Big news is emerging about the future of the Philippines. Many analysts and global institutions are now predicting that the country could reach a gross domestic product (GDP) of one to two trillion dollars within the next decade. Recently, the World Economic Forum (WEF) President, Borge Brende, expressed strong optimism about the Philippine economy, suggesting it could surpass two trillion dollars in GDP. If this happens, the Philippines would be on par with economies like Canada, which currently has a GDP of 2.2 trillion dollars, South Korea at 1.7 trillion dollars, and Italy with 2.2 trillion dollars. Achieving this milestone would elevate the Philippines to a status comparable to these nations.
However, President Brende emphasized that this economic growth will only be possible if key reforms continue. He highlighted the importance of investing in education, infrastructure, and unlocking the full potential of the Filipino people. Additionally, reducing red tape and bureaucratic barriers is crucial to creating an environment where entrepreneurs and businesses can thrive.
What might surprise those who are skeptical about the Philippine economy is President Brende’s observation of its resilience. He noted that the WEF sees a significant increase in global business interest in the country, and that the Philippines is now among the fastest-growing economies in the region. Furthermore, President Brende pointed out the enormous opportunities in the renewable energy sector. By tapping into this potential, the Philippines could reduce its reliance on energy imports, which currently costs the nation billions of dollars annually. The government’s decision to allow foreign ownership in renewable energy has already attracted substantial foreign investments in this sector.
Recent investments in renewable energy are impressive. Just a week ago, Ayala’s ACEN subsidiary and BrighNight Power, a US-based company, announced a 1.2 billion US dollar renewable energy project. This is a significant investment. Australian firms have also shown strong interest in investing in the Philippine renewable energy sector, and Germany recently announced 56 billion pesos in wind and solar projects. These are just a few examples, and if the Philippines can fully leverage these opportunities, it could indeed become an energy powerhouse. While government policy in opening up foreign ownership plays a role, the attractiveness of the Philippines as a destination for renewable energy investments cannot be overlooked. The country’s abundant natural resources, such as consistent sunlight and strong winds, make it an ideal location for solar and wind energy development.
One of the most promising aspects, highlighted by President Brende and many others, is the youthful population of the Philippines. According to United Nations data, the median age in the Philippines is just 24.5 years old, much younger compared to Vietnam at 32 years old, Indonesia at 29.4 years old, or China at 37.9 years old. A younger median age suggests a dynamic labor force that can quickly adapt to new technologies and trends. In the rapidly evolving global economy, the ability to learn and innovate is critical, and the Philippines’ young workforce is well-positioned to meet these challenges.
Moreover, a young population indicates potential for sustained economic growth. Economists often refer to the ‘demographic dividend,’ where a higher proportion of working-age individuals relative to dependents can boost productivity and, if managed well, drive economic development. For the Philippines, this demographic dividend offers a unique opportunity to harness the productivity of its young population for national progress.
It’s not just the World Economic Forum that is optimistic about the Philippines’ future. A report by S&P Global also projects that the Philippines is on track to become a one trillion dollar economy by 2033. The report highlights the country’s extraordinary growth, driven by strong private consumption, government infrastructure spending, and improving remittance inflows. The IT-BPO sector, supported by a skilled workforce and English proficiency, is expected to continue its robust expansion.
The future looks bright for the Philippines, with vast opportunities on the horizon. Continued reforms, strategic investments, and the dynamic potential of its young population could propel the nation into a new era of economic prosperity.