Philippines could become a ‘breakout nation’
BY JUDY T. GULANE, Sub-Editor
IN A NEW economic era of crises and risk-averse investors, not all emerging markets will succeed in sustaining the high economic growth notched in the past decade, a Morgan Stanley executive said.
The Philippines is “among the countries expected to do better than expectations,” said Mr. Sharma, speaking by phone from Singapore yesterday, as long as the country focuses on reforms.
To qualify as a “breakout nation,” the Philippines has to rise above its 5% growth potential and achieve a higher economic growth average in the next three to five years — and over a decade.
Mr. Sharma explained that emerging market economies cannot be expected to post the high growth rates seen in a decade ago because the “easy money” that came in the wake of central bank rate cuts, and which drove growth higher, had dried up.
The prior decade was also marked by these emerging markets’ playing catch-up with the bigger economies after they were racked by crises in the 1980s to 1990s.
“The last decade is not likely to be replicated,” Mr. Sharma said. “Not everyone will be able to grow rapidly and the challenge is to identify which countries can do better than the rest.”
While interest rates in the United States and Europe are at historical lows at present, money is not going rapidly to emerging market economies because of risk aversion.