by: Sarah Joson
Friday, August 7, 2015 |
According to Thrinh Nguyen, an economist at global banking institution HSBC, whoever wins next year’s presidential elections will take over a leaner economy. The Philippines has managed to rise as one of the bright stars of Asia due to the efforts of the current administration which include reduced public debt burden brought on by greater revenue generation, disciplined government spending, stable macroeconomic growth, and improved aggregate investment in the economy.
Nguyen also pointed out that the Philippines has surpassed numerous challenges in the last 30 years - from the time when the economy struggled with debt and stagflation, to a steady growth and low debt in the household and public sectors.
She added that next year’s presidential winner will “inherit a much leaner economic machine” - one that has moved up from high interest expenses resulting to savings, and has lowered the dependency ratio.
Nguyen cited the Philippine government’s disbursement of more than a third of its expenditure on interest expenses in 1990 where it revealed the high amount of debt accumulated during the Marcos years. In fact, she said interest payments have declined and are predicted to become lower than 15 percent of the total fiscal expenditure by the end of 2016.
As challenges are continuously worked on, the Philippines is going through a favorable demographic transition, and has experienced lower debt and excess savings, the next President is expected to have more time and resources to focus on greater infrastructure improvement and investment. This could include electricity generation and transportation and accessibility to accommodate rapid growth.
We can help you understand the possibilities. Reach out to us today.