Text CC Engine

The Asian Development Bank released recently its annual opus on the region's economic outlook. For the Philippines, the ADB expects GDP growth to accelerate to 5.7% in 2008, from a forecast of 5.4% in 2007 and the actual 5.4% achieved in 2006.

One line to note. The ADB says that for 2006:

Transport and communications, finance, and private services, including business process outsourcing and other information technology-enabled services, led the way in the services sector, which grew by 6.3% and accounted for 3 percentage points of total GDP growth.

Let's translate that. What the economists are saying is that the engine of the current economic expansion is "Text-CC" combine: the vibrant domestic telecommunications industry that's made the Philippines the text capital of the world, and those call centers sprouting like mushrooms in every major city.

What's holding back the economy from doing "Eight in o-Eight?"

Inadequate investment is the main factor that has curtailed growth and employment. The medium-term targets, for example, were based on investment picking up at double-digit annual rates in 2006–2010 to reach 28% of GDP by 2010, almost twice the current level.

In agriculture, which accounts for 36% of employment, investment has been weak because of factors that include farmers’ poor access to credit and support services, expensive inputs, high costs of transport, and the incomplete land reform program.

In manufacturing, sampled firms in a 2003 survey of the investment climate cited as the major constraints: macroeconomic instability (at that time) and uncertainty in economic policies; inadequate infrastructure services, especially of power and transport; and corruption and the costs of complying with regulations, especially related to customs, trade, and labor markets.