Is Trillion Dollar economy Attainable for PH?

Could the Philippines Really Become a Trillion-Dollar Economy in the Next Decade?

Story by Currie Cator
Esquire Philippines
19 April 2024

The World Economic Forum (WEF) is optimistic that the country could be a $2-trillion-dollar economy in the next 10 years—reaching the same level as mainland China, Japan, India, South Korea, Australia, Taiwan, and Indonesia. 

That’s on the condition, though, that the Philippines scores better investments in key sectors. 

Currently, the country’s economy is pegged at around $476 billion, the WEF said.

In its property market report, consulting firm Leechiu Property Consultants said the Philippines saw an 18-percent surge in foreign tourist arrivals in the first quarter of the year. This is the highest since 2019.

The demand for hotels, tourism, and leisure went up to 1.66 million, with travelers mostly coming from South Korea at 27.5 percent. 

Overall hotel performance is expected to bounce back by 2025, according to the report.

Leechiu also reported a growth in office take-up by a quarter in the first three months of 2024, the largest over the last four years.

It said the increase in demand was observed across all industries, "indicating a widespread and robust expansion." 

Office market transactions rose to 331,000 square meters (sqm) from the 264,000 sqm. in the same period last year.

The "sustained" take-up was attributed mainly to traditional companies or government agencies, as well as the IT-BPM (information technology and business processing management) industry. Philippine Offshore Gaming Operations (POGOs) also continued to take up space, accounting for about 55,000 sqm.

Another factor driving possible growth, according to Leechiu, is the shift of the country's residential market to the provinces. 

Real estate loans outside Metro Manila rose in recent months, whereas the capital is experiencing a slowdown in residential condominium sales.

As for capital values, delayed interest rate cuts have been causing fatigue in the economy.

But Leechiu said the market remains bullish, as the U.S. presidential elections this year may force the Federal Reserve to slash rates; though it may still depend on inflationary management.

"Long-term view [is] still positive as Philippines continues to be one of the fastest growing countries in the world at 5.9 [percent]," the report said.

The country's inflation rate rose to 3.7 percent in March due to higher food prices and transportation costs.

In 2023, the Philippines recorded a full-year gross domestic product (GDP) growth rate of 5.6 percent, falling short of its six to eight-percent target.