An Optimist’s Guide to 2017
By Joseph F. Nacino
For 2017, we could either be people who see the glass as half-empty—or half-full.
Fortunately, there are some bright spots that the coming year won’t be so bad in the Philippines despite the political rumblings both inside and outside the country.
Continued GDP Growth
The Asian Development Bank (ADB) predicts that our Gross Domestic Product (GDP) for 2017 will hit 6.4 percent instead of 6.2 percent as they predicted last year. This is due to stronger GDP results last year as a result of robust domestic demand that pushed the GDP growth to hit 7.0 percent year-on-year in the first three quarters. HSBC’s prediction is similar–up to 6.5 percent from 6.3 percent.
In relation to above, the Association of Southeast Asian Nations (ASEAN) will be holding their 2017 Summit in the Philippines. This is important to consider as the combined GDP of the 10-member ASEAN is expected to hit 4.6 percent for this year, equivalent to US$2.6 trillion. This is higher than those expected for India (US$2.4 trillion), UK (US$2.4 trillion), France (US$2.3 trillion), and Russia (US$1.5 trillion).
Relative Stability of Currency
Though the Philippine peso isn’t expected to do well in 2017, take heart in the fact that Asian currencies across the board aren’t expected to do as well against the US dollar, including China’s yuan. The yuan is expected to weaken by four percent for 2017, but the Philippine peso is predicted to depreciate by only three percent. Analysts surveyed by Bloomberg estimated that the peso would probably hit a median of 50.8 by the end of this year and no further.
High Investment Grade in the Region
Though the international ratings agency S&P doesn’t foresee any improvement in the Philippines’ ratings within the next two years, they did affirm the country’s investment-grade BBB/A-2 ratings with a stable outlook among the region.
Booming Real Estate
Meanwhile, real estate will also benefit from the projected economic growth—especially if the Duterte administration fulfills their infrastructure plans. The global real estate services provider Colliers International Philippines foresees that the BPO industry will be driving the office space market into Cebu, Bacolod, Iloilo, Pampanga, and Davao as they look for alternative areas. This is because the IT and Business Process Association of the Philippines (IBPAP) sees a compound annual growth rate (CAGR) of eight percent in full time employees.
Expansion of Office Space Market
Related to above, Colliers also foresees offshore gaming to want a part of the action in the office space market. This is because the Philippine Amusement and Gaming Corp. (Pagcor)’s recent launch of the Philippine Off-shore Gaming Operation (Pogo) had an initial release of 25 licenses and more to follow. Expect more to follow City of Dreams, Okada, and Solaire into the country.
Rise of PSE
Likewise, with the projected economic growth and if the Duterte administration’s proposed comprehensive tax reform package pushes through, analysts foresee the Philippine Stock Exchange climbing back to the 8,000-level.
2017 is Our Year
Lastly, don’t worry: IBM Watson figures 2017 is going to be the Philippines’ time to shine with a number of infrastructure investments interested in our country despite the political turmoil we’re experiencing. So there’s hope!
So the next time you get the blues over reading the news, cheer up! There’s always the proverbial silver lining in the clouds.
What other things can we be optimistic about this year? Share them with us below!