Philippine economy grows 6.7% in 2017

Philippine economic growth in the three months to December 2017 was at an annualized 6.6 percent clip, slower than the previous quarter’s 7.0 percent pace. (AFP)
Updated 23 January 2018

Philippine economy grows 6.7% in 2017

MANILA: The Philippine economy grew 6.7 percent in 2017, remaining one of Asia’s best performers despite a weaker business process outsourcing industry, the government announced Tuesday.
Government spending ensured the country remained one of Asia’s fastest-growing major economies, behind only China and Vietnam, Economic Planning Secretary Ernesto Pernia told reporters.
However he said last year’s growth was slower than the 6.9 percent gross domestic product (GDP) rise in 2016, when consumer spending was boosted during elections that propelled President Rodrigo Duterte to power.
But the 2017 figure was “a good performance,” Pernia said, with China having reported 6.9 percent 2017 GDP growth last week and Vietnam achieving a 10-year-high expansion of 6.81 percent over the same period.
Philippine economic growth in the three months to December 2017 was at an annualized 6.6 percent clip, slower than the previous quarter’s 7.0 percent pace.
The business processing outsourcing industry, worth $23 billion and employing 1.15 million people, was a “major contributing factor to this decline,” Pernia said.
The sector, which has become a major pillar of the Philippine economy, includes call centers and offices that carry out such functions for overseas companies as accounting, medical and legal transcription, software design, animation and even architecture.
Industry officials said investment fell 31.3 percent year-on-year in the three months to last June, with threats by US President Donald Trump to bring back jobs outsourced abroad cited as a key factor.
There was also concern in the Philippines that automation and artificial intelligence could eventually steal call-center jobs.
The Philippines’ fourth quarter growth was marginally lower than market expectations, said Sanjay Mathur, chief Southeast Asia and India economist for ANZ Research, adding the trade balance in the last two months of 2017 also deteriorated.
“The prospects for growth in the Philippines remain solid,” Mathur said, citing the passage last month of Duterte’s tax reform program designed to raise funds for infrastructure spending.
State spending should reinforce already strong domestic demand, Mathur added.
Pernia said the government remained confident it would hit its growth target range of 7-8 percent this year, powered by Duterte’s vow to raise spending on transport, energy, and water supply infrastructure.

Saudi oil refinery in Gwadar to help Islamabad save $3 billion a year

Updated 17 February 2019

Saudi oil refinery in Gwadar to help Islamabad save $3 billion a year

  • The refinery would produce up to 300,000 barrels per day once completed
  • Saudi Arabia is also setting up reservoirs for liquified natural gas in Pakistan, says Petroleum Minister Ghulam Sarwar Khan

ISLAMABAD: Pakistan expects to agree a deal to build an oil refinery and petrochemical complex at the Balochistani deep-sea Port of Gwadar, during the first state-level visit by Saudi Arabia’s Crown Prince Mohammed bin Salman.

The deal will see Pakistan join with Saudi Aramco to build the facility, expected to cost $10 billion.

“We are working on feasibility studies for the establishment of the oil refinery and petrochemical complex in Gwadar, and will be ready to start by early 2020,” Pakistan’s Minister for Petroleum Ghulam Sarwar Khan told Arab News on Thursday.

Once established, the project will help the South Asian nation cut its annual crude oil imports by up to $3 billion annually, in addition to creating thousands of job opportunities in the impoverished western province.

The country spends more than $16 billion each year on importing 26 million tons of petroleum products, including 800 million cubic feet of liquified natural gas (LNG) from Saudi Arabia, the UAE and other Gulf countries.

Khan claimed the refinery would produce up to 300,000 barrels per day once completed.

“The Saudi authorities have asked us to complete all the initial work on the project on a fast track, as they want to set it up as early as possible,” he said.

A Saudi technical team, including Energy Minister Khalid Al-Falih, has visited Gwadar twice in recent months to examine the site for the refinery, getting briefings from Pakistani officials on security in the area near the border with Iran.

“We will ensure complete security for Saudi investments and people working on the project. A detailed security plan has already been chalked up with help of the security agencies,” Khan added.

Pakistan currently has five oil refineries, but they can only satisfy half of its annual demand. Islamabad and Riyadh have long maintained strong ties, with the latter repeatedly offering the former financial assistance. Last year, the Kingdom guaranteed Pakistan $3 billion in foreign currency support for a year, and a further loan worth up to $3 billion in deferred payments for oil imports, to help stave off an economic crisis. The Islamic Republic also received $3 billion from the UAE to protect its foreign reserves.

Khan added that the Pakistani-Arab Refinery Co. (PARCO) was also setting up an oil refinery at Khalifa Point, near the city of Hub in Balochistan. 

“The work on this project is at an advanced stage. Land for it has been acquired and other formalities are being fulfilled,” he said.

Khan hopes the world’s perception of Pakistan will change upon completion of these deals, after years of war in the surrounding region. Exxon Mobil returned to Pakistan last month after 27 years, and started offshore drilling with $75 million of initial investments. 

“All results of the drilling are positive so far, and we expect huge oil and gas reserves to be discovered soon,” he said.

“More foreign companies are contacting us to invest in offshore drilling and exploration. Saudi Arabia is also setting up reservoirs for LNG in Pakistan. More Saudi investment will come to Pakistan with the passage of time.”