Purchase OBG Publications

The prevailing narrative of the Philippines’ energy sector in recent years has centred around energy security con¬cerns and the challenge of meeting growing demand. Efforts to realign the energy sector were ramped up during 2017 with the launch of reforms targeting investment and the promotion of efficiency. Modifications to the Electric Power Industry Reform Act of 2001 have come at a critical juncture for the Philippines, as robust economic growth has outpaced the sector’s capacity to meet surging demand. Due to the imminent exhaustion of the country’s gas fields, dependence on imports of hydrocarbons has grown, worsening the current account deficit. In addition to falling reserves, the cost of electricity is also a major concern. This chapter contains an interview with Alfonso Cusi, Secretary of Energy.

The banking sector in the Philippines is expanding rapidly, hitting double-digit credit growth in four of the five years in the 2013-17 period. In addition, the sector simultaneously recorded notable improve-ments across major stability indicators. The country’s banking sector is highly liquid and well provisioned, and it benefits from robust macroeconomic growth, even as excess liquidity and credit concentration in certain sectors have become a concern. All signs point to continued expansion in 2018, with non-performing loans declining in recent times as credit growth has gained momen¬tum. Furthermore, global rating agencies have pro¬jected stable, sustainable expansion, although the sector’s outsized corporate loan portfolio leaves commercial banks – particularly creditors of large conglomerates – exposed to concentration risks. This chapter contains an interview with Nestor A Espenilla Jr, Governor, Bangko Sentral ng Pilipinas; and a roundtable with Aftab Ahmed, Country Officer, Citibank Philippines; Cecilia C Borromeo, CEO, Development Bank of the Philippines; Simoun Ung, President and CEO, OmniPay; and Edwin Bautista, President and CEO, UnionBank of the Philippines.

Foreign direct investment in the Philippines hit an all-time high in 2017, bolstered by robust GDP growth, favourable demographics and the manufacturing segment, with inflows from Japan, Europe and China rising steadily in recent years. An ongoing geopolitical shift could have a pro¬found impact on trade and investment in the Phil¬ippines, with the government increasingly turning to China as a favoured bilateral partner, and rela¬tions with the US, an important historical trade and investment partner, cooling since President Rodrigo Duterte took office in June 2016. The Philippines benefits from a diversi¬fied export market, with rising regional trade ties and strong demand from the EU, its second-largest export market, expected to maintain stability even as US investment in the country may ease. This chapter contains a viewpoint from Steven Ciobo, Minister for Trade, Tourism and Investment of Australia; and an interview with Ramon M Lopez, Secretary, Department of Trade and Industry.

A pillar of one of Asia’s rising economies, the Philippine industrial sector posted another strong performance in 2017, growing by 7.6% despite recent geopolitical turbulence related to the 2016 election. Manufactur¬ing output increased by 8.5%, bolstered by expansion in each of its core segments of electronics, food and beverages, chemicals and furniture. Riding the wave of consumer confidence that has remained relatively steady since the presidential elec¬tion in 2016, the Philippine retail sector scores well in global rankings for development potential. With a population of over 105m and a growing consumer middle class, per capita GDP reached around $7700 at purchasing power parity in 2017, moving ahead of India. This chapter contains an interview with Inanc Balci, CEO and Co-founder, Lazada Philippines.

With some 7641 islands inhabited by 175 ethnolinguis¬tic groups, the Philippines is one of the most diverse and geographically fragmented countries on earth. The modern Philippines has thus long been faced with the challenge of uniting these multiple groups within a single nation, while also allowing local and regional communities to prosper. The year ahead will likely see the latest chapter in this process begin with a major push towards the creation of a federal state. This, advocates hope, will help address issues of uneven development between the regions, ushering in a new era of investment and enterprise in some previously neglected areas. This chapter contains a roundtable with Mauricio Domogan, Mayor, Baguio City; Oscar S Moreno, Mayor, Cagayan de Oro; and Sara Duterte-Carpio, Mayor, Davao City.

As efforts to develop tourist attractions ramp up inside the capital and beyond, the Philippines is well placed to capture a lucrative share of the 1.3bn-strong market of global business and leisure travellers. An archipelago of over 7000 islands with bountiful natural attractions and rich cultural tradi¬tions, the country drew 6.6m visitors to its shores in 2017, representing an 11% increase on the previous year. Tourist spending hit $27bn in the process, up from $25bn in 2016, contributing nearly 10% of GDP. This chapter contains interviews with Lawrence Ho, Chairman and CEO, Melco Resorts & Entertainment; and Andrea Domingo, Chairman and CEO, Philippine Amusement and Gaming Corporation.