by: Sarah Joson
Monday, February 16, 2015 | Outsourcing News |
In Citibank’s recently released ‘2015 Annual Outlook’, the Philippines is pegged to outperform China in terms of economic growth in 2016 on account of the country’s growing foreign direct investments, strong domestic upswing in business and industry, and highest-ever remittances from overseas Filipino workers. The forecast also stated that India will likewise outpace China.
On the other hand, China is expected to slow down as it gears up in addressing national challenges such as high public debt, over-investment in real estate and infrastructure, reduced domestic consumption, and regional imbalances. China is also said to be preparing for a “more sustainable” GDP growth.
Last year, the Philippines posted an economic growth of 6.9% during the fourth quarter. As for the entire fiscal year 2014, the country posted a GDP growth of 6.1%, which is similar to the rates posted by other major Asian countries. Growth is predicted to reach 6.5% in 2015, and 7.3% for 2016.
China posted a growth rate of 7.3% last year, and 2015 and 2016 estimates are 6.9% and 6.7%, respectively. The report also pointed out that China is on thin ice as it continues to work on both growth and reform. This could lead to a drop in GDP growth where expansion could fall somewhere in the range of 6-7%.
Growth in the Philippine economy is linked to the continuous efforts of President Benigno Aquino III to improve the economy by means of strict anti-corruption campaigns and improved fiscal management reforms. These then resulted to upgrades by major debt watchers - right on the heels of an increase in foreign direct investment. Another growth factor is the increased public spending particularly in the business process outsourcing (BPO) industry and construction. Large-scale investors in the car and electronics manufacturing industry are also expected to expand operations in the country.