Economic integration by the Association of Southeast Asian Nations (Asean) could boost Philippine exports five-fold over the next 35 years, banking giant HSBC said, making the economy one of the largest in the world.
“We see more trade and investment opportunities for Philippines with the integration of Asean,” said Mimi Concha, HSBC’s head of commercial banking for the Philippines, in a statement on Wednesday.
Concha stressed that the Philippines was leveraging synergies and economies of scale made possible by ongoing integration initiatives.
“In the years to come, we see the Asean building and improving regional connectivity opening up opportunities to companies we work with here in Philippines, in the region and around the globe,” she said.
HSBC said that with export figures conservatively expected to surge five-fold to $329 billion in 2050, the Philippines remains one of the fastest-growing economies in Asia.
It noted that the country was continuing a positive growth trajectory that started in the first quarter of 1999. The bank reiterated that HSBC Global Research forecasts placed the Philippines as rising to become the world’s 16th largest economy by 2050 given its demographics and rising education standards.
HSBC’s latest outlook on the Philippines accompanied new forecasts for the Asia Pacific region, laid out in the bank’s Trade Winds report.
In the report, HSBC said Asia was poised to ignite a decade of global trade growth and be the starting point for a quadrupling of worldwide exports to an estimated $68.5 trillion by 2050.
It forecast that the cost of shipping would fall, driven by a combination of larger vessels and the expansion of shipping lanes.
New airports, improvements in energy efficiency and further streamlining of border control processes will speed up trade and reduce air freight costs, HSBC added.
“In the Philippines, investments on infrastructure such as ports, airports and better road networks will push down prices,” Concha said.
Noting changes in policies with the recent amendments to the Cabotage Law, she said there would be significant improvements in the movement of products and people as the infrastructure and trade environment improves.
The fast growing business process outsourcing (BPO) industry will remain a particular strength of the Philippines, Concha noted.
“Philippines is one of the top BPO sites and growth in this sector remains to be strong. This is fueled by the demographics, as Filipinos are one of the youngest in this part of the globe, and this is coupled with improving literacy,” she said.