Friday, 13 January 2012

PH to become 16th largest economy by 2050

by Roderick T. dela Cruz
Manila Standard

The Philippines will be one of the fastest-growing economies over the next four decades, with its gross domestic product predicted to be the 16th largest in the world by 2050.

Hongkong and Shanghai Banking Corp. Global Research, in a report titled the World in 2050, said the Philippines looks set for a multi-decade run of strong growth to become the world’s 16th largest economy, up 27 places from today and ahead of all other Southeast Asian countries and even rich economies in Europe.

“Asia is the stand-out region—with a notable showing by the Philippines,” the HSBC report said. “The Philippines looks set for a multi-decade run of strong growth.”

From its 2010 status as the world’s 43rd largest economy with a GDP of $112 billion, the Philippines is projected to increase the size of its economy to $1.688 trillion, which will be the 16th largest by 2050.

The Philippines is seen to become the largest economy in Southeast Asia with $1.688 trillion in GDP by 2050, outranking Indonesia ($1.502 trillion), Malaysia ($1.16 trillion) and Thailand ($856 billion).

By 2050, the Philippine economy will also be larger than the likes of Australia, Saudi Arabia, the Netherlands, Switzerland, South Africa, Austria, Sweden, Belgium, Singapore, Greece and Israel.

The report singled out the Philippines as the star performer during the period, “where the combination of strong fundamentals and powerful demographics gives rise to an average growth rate of 7 percent for the coming 40 years.”

It was based on the forecast that the per capita income of the Philippines will rise 6.1 percent annually from 2010 to 2020, 5.6 percent from 2020 to 2030, 5.2 percent from 2030 to 2040, and 4.8 percent from 2040 to 2050.

Per capita income of the Philippines will rise from $1,215 in 2010 to $10,893 while its population will increase from 93 million to 155 million during the period.

“Countries such as the Philippines, Peru and Nigeria all demonstrate some combination of favorable demographics and strong fundamentals that should see a significant rise in their economic size,” it said.

By 2050, China is projected to rise as the largest economy with $25.334 trillion, followed by the US with $22.27 trillion, India with $8.165 trillion, Japan with $6.429 trillion and Germany with $3.714 trillion.


HSBC’s projection for PHL: $1.69-T economy in 2050

THE Philippines is seen to become the 16th largest economy in the world by 2050—larger than even neighboring Indonesia, Malaysia, Thailand or even oil-producing Saudi Arabia or the Netherlands.

The British-owned global lender HSBC made the forecast in a study projecting the size of 100 economies 40 years hence, expanding the same from the original 30-country review published last year.

HSBC said the Philippine economy were to expand from the puny $112 billion at present into a leviathan capable of generating output worth $1.69 trillion or 15 times larger.

“Our ranking is based on an economy’s current level of development and the factors that will determine whether it has the potential to catch up with more developed nations. These fundamentals include current income per capita, rule of law, democracy, education levels and demographic change, allowing us to project the gross domestic product [GDP] forward,” the bank said.

HSBC said the forecast upgrade in the country’s economic standing was less the result of an increase of individual prosperity than as a result of the impact of its expanding population.

Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. earlier told reporters he considers the country’s rising population as a positive influence on growth rather than as contributor to eventual perdition.


“It is the small-population, ageing economies in Europe that are the big relative losers, seeing the biggest moves down the table,” HSBC said.


“There are some truly remarkable hot spots in Asia... The star performer, however, is the Philippines where the combination of strong fundamentals and powerful demographics gives rise to an average growth rate of 7% for the coming 40 years,” the report read.


HSBC said the Philippines was likely to post an average growth of 7 percent in the next 40 years.
Breaking down the average growth forecast, the bank said the country would likely grow by 8.4 percent from 2010 to 2020, by 7.3 percent from 2020 to 2030, and by 6.6 percent from 2030 to 2040, and by 5.8 percent from 2040 to 2050.

Thursday, 12 January 2012

It's more fun in the Philippines

A carefully curated Collection of all the FUN Things you can enjoy when you visit the Philippines!

(For more information about this Philippines tourism campaign, please visit:

Tuesday, 10 January 2012

The dark side of 2012

Business Mirror

THE sun is shining, the birds are singing, and Philippine Stock Exchange prices are advancing higher with incredible strength and momentum.
And the current controversy about the new tourism slogan has replaced impeachment and corruption trials as the biggest news story.

It is definitely time to look at the dark side, the very dark side.

While holding the highest respect for our local business journalists, to attribute our recent stock-market performance to all the good economic news coming from the US is just plain wrong. Stockbrokers do not help things by spreading this false information.

The latest good news is the “fact” that the US economy created 200,000 jobs in December, the highest in a long time. However, closer examination of the official data shows of that 200,000 new jobs, 55,000 of these were in “transportation and warehousing” and 42,000 new jobs in the “couriers and messengers” category. This happens every December and then, every January those numbers are revised downward to nearly zero after the Christmas holiday season.

Unless the US intends to build its $14-trillion economy with every working person having his own personal messenger, 2012 is not going to be any better than 2011. In my opinion, one year from now, many countries are going to wish the Mayans were right about the world ending in 2012.

We hear so much about the global debt situation but the discussion centers on those countries, so-called debt hot spots, which are at risk of not being able to pay their bills. But that is only the tip of the iceberg.

Total global debt in 2000 was $27 trillion. It skyrocketed to $42 trillion by 2005. At the end of 2007, the number was $51 trillion. Now total global debt is over $115 trillion.

The total global economic output, or global gross domestic product (GDP), is about $70 trillion. We talk about countries’ debt-to-GDP ratio, with anything over 100 percent being unsustainable. Yet the world is running at a minimum of 150-percent debt-to-GDP ratio.

And here is the dark side. The countries that account for most of the output also account for a disproportionately larger amount of the debt.

Economic activity cannot grow large enough or fast enough to pay this debt. The only reasonable alternative is to default, let the banks take the hit, and start over. But that is not going to happen. The bankers own the politicians in these countries.

So they must continue to borrow more to fund their debt repayments. But who is going to loan to them at the lowest interest in history? Further, the middle-class of the West is being drained dry, its productivity swallowed up by its governments through taxes.

Simply put, these countries are doomed and their economies will drown in this debt.

The average citizen in the West pays twice as much for a gallon of gas and 50 percent more for food since 2001 while taking home less pay. And that trend will continue and perhaps accelerate through 2012.

While the Occupy movement is nothing more than a leftist/liberal political ploy to further Obama’s chances at re-election despite a dying economy and presidency, genuine unrest has already happened in Europe and is happening now in China.

The profits of US corporations now equal over 10 percent of the GDP. That is the highest level in five decades. This also comes at a time when nearly half of all Americans depend on government handouts for at least some of their living expenses. This situation is completely unsustainable.

Chatham House, the London-based policy institute for international affairs, says the world economy is so fragile that it could sustain only one week of a major crisis, either natural or man-made. These would include a disease outbreak like SARS or a major Japan-style earthquake in the US. A disruption of oil supply from a military confrontation with Iran would also qualify.

Major social unrest lies just below the surface and could boil up at any time.

People in the West are not going to sit by and wait for disaster. They are moving both money and bodies out to other places. It is too bad our policy-makers are not aware of that fact in order to take advantage of it. Well, maybe the tourism secretary is aware and that prompted his new slogan.

This Monday, foreigners bought a net P1 billion worth of Philippine shares. This is a trend that has been happening for a month and I think it is going to continue.

I am not sure if it’s more fun in the Philippines, but the economic and social sun is brighter here than in the West.

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