The Philippines is becoming a cost-effective destination for multinational companies, according to Cushman & Wakefield, a global real estate consultancy company.
The Philippines is the second fastest growing economy in Asia and among the five largest Southeast Asian economies (ASEAN-5). It recently accelerated 7 places, placing 52nd, in World Economic Forum (WEF) Global Competitiveness Index 2014-2015.
According to the report, only three countries have recorded higher values in all areas since 2010: Malaysia, the Russian Federation, and the Philippines, whose gain of 33 places since 2010 is the largest over that period among all countries studied. The results suggest that the reforms of the past four years have bolstered the country’s economic fundamentals. The trends across most of the 12 pillars are positive, and in some cases truly remarkable.
In the institutions pillar (67th), the Philippines has advanced by 50 places since 2010. In particular, there are signs that the efforts made against corruption have started bearing fruit: in terms of ethics and corruption, the country has moved from 135th in 2010 to 81st this year. The recent success of the government in tackling some of the most pressing structural issues provides evidence that bold reforms can yield positive results relatively quickly. A similar pattern is observed in terms of government efficiency (69th) and the protection of property rights (63rd). Finally, the Philippines has made significant strides in terms of technological adoption (69th), up by eight notches.
Last May, the country received an investment grade of “BBB”, a notch above its previous rating of “BBB-”, from Standard & Poor’s (S&P). Meanwhile, Moody’s Investors Service also raised the country’s credit rating to Baa3 from Ba1 last October, and assigned a positive outlook of another credit rating upgrade soon, while Fitch Ratings maintain its rating at ‘BBB-’ and ‘BBB,’ for the country’s long-term foreign and local currency respectively.
Joe Curran, general manager of Cushman & Wakefield Philippines, explains, “The performance of the office sector in Manila compared with other cities in the region is a testament to how strong the market is today. It is witnessing a positive momentum due to strengthening economic conditions and improved business sentiments, relatively insulated from the global slowdown. Stable growth in the BPO sector continues to fuel office expansions in Metro Manila.”1
According to Cushman & Wakefield, “As the Philippine economy continue to grow, it may soon join China and India as viable host of MNC’s overseas operations.” “If China or India is the present, perhaps the Philippines is the future. The economic trajectory of the Philippines is nascent compared to India, and presents great opportunities for global giants,” it added.
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