Is a 10% GDP growth achievable?

His recent pronouncement after his return from Peru bolster the idea of economic openness, as he proclaims his willingness to open the energy and telecommunications sectors to more players. Isolationist? Read again. But the impact of that pronouncement has deeper implications that we think.

Telecoms and energy sectors are major drivers of economic growth and business expansion, especially given that the country’s Business Process Outsourcing (BPO) sector, already pulling in 25 billion dollars annually, and hosting a million jobs, will see its costs go gown when players in these two sectors expand services and volumes.

Telecoms: meeting the need for faster and cheaper internet

Cheaper and faster internet will be the main beneficiary of telecoms expansion, pushing telecommunications companies like Globe to spend 750 million dollars mainly on data services over the next 3 years.

This is mainly because in its case, revenue on mobile data has increased by 55% to the tune of 22 billion pesos in 2015. Expect this to grow even more vs. voice services. Online shopping, and online outsourcing (home based BPOs) will demand faster internet to take in the volume of transactions and exchanges.

Gone are the days when the internet was merely for student research and online gaming. It is now a part of the daily fare of the people. Experts have already noted that half of all Filipinos have a Facebook account.

We wonder how much PLDT is spending on the same, but we can safely assume its to the same tune if it hopes to stay competitive.

Getting the right internet speeds up for the country with the slowest internet in 2015 is a task by itself. Bringing in another two players may push the bands further and lower costs. With this, the Filipino benefits.

Lower Asias highest power costs drives the manufacturing resurgence

At the moment, our power costs are Southeast Asia’s highest, pushing up production costs for power hungry job generating sectors such as manufacturing, which, of late, has already been rising as a percentage of GDP. Lowering rates for these factories enables them to expand, generating more jobs, and lowering the cost of making these new products, making them competitive in a volatile market.

Lowering these costs make the BPO and manufacturing sectors even more competitive against India, for example. This enables the Philippines to remain on top of this game. The multiplier effect of these sectors already is apparent, in the property and manufacturing boom, as more BPO employees with cash can now buy their homes and cars.

LEAVE A REPLY

Please enter your comment!
Please enter your name here