L to R: Bases Conversion and Development Authority President Joshua Bingcang, Department of Transportation Secretary Jaime J. Bautista, Department of Trade and Industry Secretary Fred Pascual, Department of Energy President and Chief Executive Officer Felix Fuentebella

Tokyo, Japan—The Philippines is a very promising economy and its strong fundamentals position it for continued growth and development, according to Department of Trade and Industry (DTI) Secretary Fred Pascual’s pitch during the meeting with Rating and Investment Information, Inc. (R&I), June 20.

Secretary Pascual was joined by the other Cabinet secretaries to present a compelling case for the Philippines’ strong economic performance and positive outlook, bolstering the country’s position for a potential upgrade in its credit rating.

“We are particularly encouraged by the resilience our economy has shown in the face of recent global challenges.  The Philippines’ robust domestic demand, strategic infrastructure investments, and young and skilled workforce position us for a credit rating upgrade and strong economic trajectory.”

R&I, the largest credit rating agency in Japan, had previously affirmed the Philippines’ credit rating at BBB+, but crucially revised the outlook to positive from stable in August 2023. This revision signifies a chance for an upgrade to ‘A-‘ within the next two years.

With a 5.7% gross domestic product growth in Q1 2024, the Philippines stands out as one of the fastest-growing economies in the region, surpassing Vietnam (5.7%), Indonesia (5.1%), Malaysia (3.9%), Singapore (2.7%), and Thailand (1.9%).

The meeting with R&I also provided a platform to showcase the government’s dedication to improving the ease of doing business in the Philippines. Initiatives such as the CREATE MORE Bill, streamlining of permit processing, and establishment of Green Lane units in government offices were all presented as concrete steps designed to attract foreign investments.

In support of these policy reforms, the DTI, through its Board of Investments (BOI), is actively promoting the Philippines’ advantages and investment potential through the “Make It Happen in the Philippines” campaign. This prioritizes sectors like electric vehicles, smart/high technology light manufacturing, semiconductors and electronics, green metals processing, high-tech agriculture, renewable energy, data centers, and telecommunications infrastructure.

Recognizing the burgeoning global demand for electric vehicles, the Philippine government is also prioritizing the development of a robust electric vehicle (EV) industry.  The Electric Vehicle Industry Development Act (EVIDA) provides a comprehensive framework with a range of incentives for EV manufacturers—building on the country’s wealth of natural resources, particularly critical green metals (e.g., nickel, cobalt, and copper).

To complement this business environment, the Philippines also boasts a significant demographic advantage with a median age of 26, the youngest workforce in the Association of Southeast Asian Nations (ASEAN). This translates into a readily available pool of 51.2 million talented and adaptable workers, ensuring a long-term advantage for businesses seeking a skilled and productive workforce.

“Our combination of a stable and expanding economy, a highly skilled workforce, and a strategic geographic location makes the Philippines an undeniably attractive proposition for investors seeking a vibrant and rewarding business landscape,” said Secretary Pascual.

“The Philippines stands primed for sustained economic growth. We extend a warm invitation to Japanese businesses to join us and unlock the immense potential of the Philippine market,” he added. ♦

Date of release: 21 June 2024