the country’s growth potentials, he added.
Manila is underspending by as much as 50% compared to last year as well as during the Macapagal-Arroyo administration. The Department of Public Works and Highways alone has cut spending by more than half, pointed out Sebastian.
But he said he isn’t worried about lower gross domestic product growth in the second quarter of 3.4% from the previous quarter’s 4.6% since he expects a rebound in the third and fourth quarters.
Sebastian said “the key would be increased government spending… the lack of growth in the first half is attributable to government’s under spending.”
Photo by dodongflores
