MAPping the Future

Column in INQUIRER

Philippines Rising (Redux)

written by Dr. RAMON “Mon” B. SEGISMUNDO - June 3, 2024

There is electricity in the seeming rarefied air of the Stanford University campus. Two mantras always come to mind as I walk in its expansive campus with verdant trees and temperate weather.

One is, “Move fast and break things.” Serving as a vital cog in the Silicon Valley ecosystem, Stanford recognizes the value of speed as the new currency and the transformational impact of disruptive innovation.

The other is the German “Die Luft der Freiheit weht” translated as the “Winds of Freedom Blow.” Referred to as Stanford’s motto, it is the university’s institutional belief in freedom of thought, expression and inquiry as the cornerstones of education.

This was the backdrop of the Stanford Graduate School of Business student-led forum held the other week entitled “The Philippines is Back in Business” as part of an “Investing in Southeast Asia” series.

Sharing the stage with me are Stanford MBA graduate Earl Martin Valencia, member of the National Innovation Council chaired by the Philippine president, and Peter Maniego, chair of the Institute of Corporate Directors. Current Stanford MBA Paul Matthew Yap (ex-Boston Consulting Group in the Philippines) hosted the event and Stanford Masters of Management student Yueh Chinn Seah (and Singapore Ministry of Trade and Industry Deputy Director) organized the Southeast Asia series.

Recent developments much heralded in the global and local press, such as the Economist article on “Without fanfare, the Philippines is getting richer;” the recent launch by the United States, Japan and the Philippines of the Luzon Economic Corridor to significantly raise connectivity between Subic, Clark, Manila and Batangas; and the announcement of the $1.92-billion investment of the Copenhagen Infrastructure Partners in Northern Samar, all bode well for the country.

The need for storytelling

The panel speakers delivered positive yet realistic messages about investing in the Philippines. The country competes for foreign direct investments and every Filipino business leader has a responsibility to communicate narratives that attract investors and not deter them from coming.

We need “storytellers” who will tell the world that the Philippines is back in business and is worth a second look or a third. The nature of the world in this day and age is that today’s investment hot spot may be tomorrow’s flashpoint and today’s below-the-radar investment destination could be tomorrow’s tiger economy.

Therefore, the better storytellers bring their best foot forward for our country. When this is done, there will be greater agency—that sense of having some control over the destiny of the country—and ownership for the country’s fortunes. The alternative of not doing this results in a sense of helplessness and disempowerment. The panel was one in doing the former.

Seizing opportunities

The panel outlined the many opportunities available to investors. These are outlined below.

• KPO: Building on the successful business process outsourcing (BPO) space to further develop and expand knowledge process outsourcing (KPO).

• Renewable energy: This is now possible with 100 percent foreign ownership in this sector.

• Tourism: With the best beaches in the planet and a location that is ground zero for the Coral Triangle, how can the Philippines go wrong with our current and future efforts in infrastructure development being addressed?

• Manufacturing: Electronics, semiconductors and critical minerals as part of a national industrial policy.

• Manufacturing services: There is the potential to become a regional hub for logistics and manufacturing leveraging on the Luzon Economic Corridor.

• Infrastructure: A few days ago, the President asked foreign investors to participate in public-private partnerships, engineering, procurement and construction contracts, as well as feasibility studies.

• Technology and nontechnology startups: This could include encouraging a golden age of Filipino entrepreneurship and accelerating the democratization of opportunities to create an abundance of micro, small and medium enterprises as well as startups.

Strengthening resilience

Through the years, the ability of the Philippines to withstand external global and regional shocks is noteworthy. As earlier highlighted, the current population provides a consumer base that could keep the economy robust.

The remittances of overseas Filipino workers (OFWs) back to the country somehow insulate the Philippines from unpredictable and uncertain setbacks. It is considered “Trump proof” with its steady stream of OFW remittances that was $33.5 billion in 2023, or roughly 9 percent of gross domestic product for that year. In a world in which the citizens of developed economies are rapidly aging, the Philippines remains in a demographic sweet spot with a young and energetic labor force.

Embedding governance— integrity, competence and accountability

The opportunities outlined previously will not be realized without embedding integrity, competence and accountability in all that we do at various levels of our organizations—whether the public sector, the private sector and civil society/nongovernmental organizations.

There are sufficient role models in our society who demonstrate that the key to the sustained Philippines’ rise is continuing leadership and management effectiveness across the board. This results in better governance of institutions with integrity, competence and accountability as the foundation.

With a positive story to communicate to the world, a list of exciting opportunities, an inherent strength of resilience, a reform mindset and orientation and a growth of 6 percent a year since 2012 (except during the pandemic), the Philippines has what it takes to be an upper middle country.

All of us have to remain steadfast and be vigilant. A lot of hard work remains but there is a strong rationale to be cautiously optimistic.

This opportunity cannot be missed.

The author is a member of the Management Association of the Philippines (MAP) Shared Prosperity Committee. He is a 2023-2024 fellow of the Stanford University Distinguished Careers Institute. He holds a Doctorate in Business Administration from the Singapore Management University. He is the CEO of Singapore-based OneHRX.