Global demand for Philippine-made consumer goods and services will drive the growth of the exports sector and enable the economy to expand by 7 percent this year, according to the Trade Department.
Both government and business leaders are optimistic about a sustained economic growth, owing to the strong showing of exports in 2013, increased investor confidence and the promise of more foreign direct investments.
Foreign investments are expected to steadily increase, as the country hits the sweet spot amid improving political and economic stability, strong domestic consumption, reconstruction and infrastructure spending and stable macroeconomic condition.
In 2014, foreign direct investment is forecast to grow 10 percent over P120.65 billion in 2013, the Trade Department said.
The agency said at least 23 companies pledged to set up operations in the Philippines, from the series of in-bound trade missions that contributed at least $200 million to total direct foreign investments last year.
Among the industries that are expected to set up operations in the country are those in the business processing management sector as well as in telecommunications, wholesale and retail trade, healthcare, construction, automotive and financial services sectors.
Of the inbound missions served by the Board of Investments, Japanese companies showed the highest level of interest and are seen to dominate foreign investments in 2014.
Sustained interests among American, Chinese and Korean investors are also evident. Scandinavian companies are also checking out the Philippines for a due diligence scoping mission within the year.
Famous retailers from Europe are coming in, with the Trade Department asking consumers to watch out for more foreign retail shops opening in 2014.
Investments approved by investment promotion agencies in 2013 surged 29 percent to P466.03 billion from P360.35 billion in 2012. About 282 projects were approved and expected to generate 38,100 jobs when fully operational.
Domestic investments hit P345.39 billion, following the approval of big power projects as well as investments in transportation and storage, real estate, manufacturing and accommodation and food service sectors composed primarily of hotels, resorts and other accommodation facilities.
The better-than-expected results in 2013 encouraged the Trade Department to forecast a more positive economic growth in 2014.
It said growth this year was expected to come from better showing of exports, with a growth of about 8 percent over $76 billion in 2013. The figure includes merchandise shipments and service exports, such as business process outsourcing receipts.
The Bureau of Export Trade Promotions, an attached agency of the Trade Department, said it was quite optimistic about doubling the exports value to $120 billion by 2016.
The Trade Department also sees investments growing faster than the GDP this year, given the increased interest among foreign and domestic investors, as the country shifts from a consumer-driven economy to an investment-led economy.
The ongoing reconstruction efforts in calamity-stricken areas are also expected to contribute to jobs generation this year.
Data from the Philippine Economic Zone Authority showed that employment in special economic zones would likely breach the 1 million mark in 2014.
Moreover, macro-economic indicators remain stable while the weakening of the peso is seen beneficial to the export sector.
The Trade Department also looks forward to revitalizing the manufacturing sector. The government recently allotted P5.1 billion to revive the sector until 2016. For 2014, the department will get P2.3 billion for the manufacturing resurgence program, 1.2 billion in 2015 and P1.6 billion in 2016.
The Board of Investments said of the 600 inquiries it received each day, nearly half of the queries were about manufacturing. In 2013, the manufacturing sector grew 10 percent while services managed to increase by 7 percent. The Trade Department said it expected the two sectors to grow faster in 2014, after more companies committed to invest in the country.
Among the industries that expressed commitment to set up operations in the Philippines are shipbuilding, toys manufacturing, garments, electronics, medical equipment, among others.
Meanwhile, local businessmen said they would focus on enabling Philippine companies to maximize benefits from the business opportunities created by a global economy.
Newly-elected Philippine Chamber of Commerce and Industry president Alfredo Yao, who chairs a number of companies including Zest-O Corp. and Asia Air Zest Airways, vowed to focus on reducing the cost of doing business, ensuring a competitive fiscal regime and aligning human resource development with industry and international standards.
The PCCI said it would also continue to promote small and medium enterprises and business development, improve agricultural productivity and encourage a robust legal framework for investments.