Economy of the Philippines
| Economy of the Philippines | |
|---|---|
Makati Skyline |
|
| Currency | Philippine peso (PHP) = 100 centavos (English) piso = 100 sentimo (Filipino) |
| Fiscal year | Calendar year |
| Trade organizations | APEC, ASEAN, WTO |
| Statistics | |
| GDP |
$161.0 billion (2009) (nominal; 48th) $320.4 billion (2009) (PPP; 36th) |
| GDP growth | 7.9% (2010 2nd Quarter) [1] |
| GDP per capita |
$1,746 (2009) (nominal; 122nd) |
| GDP by sector | agriculture (14.9%), industry (29.9%), services (55.2%) (2009 est.)[2] |
| Inflation (CPI) | 0.7% (September 2009) [3] |
| Population below poverty line |
32.9% (2006 est.)[2], approx. 22% (2001-2006)[4] |
| Gini index | 45.8 (2006)[2] |
| Labor force | 37.89 million (2009 est.)[2] |
| Labor force by occupation |
services (51%) agriculture (34%), industry (15%) (2009 est.)[2] |
| Unemployment | 7.6% (July 2009)[5] |
| Main industries | electronics assembly, garments, footwear, pharmaceuticals, chemicals, wood products, food processing, petroleum refining, fishing[2] |
| Ease of Doing Business Rank | 144th[6] |
| External | |
| Exports | $37.2 billion (2009 est.)[2] |
| Export goods | semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, fruits |
| Main export partners | US 17.6%, Japan 16.2%, Netherlands 9.8%, Hong Kong 8.6%, China 7.7%, Germany 6.5%, Singapore 6.2%, South Korea 4.8% (2009 est.)[2] |
| Imports | $45.8 billion (2009 est.)[2] |
| Import goods | electronic products, mineral fuels, machinery and transport equipment, iron and steel, textile fabrics, grains, chemicals, plastic[2] |
| Main import partners | Japan 12.5%, US 12%, China 8.8%, Singapore 8.7%, South Korea 7.9%, Taiwan 7.1%, Thailand 5.7% (2009 est.)[2] |
| Gross external debt | $147 bn (December 31, 2008) |
| Public finances | |
| Public debt | $94.27bn (58.7% of GDP) (2009 est.)[2] |
| Revenues | $23.29bn |
| Expenses | $29.23 billion (2009 est.)[2] |
| Economic aid | recipient. ODA, $561.7 million (2007[update]) |
| Main data source: CIA World Fact Book All values, unless otherwise stated, are in US dollars |
|
The economy of the Philippines is the 4th largest economy in South East Asia the 36th largest economy in the world by purchasing power parity according to the International Monetary Fund in 2009. A newly industrialized emerging market economy, it posted a real GDP growth rate of 5.3% in 2006 and 7.1% in 2007. Growth slowed to 3.8% in 2008 as a result of the global financial crisis. In 2009, the real growth rate was 1.1%.[2][5] Analysts were stunned by a surprise boom of the economy to 7.3% from an expected 3.6% forecast for the first quarter of 2010[7]. On the first half of 2010 (Second Quarter), the GDP growth grew again higher than expected by 7.9%[1].
A mixed economic system, important sectors of the Philippine economy include agriculture and industry, particularly food processing, textiles and garments, and electronics and automobile parts. Most industries are concentrated in the urban areas around metropolitan Manila, while metropolitan Cebu is also becoming an attraction for foreign and local investors in recent dates. Mining also has great potential in the Philippines, which possesses significant reserves of chromite, nickel, and copper. Recent natural gas finds off the islands of Palawan add to the country's substantial geothermal, hydro, and coal and oil exploration energy reserves.
Contents |
History
Since the end of World War II, the Philippine economy has been very turbulent. Initially a fast growing economy, the Philippines was one of the richest countries in Asia (following Japan).
During the regime of Ferdinand Marcos the economy grew at a rate consistently slower than the years preceding and following him, destabilized by corruption. Marcos embezzled billions of dollars from the national treasury. By the time of the People Power revolution, the economy had declined, falling severely below the growth of other nations in Southeast Asia. A severe recession in 1984-85 saw the economy shrink by more than 10%, and perceptions of political instability during the Aquino administration further damped economic activity. Fidel V. Ramos managed to briefly uplift the economy during his term as president, posting one of the Philippines' highest GDP growth rates.
In 1998, the Philippine economy deteriorated again as a result of spill over from the Asian financial crisis, although not as much as other Asian nations, and a wave of natural disasters also dragged the economy down. Growth fell to about -0.6% in 1998 from 5.2% in 1997, but recovered to 3.4% by 1999. President Joseph Estrada attempted to resist protectionist measures, and efforts to continue the reforms begun by the Ramos administration made significant progress. A major bank failure in April 2000 and the political disturbance following the impeachment and subsequent departure of President Estrada in the beginning of 2001 led to lower growth.
The administration under President Gloria Macapagal-Arroyo has pushed toward faster and more rapid economic growth. In recent years, Arroyo's stance towards economic improvement since 2004 has seen the Philippines re-emerge as one of the growing economies in Southeast Asia. In 2004, the Philippine economy grew by 6.1%, beating most analysts and even the government's estimates. In 2005, the Philippine peso posted an appreciation rate of 6%—the fastest in the Asian region for that year. However, higher oil prices led to growth amounting to 5.1%. The Philippines is still faced with the challenge of generating income internally, as it has the third-highest rate of remittances from overseas in the world. During 2006, the economy posted a 5.4% growth, dampened by two typhoons which wreaked havoc on the agricultural sector. The government plans to bolster infrastructure spending in 2007 tenfold, and is targeting an accelerated growth of the economy by 7% in 2007, 8% in 2008, and 9% in 2009 well as improved domestic improvement. President Arroyo envisions that by 2020 the Philippines would be a First World country.
The local stock market hit a record high in June 1, 2007 while the peso was trading at around PHP41.31 to a US dollar, making it then Asia's best performing currency by sharply appreciating nearly 19%.}[8] As of April 2009, the peso is trading at around 47.45:$1. As of April 2010[update], Peso is trading at around Philippine Peso 44.24:$1.[9]
On January 31, 2008, Philippine 2007 GDP grew 7.3%, the fastest in 31 years: its economy grew seasonally adjusted 1.8%, faster than expected in the 4th quarter while inflation was tamed at 2.8% amidst sharp increases in oil prices; Frederic Neumann, HSBC economist stated that: "Evidently economic momentum is very strong, therefore if we see a slowdown in economic growth, it would only materialize in the second half of the year. We therefore see a reduced need for the central bank to cut rates aggressively now and we might see that today with a 25 basis point cut."[10]
In 2009, the nominal GNP Per capita was US $ 1,746 and the PPP GNP Per capita was US$ 3,521. The total nominal GNP was US $ 167 billion and the total PPP GNP was US $ 320 billion.
Balisacan and Hill (2003[11] and 2007[12]) give a comprehensive account of the Philippine economy during the past four decades. Capitalism is also the cause of the fast growing economy. Specifically, readers may refer to the first chapter of the 2003 volume for a historical account of Philippine economic development, and the first chapter of the 2007 volume for an account of the regional and geographic development dynamics.
Macro-economic trend
This is a chart of trend of gross domestic product of Philippines at market prices estimated by the International Monetary Fund with figures in millions of Philippine pesos.[13]
| Year | GDP Millions of PhP |
PhP:US$ | Implied PPP PhP:US$ |
Per Capita Income (as % of USA) |
In US$ |
|---|---|---|---|---|---|
| 1980 | 671,573 | 7.51 | 2.234 | 5.47 | 89,423,834,866 |
| 1985 | 562,178 | 18.61 | 4.507 | 3.17 | 30,208,382,590 |
| 1990 | 718,114 | 24.33 | 5.742 | 3.09 | 29,515,577,476 |
| 1995 | 1,104,985 | 25.24 | 8.1 | 3.98 | 43,779,120,443 |
| 2000 | 994,291 | 44.19 | 10.998 | 2.85 | 22,500,362,072 |
| 2005 | 1,159,207 | 55.09 | 12.755 | 2.76 | 21,042,058,449 |
| 2006 | 1,297,867 | 54.23 | 13.344 | 3.16 | 23,932,638,760 |
| 2007 | 1,455,301 | 52.43 | 13.838 | 4.49 | 27,757,028,418 |
Sectors
As a newly industrialized nation, the Philippines is still an economy with a large agricultural sector, however services are beginning to dominate ASEAN. Much of the industrial sector is based on manufacturing electronics and other high-tech components, usually from American corporations.
Government Sector
The proposed national government budget for 2011 has set the following budget allocations[14]
| Budget Allocation | Millions of Pesos (PhP) |
Millions of US Dollars (US$) |
|---|---|---|
| Department of Education | 207,300 | 4,573 |
| Deparment of Public Works and Highways | 110,600 | 2,439.8 |
| Department of National Defense | 104,700 | 2,309.7 |
| Department of Interior and Local Government | 88,200 | 1,945.7 |
| Department of Agriculture | 37,700 | 831.7 |
| Department of Social Welfare and Development | 34,300 | 756.7 |
| Department of Health | 33,300 | 734.6 |
| Department of Transportation and Communications | 32,300 | 712.5 |
| State Universities and Colleges | 23,400 | 516.2 |
Private Sector
Industrial production is centered on processing and assembly operations of the following: food, beverages, its production yield to meet domestic demands. The Philippines currently hosts the International Rice Research Institute (IRRI), which studies high yielding rice varieties. It has played a key role in the Green soil Revolution and was able to increase rice yields and rice production during the 1970s .[15]
Automotive
The ABS used in Mercedes-Benz, BMW, and Volvo cars are made in the Philippines. Ford, Toyota, Mitsubishi, and Nissan are the most prominent automakers that make cars in the country. A 2003 Canadian market research report predicted that further more investments in this sector were expected to grow in the next following years. Toyota has been the most used vehicle in the country.[16]
Electronics
Intel has been in the Philippines for 28 years as major producer of Intel's advanced products including the Pentium 4 processor. A Texas Instruments plant in Baguio has been operating in for 20 years and is the largest producer of DSP chips in the world [17]. Texas Instruments' Baguio plant produces all the chips used in Nokia cell phones and 80% of chips used in Ericsson cell phones in the world. Until 2005, Toshiba laptops were produced in Santa Rosa, Laguna. Presently the Philippine plant's focus is in the production of HDD's. Printer manufacturer Lexmark has a factory in Mactan Island in the Cebu region.
Pharmaceuticals
Outsourcing
The Philippines is Asia-Pacific’s second-largest call center market, next to India, according to a June 2008 study released by Oracle Corp.
The majority of the top ten BPO firms of the United States operate in the Philippines. Total jobs in the industry grew to 100,000 and total revenues are placed at $960 million for 2005. Majority of the BPO facilities are in Metro Manila and Cebu City although other regional areas such as Baguio City, Bacolod City, Cagayan de Oro, Tacloban City, Clark (Angeles City), Dagupan City, Davao City, Dumaguete City, Lipa City, Iloilo City and Legazpi City are now being promoted and developed for offshore operations.
Mining
The country is rich with mineral and thermal energy resources. In 2003, it produced 1931 MW of electricity from geothermal sources (27% of total electricity production), second only to the United States,[18] and a recent discovery of natural gas reserves in the Malampaya Oil fields off the island of Palawan is already being used to generate electricity in three gas-powered plants. Philippine gold, nickel, copper and chromite deposits are among the largest in the world. Other important minerals include silver, coal, gypsum, and sulfur. Significant deposits of clay, limestone, marble, silica, and phosphate exist. About 60% of total mining production are accounted for by non-metallic minerals, which contributed substantially to the industry's steady output growth between 1993 and 1998, with the value of production growing 58%. In 1999, however, mineral production declined 16% to $793 million. Mineral exports have generally slowed since 1996. Led by copper cathodes, Philippine mineral exports amounted to $650 million in 2000, barely up from 1999 levels. Low metal prices, high production costs, lack of investment in infrastructure, and a challenge to the new mining law have contributed to the mining industry's overall decline.
The industry rebounded starting in late 2004 when the Supreme Court deemed an important law permitting foreign ownership of Philippines mining companies constitutional.
The Department of Environment and Natural Resources (DENR) is ill equipped to address the renewed interest in mining. There are several companies that mine under the Small Scale Mining (SSM) that should rightly be classified and taxed under the large scale mining laws. The DENR is taking some time to inform these companies that they are violating the SSM laws by mining more than 50,000 tons of ore per year.
The DENR has yet to approve the revised Department Administrative Order (DAO) that will provide the Implementing Rules and Regulations of the Financial and Technical Assistance Agreement (FTAA), the specific part of the 1994 Mining Act that allows 100% foreign ownership of Philippines mines. The current DAO 99-56 is deficient because it is confusing and open to abuse.
Transportation
Transport of people, goods and services in the country is done mostly by motorized vehicles, boats and planes. Land transportation vehicles are imported, except for the jeepney and tricycle which are locally created.
Statistics
| Economic Growth[19] | ||
|---|---|---|
| Year | % GDP | % GNP |
| 2000 | 4.5 | 4.8 |
| 2001 | 3.2 | 3.4 |
| 2002 | 4.6 | 5.2 |
| 2003 | 4.7 | 5.6 |
| 2004 | 6.0 | 6.2 |
| 2005 | 5.0 | 5.6 |
| 2006 | 5.4 | 6.2 |
| 2007 | 7.3 | 7.8 |
| 2008 | 3.8 | 6.2 |
| 2009 | 0.9 | 3.0 |
| 2010Q1 | 7.3 | 8.4 |
| 2010Q2 | 7.9 | 10.1 |
| * Computed at Constant 1985 Prices | ||
| ** Source: NEDA | ||
(All numbers in US Dollars)
- GDP - purchasing power parity: $324.8 billion (2009 est.)[2]
- GDP - real growth rate: 0.9 % (2009)
- GDP PPP: $320.4 billion (2009 est.)
- GDP - per capita purchasing power parity: $3,521 (2009 est.)
- GDP nominal: $167.0 billion (2009 est.)
- GDP per capita: $1,746[2]
- GDP - composition by sector:
- agriculture: 34%
- industry: 15%
- services: 51% (2009 est.)[2]
- Population below poverty line: [2] 32.9% (2006 est.) [2]
- Household income or consumption by percentage share:
- lowest 10%: 2.4%
- highest 10%: 31.2% (2006)[2]
- Inflation rate (consumer prices): 3.2% (2009 est.)[2], 0.7% (September 2009)[3]
- Labor force: 37.89 million (2009 est.)[2]
- Labor force by occupation:
- agriculture 34%
- industry 15%
- services 51% (2009 est.)[2]
- Unemployment rate: 7.5% (2009)[3]
- Industries: electronics assembly, garments, footwear, pharmaceuticals, chemicals, wood products, food processing, petroleum refining, fishing
- Industrial production growth rate: -2% (2009 est.)[2]
- Electricity - production: 56.57 billion kWh (2007 est.)[2]
- Electricity - consumption: 48.96 billion kWh (2007 est.)[2]
- Electricity - exports: 0 kWh (2007)[2]
- Electricity - imports: 0 kWh (2007)[2]
- Agriculture - products: sugarcane, coconuts, rice, corn, bananas, cassavas, pineapples, mangoes; pork, eggs, beef; fish[2]
- Exports: $48.2 billion f.o.b. (2008 est.)[2]
- Exports - commodities: semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, fruits[2]
- Exports - partners: United States 17.6%, Japan 16.2%, Netherlands 9.8%, Hong Kong 8.6%, China 7.7%, Germany 6.5%, Singapore 6.2%, South Korea 4.8% (2009 est.)[2]
- Imports: $45.8 billion (2009 est.)[2]
- Imports - commodities: electronic products, mineral fuels, machinery and transport equipment, iron and steel, textile fabrics, grains, chemicals, plastic[2]
- Imports - partners: Japan 12.5%, United States 12%, China 8.8%, Singapore 8.7%, South Korea 7.9%, Taiwan 7.1%, Thailand 5.7% (2009 est.)[2]
- Debt - external: $53.14 billion (30 September 2009 est.)[2]
- Currency: 1 Philippine peso (P) = 100 centavos
- Exchange rates: Philippine pesos (PHP) per US dollar - 47.8 (2009), 44.439 (2008), 46.148 (2007), 51.246 (2006), 55.086 (2005)[2]
- Fiscal year: Calendar year
See also
- Action For Economic Reforms (Research and public interest organization in the Philippines)
- Bangko Sentral ng Pilipinas
- Communications in the Philippines
- Department of Finance
- Department of Trade and Industry
- List of companies of the Philippines
- Next Eleven
- Newly Industrialized countries
- Philippine Dealing Exchange
- Philippine peso
- Philippine Stock Exchange
References
- ↑ 1.0 1.1 RP 2Q GDP grows by 7.9%; widest since 2007
- ↑ 2.00 2.01 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27 2.28 2.29 2.30 2.31 2.32 2.33 2.34 2.35 2.36 2.37 2.38 CIA World Factbook, Philippines, Retrieved 15 May 2009
- ↑ 3.0 3.1 3.2 "Philippines in Figures". National Statistics Office, Republic of the Philippines. http://census.gov.ph/. Retrieved 2009-10-31.
- ↑ "17. Poverty-and-inequality". Statistical Yearbook for Asia and the Pacific 2008. United Nations : Economic and Social Commission for Asia and the Pacific. 2008. http://www.unescap.org/stat/data/syb2008/17-poverty-and-inequality.asp(Figure 17.1).
- ↑ 5.0 5.1 International Monetary Fund. (April 2010). World Economic Outlook Data, By Country – Philippines: [selected annual data for 1980–2015]. Retrieved 2010-05-29 from World Economic Outlook Database.
- ↑ "Doing Business in Philippines 2010". World Bank. http://www.doingbusiness.org/ExploreEconomies/?economyid=153. Retrieved 2010-08-20.
- ↑ Philippine economy booms with 7.3 percent GDP growth. (2010).
- ↑ Doris Dumlao, Peso defies regional decline, hits 41.31:$1 (12/13/2007), Philippine Daily Inquirer.
- ↑ PHP-USD Currency Conversion rates for 15 April 2009, Oanda.com
- ↑ Economy grew 7.3% in 2007, fastest in 31 years. (2008-01-31). Philippine Daily Inquirer. Retrieved 2010-07-19.
- ↑ Balisacan, Arsenio; Hal Hill (2003), The Philippine Economy: Development, Policies, and Challenges, New York: Oxford University Press, pp. 496, ISBN 9780195158984, http://www.oup.com/us/catalog/general/subject/Economics/Developmental/Regional/?view=usa&ci=9780195158984
- ↑ Balisacan, Arsenio; Hal Hill (2007), The Dynamics of Regional Development: The Philippines in East Asia, Cheltenham, UK: Edward Elgar, http://www.adbi.org/files/2007.01.30.book.dynamic.regional.development.charts.pdf
- ↑ Report for Selected Countries and Subjects (Philippines), International Monetary Fund Market chorbs, http://www.imf.org/external/pubs/ft/weo/2006/01/data/dbcoutm.cfm?SD=1980&ED=2007&R1=1&R2=1&CS=3&SS=2&OS=C&DD=0&OUT=1&C=566&S=NGDP_RPCH-NGDP-NGDPD-NGDPPC-NGDPDPC-PPPWGT-PPPSH-PPPEX&CMP=0&x=85&y=17, retrieved 2007-12-11
- ↑ "President Aquino's 2011 Budget Message". http://www.gov.ph/2010/08/24/president-aquinos-2011-budget-message. Retrieved 2010-08-24.
- ↑ "Rough Rice Production by country and geographical region 1961-2004" (PDF). International Rice Research Institute. http://www.irri.cgiar.org/science/ricestat/pdfs/WRS2005-Table01.pdf. Retrieved 2006-08-27.
- ↑ Justin Oslowski (March 25, 2003), Automotive Production in the Philippines, Industry Canada, http://strategis.ic.gc.ca/epic/site/imr-ri.nsf/en/gr115011e.html, retrieved 2007-12-11
- ↑ The positive outlook to the Philippines, philnews.com, http://www.philnews.com/2005/ma.html, retrieved 2007-12-11
- ↑ Tester, Jw; Anderson, Bj; Batchelor, As; Blackwell, Dd; Dipippo, R; Drake, Em; Garnish, J; Livesay, B; Moore, Mc; Nichols, K; Petty, S; Toksoz, Mn; Veatch, Rw; Baria, R; Augustine, C; Murphy, E; Negraru, P; Richards, M (Apr 2007), "Geothermal Energy Systems", Philosophical transactions. Series A, Mathematical, physical, and engineering sciences (ResLab, Australia) 365 (1853): 1057–94, doi:10.1098/rsta.2006.1964, PMID 17272236, http://reslab.com.au/resfiles/geo/text.html, retrieved 2007-12-11 (from internet archive)
- ↑ National Economic Development Authority, GDP and GNP Year on Year, National Economic Development Authority, http://www.neda.gov.ph/econreports_dbs.asp, retrieved June 2010
- ↑ Most statistics sourced from CIA World Factbook - Philippines, Retrieved on 15 May 2010.
External links
- State of the Philippine Islands A book written by a Spaniard during the early 1800s that studies the economic conditions of the Philippines which was then, a colony of Spain. An online book published by Filipiniana.net.
- Bangko Sentral ng Pilipinas (Central Bank of the Philippines)
- National Statistical Coordination Board
- Department of Trade and Industry
- Department of Finance
- Philippine Stock Exchange
- National Federation of Sugarcane Planters
- Department of Tourism
- Philippines Business Brokers
- Philippine Economic Zone Authority
|
||||||||
|
|||||
|
||||||||||||||
|
|||||||||||||||||||||||||||||
