PH economic prospects 2012 from the Oxford Business Group: Boosting domestic demand

Boosting domestic demand

"January’s revelation that the Philippine economy grew 3.7% in 2011 came as the government and central bank announced new measures to further boost growth. Indeed, President Benigno Aquino’s administration plans to spend its way through current economic challenges, refocusing on domestic rather than foreign markets.

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"The Philippines is hardly alone in trying out a myriad of solutions to maintain growth during a slowdown. The IMF is projecting worldwide growth of 4% this year, a reduction from earlier estimates of 4.5%, while the World Bank is predicting global growth of only 2.5% in 2012. Indeed, the entire Southeast Asian region has watched with concern as its formerly robust growth has begun to slow. Recently, the central banks of Indonesia and Thailand have also tinkered with their monetary policies in an effort to fend off the external economic malaise.

"In addition to floating bonds, the Philippines’ government is also actively looking to attract public-private partnerships to fund infrastructure projects. According to the socioeconomic planning secretary, Cayetano Paderanga, Jr., the government is allowing foreign firms to participate in components of projects, or to partner with domestic companies. An agency dedicated to this, the PPP Center, is liaising with local governmental bodies and potential foreign investors.

"The success of this relationship in attracting greater foreign investment will undoubtedly be crucial in determining the speed and delivery of the government’s project portfolio and thus of its plans to boost growth in a time of global export chills."