THE Philippine economy stands to benefit greatly from the integration of the Association of Southeast Asian Nations (Asean), which will expand in terms of population, organization, and its middle class segment by 2020, the head of Citibank Philippines said on Wednesday.
“Despite the current macroeconomic environment, Asean is still expected to show positive growth,” said Aftab Ahmed, CEO and Citi country officer of Citibank Philippines.
“In 2015-2016, it is projected to grow by about 4.3 percent,” he added
Speaking at The Manila Times’ 4th Business Forum held at Marriott Hotel Manila, in Pasay City, Ahmed said Asean’s demographics would continue to drive long-term growth, with the region’s population projected to grow from 630 million today to 699 million by 2020.
The “organization,” or financial companies, would also continue to grow from about 46 percent to 57 percent by 2020, he said, while the region’s middle class segment will grow from 190 million to 400 million by 2020 to 2030.
This will result in $2 trillion worth of financial transactions in the region, translating to 40 million new jobs, he said.
With this, Ahmed noted that opportunities for the Philippines are very rich, noting that by 2020, the country’s population is projected to grow by 1.7 percent, organization may grow 2.1 percent, and the middle class will expand by 2.4 percent.
These developments will open a wide range of opportunities for sectors such as real estate, transport, logistics and tourism, among others.
To realize these opportunities, Ahmed said the Philippines should focus primarily on infrastructure development, economic performance, human capital, and development of financial markets.
“The primary focus should be infrastructure development. I think the Philippines already has infrastructure, it also has strong macroeconomic scorecard, and has a very good story on human capital with strong remittances and business process outsourcing,” he said.
He added that the insurance sector must be developed in Asean and the Philippines, which are highly underinsured.
“Even though insurance premiums in both the life and non-life businesses are growing at a faster pace in developed markets, the base is still very small,” he said.