The Philippine economy will remain resilient in the next couple of years but the country should not rely too much on the business process outsourcing industry to sustain growth, Hongkong and Shanghai Banking Corp. said over the weekend.
The British bank said in a report that economic expansion would continue despite the threats of protectionist policies of US President Donald Trump on the business process outsourcing sector and remittances from Filipino workers.
“We expect remittances and consumption to remain as resilient drivers of growth in 2017. There are currently fears among some investors that a change to immigration policies in the US may impact remittances [the US is the largest contributor to total remittances],” the bank said.
HSBC said that was the case last year when there were fears of a slump in Middle East remittances which never materialized. The status of Filipinos in the US was unlikely to be significantly impacted by any new policy, it said.
The bank said concerns about the impact of protectionist US policies on the Philippines’ business process outsourcing sector were understandable, but “our base case is for Philippines economic growth to remain robust over the next two years, though over the longer term the Philippines needs to diversify away from BPO to ensure more sustainable growth,” it said.