MANILA –Vietnam, Indonesia and the Philippines – labeled as the “VIP economies” by real estate services giant, Cushman & Wakefield – are seen to attract more foreign investments in the years to come.
The property consultancy specialists published a report entitled “Emerging Hotspots: The Rise of the VIP” which said that the economies of the Philippines, Indonesia and Vietnam are climbing, given their “strengthening economic and demographic prospects.” This; despite the three Asean countries always having been “considered among the region’s economic laggards.”
“The rise of the VIPs is very important for the future of the global economy, signifying that the advance of emerging economies is widening and deepening, extending to regions that had been previously left out. So, for now, forget the BRICs [Brazil, Russia, India and China]; take a look at the VIPs,” the report read.
“The region has weathered the fallout from the 2008 global financial crisis better than many. Government debt in Indonesia and the Philippines is less than 50 percent of GDP, compared with over 90 percent in the UK and the euro area, or over 100 percent in the US. Sound fiscal and monetary policies have been key drivers of growth,” it added, noting the recently upgraded debt ratings of the Philippines and Vietnam.
Cushman & Wakefield pointed out that global investment interest in the three countries is already being stirred, in light of the economic upswing.
“US interest has noticeably increased in the Philippines and Vietnam over the past year, though the volume of investments remain relatively small compared to the entire Southeast Asian region,” it said, citing as well that Japanese investments into the three ASEAN countries have increased by an average of 15-20 percent each year since 2009.
The report also highlights that these VIP countries have increased in their global competitiveness rankings, referencing the 2014-2015 World Economic Forum (WEF) report, in which Indonesia, the Philippines and Vietnam placed 34th, 52nd and 68th of the 148 economies covered, from respective rankings of 54th, 87th and 75th just five years ago.
Cushman & Wakefield described that the Philippines latest WEF ranking as a “remarkable gain,” reflecting the biggest increase posted for 2014-2015.
It underscored that the Philippines is one of the fastest-growing economies in the ASEAN mainly as a result of the cash remittances being sent home by overseas Filipinos workers (OFWs), which fuels strong domestic consumption and serves to boost the income generated by the country’s business process outsourcing (BPO) sector.
The report emphasizes, however, that the Philippine economy could grow at even faster rate if the country could improve its infrastructure at the soonest time.
“Recent impact from Typhoon Haiyan (Yolanda) illustrates a shortage of modern infrastructure that makes the Philippines highly vulnerable to disasters. The government needs to boost infrastructure spending from the current 3 percent to 5-7 percent of GDP in order to keep pace with its regional neighbors and sustain its growth momentum,” it said.