03 April 2014

PHL Among the 10 Emerging Economies

The country is really on a roll when it comes to economic growth. We have not seen rapid development in years, which could be attributed to President Benigno Aquino III's policy of getting rid of several corrupt officials, agencies and practices as well as cracking the whip on illicit black market trading.

Recent reports from Aurélia End of Agence France-Presse revealed that Philippines is among 10 countries set to take over as emerging economies from the powerful BRICS nations as they struggle with growing pains, a French credit body.

"After 10 years of frenetic growth" the big five emerging economies of Brazil, Russia, India, China and South Africa -- the BRICS -- "are slowing down sharply," the French trade credit and insurance group Coface said.

In a report entitled "Coface identifies 10 emerging countries hot on the heels of the BRICS," the organization said that average economic growth by the BRICS this year would be 3.2 percentage points less than the average in the last 10 years.

But "at the same time, other emerging countries are accelerating their development," it said.

The growth of emerging economies and the effect this has on world trade flows is closely analysed by economists because of the huge impact on every aspect of the global economy and power balances.

Coface broke the 10 new emerging economies it has identified into two groups.

The first comprises Peru, the Philippines, Indonesia, Colombia and Sri Lanka, which it named the PPICS.

They had "strong potential confirmed by a sound business environment," Coface said.

The second group comprises Kenya, Tanzania, Zambia, Bangladesh and Ethiopia.

But these countries are marked by "very difficult or extremely difficult business environments which could hamper their growth prospects," Coface said.

However, the head of country risk at Coface, Julien Marcilly, said that in 2001 "the quality of governance in Brazil, China, India and Russia was comparable to that of Kenya, Tanzania, Zambia, Bangladesh and Ethiopia today."

But the 10 "new emerging countries" currently accounted for only 11.0 percent of the world population whereas the BRICS had accounted for 43 percent of the population in 2001.

The total gross domestic product of the new 10 was only 70 percent of the output of the BRICS in 2001, and they had a current account deficit of about 6.0 percent of GDP whereas the BRICS had run a surplus on average.