Experts: Economy will do well whoever wins in May polls

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(L-R) Jeff Ng and Benjamin Diokno

Metro Manila (CNN Philippines) — Presidential candidates have all promised robust economic growth if they win.

But according to experts, the economy will continue to do well, no matter the outcome of the elections in May.

Standard Chartered regional economist Jeff Ng says growth is driven by more fundamental factors in the economy.

"You have solid household spending, remittances from overseas workers and emerging service industries," Ng told CNN Philippines on Friday (April 22).

University of the Philippines economist Benjamin Diokno agrees, saying the gross domestic product (GDP) — the broadest measure of the economy — will still grow above average in the near future.

"I'm not ruling out 6% GDP growth for the first three years of the next president," Diokno said also on Friday.

Though the Philippines grew at its fastest under President Benigno S. Aquino III's administration, Diokno dismissed the notion that the economy's fortunes were tied to any one politician.

"They say it is the Aquino factor. I don't think it is the Aquino factor. It is more foreign direct investments and OFW (overseas Filipino worker) remittances."

From 2002 to 2009, GDP growth averaged about 5%. The average rose to 6% from 2010 to 2015 — Aquino's term. The government is targeting even higher GDP growth of 6.8-7.8% this year.

Poll impact limited

While some analysts have warned that the national elections — and the political uncertainty they bring — could scare away foreign investors this year, Ng was more optimistic.

He said the Philippines had weathered worse storms before, such as the global financial crisis and the economic downturn of many of its trading partners. Yet, it still emerged as one of the fastest-growing countries in Asia.

"I think the fact that the Philippines has performed so well in the last five years amid a very uncertain global environment, the global investors as well as the rating agencies will continue to look forward to sustained progress," Ng said.

The elections could even provide a slight 0.1-0.3% uptick to GDP growth. Manufacturing, media, utilities and transport could all receive a boost as national and local candidates campaign from February to May.

This could prove useful as the global economy struggles this year, Ng said. Falling oil prices have dragged down oil investments in the United States, while Chinese demand is weakening.

The Association of Southeast Asian Nations (ASEAN) holds potential since the bloc's production capacity could rival China's, he added. But linkages still need to be built between its member countries, and this will likely be a long-term project.

BPO rises above the rest

Given a weak external environment, the economy must look inwards to sustain its momentum.

Ng said the business process outsourcing (BPO) industry had been one of the most important contributors to the Philippine growth story.

The sector had expanded twice as fast as the entire economy, he explained. It had also provided full-time work to many Filipinos, helping bring down unemployment from 8% to 6% of the population.

More importantly, BPO receipts bring in much-needed dollars to the Philippines. Ng said by next year, the sector could even overtake OFW remittances as the country's largest source of foreign currency.

Diokno cautions, however, that the industry could hit a ceiling because of a lack of skilled workers.

"This is why we need to invest in our health and education. We need to create an ample, able workforce," he said.