Duterte Dragging Feet Over Economic Policy

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Investors are waiting for new Philippines president Rodrigo Duterte to unveil the details of his economic policies.

The hope is his new minister will boost growth close to 10% a year.

The Philippines is regarded as a rising star in improving Asian pacific economies.

A recent report from SooHai Lin, an investment managing specialising in the Asia Pacific for Barings, explains that businesses and markets in the Philippines are hoping he appoints the right team to take the economy onwards and upwards.

“A credible team will see solid growth continue, leading to more jobs, higher incomes and improving consumption,” he said.

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Dynamic reshaping of markets

SooHai argues that the Philippines and other ASEAN countries are picking up where China left off by delivering strong economic growth and increasing personal wealth across all 10 countries signed up to the pact.

“Their dynamics are reshaping the landscape for investors even with the GDP growth of China,” he said.

The latest reports forecast the population of ASEAN group countries will surge to more than 400 million by 2020 and that the member states will need £400 million of infrastructure investment to support more people.

“The Philippines is a place where log-term economic trends should be considered rather than the current short term political issues,” said SooHai Lin.

He points at projects such as Bangkok Dusit Medical Services, in the capital of Thailand as an example.

Nurturing and enabling business

“This is Thailand’s largest private hospital group and offers great care to patients and is filling a gap in the public service,” said SooHai Lin. “The company also benefits from a wealthier middle class who are willing to pay for an improved service over that offered by public hospitals.

“The Philippines has companies in the same situation who can fill gaps in the market by doing their job better than their competitors.

“The new president has to make sure his government nurtures and enables these companies to attract investment and promote growth.”

Until the presidential election earlier this month, The Philippines was contributing 11% of growth to Barings ASEAN Frontiers Fund.

“The Asia Pacific has enough of the right companies to keep on growing regardless of the short-term geopolitical factors, but we would like to see The Philippines progress rather than end up in a cul-de-sac because of the wrong policy or appointments,” said SooHai Lin.

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