We highlight an island nation with a powerful business case for companies considering the Asian market
Watch the video for insights from local business leaders and read on for a summary of why UK businesses should take a look at this growing market.
1. Fast-growing economy
At 6.1% the Philippines is Asia’s second- fastest-growing economy after China for 2014. Long-term growth of 7% is achievable.
2. Investment growth
While still low compared with its neighbours (just 1.2% of GDP), foreign direct investment (FDI) has caught up recently; from $3.2 billion in 2012 to $3.7 billion in 2013 and more than $5.7 billion in 2014.
3. Appetite for Western goods
The Philippines has close to 103 million people and is the 12th-largest market in the world in terms of population. UK Trade & Investment reported that “British exports to the Philippines have grown by over 10% annually for the last three years”. It attributes this growth to “the Philippines’ expanding consumer base, growing middle class with a strong appetite for Western goods and services, a growing economy fuelled by remittances and a strong services sector”.
4. Improved competitiveness
Recent policy reforms have been reflected by positive economic indicators. Credit ratings agencies upgraded the Philippines’ sovereign papers to investment grade in 2013. The country has also improved its ratings in international surveys – in the World Economic Forum’s Global Competitiveness Report it climbed from 85th out of 139 countries in 2010 to 52nd out of 144 in 2014 – the biggest jump of any country. And it leapt from 144th of 183 countries in 2010 to 95th of 189 in the World Bank’s 2015 Doing Business survey.
5. Highly literate, English-speaking population
With English widely spoken in the Philippines, business leaders from the UK will find communicating with partners, clients and employees easy. Literacy is also high, with more than half a million university graduates each year joining an educated workforce.
6. Strategic location
The Philippines is ideally located between Indonesia, Malaysia, Thailand, Vietnam, China and Japan. It is within four hours’ flying time of any Southeast Asian capital, which is why multinational companies are establishing a growing number of regional operating headquarters there.
7. Young population
The median age in the Philippines is 23. The young workforce constitutes a large part of the growing middle class, which is driving consumption. Many mid- to high-end UK retail brands have successfully entered the Philippine market in recent years.
Marivic Españo is Chairperson and CEO of Punongbayan & Araullo, Grant Thornton, Philippines. Video: Rama Knight