Philippines

High levels of liquidity and continued solid growth in the domestic economy are feeding into the Philippines’ retail sector, with sales rising on a tide of improving consumer sentiment. However, the central bank could move to take some of the heat out of the market in an effort to counter the creeping inflation fuelled by supply side pressures.

Private universities in the Philippines are poised to benefit from ongoing reforms aimed at improving access to the primary and secondary education system, although a marked rise in student numbers across the board is presenting challenges.

Though early performance has been sluggish, officials in the Philippines are confident the strong foreign direct investment (FDI) showing from last year will be maintained in 2014, with an improved business climate along with political and economic stability as the Philippines’ main selling points. Even so, competition for investments is likely to remain keen.

Growing rice consumption in the Philippines has created a host of challenges and opportunities for stakeholders, as an ongoing lack of mechanisation and post-harvest inefficiencies have prevented the government from meeting its goal of achieving rice self-sufficiency. Although palay (unhusked rice) production has made steady gains in recent years, farmers continue to face high costs due to the lack of technological uptake. This has led to heavy importation, with the current administration recently awarding two high-value contracts to foreign firms for buffer stock supply. Mechanisation, most likely to be achieved through private sector investment, represents a promising means of increasing rice production in the future.

As the Philippines’ market for handheld devices continues to expand, mobile broadband has been identified as the industry’s most significant driver of growth. Mobile penetration passed 100% in 2012, and, with fast-expanding 3G and 4G LTE networks expected to further bolster revenues and subscribership, mobile operators are boosting capital expenditures as they rush to cover more of the map.

Local leaders in Manila have defended new rules that restrict access of heavy vehicles to the capital’s streets, saying the scheme will encourage smoother movements of cargo once shippers adapt to the requirements. However, opponents of the ban say it will slow trade activity, jeopardising future economic growth.