Philippine Economy Rises to Challenge
Thurston, Charles W., Global Finance
Strict economic discipline and a booming electronics sector are helping the Philippines become one of Asia's best performers.
When Philippine President Joseph Estrada cut the ribbon on the first of a dozen light-rail stations to be completed in Manila's new municipal transit system in midDecember, he could have been unveiling his vision for the country's economic growth.
With moderate inflation of 6.91/o, promising 2.1% GDP growth, rising foreign investment and reserves, and a nearly tamed deficit, the country's economy is thriving.The $655 million Manila rail system, for example, being built by ICF Kaiser International of Fairfax, Virginia, is indicative of the fresh flow of direct foreign investment into the Philippines and the commitment of the government to develop the nation rapidly to keep pace with-if not ahead of-other Asian tigers.
Massive projects in transportation, electric power, telecommunications and other infrastructure are helping the country rapidly increase its high-technology exports relative to traditional exports. According to Bill Reinhardt, a Harrison, New Jersey, international project finance analyst, there are currently 73 infrastructure projects worth an estimated $30.7 billion under way in the Philippines. Privatization, too, has been an engine for growth, with telecommunications sales leading the way over the past two years. And the Philippine Supreme Court in December weighed in with a vote of confidence for the privatization program, ruling that the deregulation of the national oil industry is fully constitutional.
Such development activity has been resuscitated by rising foreign direct investment, which was up to $1.3 billion by mid-1999, compared with a total of $500 million in 1998. Investors have been reassured by the early track record of President Estrada, who has been, surely if slowly, moving the country toward global market conditions. …