One of the most research-based and objective analysts of Asian economies is Dr. Jim Walker whom I have known for the past twenty years.  He gives advice to investors who have a special interest in Asia.  His company ASIANOMICS issues regular reports on the economies in the Asian region.  His latest report on the Philippine economy, after his interviewing dozens of both government officials and private sector business people and economists, is entitled Philippines:  An Extended Cycle (And it’s not over yet).  For the past three to four years, he has been very bullish about the Philippine economy, both the real economy and the stock market.  This latest report is a testimony to the legacy that President Benigno S. Aquino III is leaving to future generations of Filipinos.  Let me quote extensively from this very independent evaluation of what has been happening in our country over the last four to five years.

          “Perhaps it is no surprise that, according to the World Economic Forum Human Capital Report, the Philippines ranks number four in Asia behind Japan, Australia and New Zealand.  It is also the fourth largest shipbuilder in the world, something that came as rather a surprise to us.  Then there is the business process outsourcing sector which is number two in Asia behind India (the largest US company operating center in the Philippines employs 60,000 workers).  There are 3,300 to 3,500 companies operating out of Philippines Economic Zones (for the Japanese, they cannot find enough capacity).”  Mr. Walker then enumerates the other major engines of growth which are remittances of Filipino overseas workers and domestic tourism.  As of last count of the Department of Tourism, there are 40 million Filipinos who travel all over the Philippine Archipelago as domestic tourists, stimulating a great deal of consumption of goods and services. 

          He then gives a lot of credit to President Aquino for the improvement of governance through his serious campaign to eradicate corruption:  “Its focus has been largely on good governance—which is one of the reasons Philippine companies attain regional top ranking slots—and it has enacted changes to public procurement procedures and public infrastructure bidding processes that ensure that its legacy will live on.  For example, all tendering for public contracts now has to take place online and be open to public inspection.  Mr. Aquino and his cabinet are generally seen as being ‘clean’ politicians (in fact, this is probably the least scandal-hit Philippines administration we can remember in the last 25 years.”

          These observations of an independent foreign analyst is backed up by the findings of the National Competitiveness Council (NCC), a cooperative effort of the private sector and the Government to monitor Philippine competitiveness.  During the last four or five years, the NCC has observed that the Philippine economy has improved in 9 of the 12 global reports that measure competitiveness, such as those in the World Bank and International Finance Corporations’ Ease of Doing Business (up 53 notches), World Economic Forum (up 33 notches) and Transparency International’s Corruption Perception Index (up 49 notches).  Under the Index of Economic Freedom, the Philippines charted an upward trajectory with a total gain of 39 places from 115 in 2011 to 76 in 2015, making the Philippines the most improved ASEAN economy.

          I take special note of the conclusion of Mr. Walker about the future Government:  “Whoever succeeds Noynoy in next May’s presidential election—and it is far from clear who will run let alone who will win—the system and the country that  take over will be in much better shape to cope even with a “tradpol” being elected.  Given the advance of social media in the Philippines we doubt that malpractice and corruption would go unnoticed for too long anyway.”   Let me add my own observations about how difficult it will be for the next leader, whoever he or she is, to perpetrate corrupt practices.  Thanks to what President B. S. Aquino has institutionalized during his term, the next President and his executive team will have very little freedom of movement to be corrupt.  What with such institutional practices as SALN (Statement of Assets, Liabilities and Net worth), AMLA (Anti Money Laundering Act), the abolition of PDAF and DAF, independent bodies like the Central Bank, the Supreme Court, the COA, and the Ombudsman supplemented by the pro-active roles of the foreign chambers of commerce, the Makati Business Club, the Management Association of the Philippines and many other civil society organizations focusing on good governance!  I agree with Mr. Walker that there is little danger of the Philippines slipping back to its corruption-ridden past, also thanks to the tens of thousands of millennials who will use their Facebook and Twitter accounts, among others, to expose instantaneously any attempt at corrupt practices by top officials.  We have to thank President Noynoy Aquino for doing his best to set the stage for good governance in the next Administration.  For comments, my email address is bernardo.villegas@uap.asia.