Economy of the Philippines

Economy of Philippines
Skyline of Metro Manila
Currency	Philippine peso (PHP) = 100 centavos (English) piso = 100 sentimo (Filipino)
Fiscal year	Calendar year
Trade organizations	APEC, ASEAN, WTO, and others
Statistics
GDP	$216.1 billion (2011 est.)[1] (nominal 43rd) $394.0 billion (2011 est.)[1] (PPP 31st)
GDP growth	7.6% (2010)[2]
GDP per capita	$2,255 (2011 est.)[3] (nominal 122nd) $4,111 (2011 est.)[3] (PPP 125th)
GDP by sector	agriculture (13.9%), industry (31.3%), services (54.8%) (2010 est.)[1]
Inflation (CPI)	4.8% (November 2011)[4]
Population below poverty line	national – 32.9% (2006 est.)[1] international – 22.6% (2006)[5] regional – 27% (2006)[6]
Gini index	45.8 (2006)[1]
Labor force	41.2 million (October 2011)[1]
Labor force by occupation	services (52%) agriculture (33%), industry (15%) (2010 est.)[1]
Unemployment	6.4% (October 2011)[7]
Main industries	electronics assembly, garments, footwear, pharmaceuticals, chemicals, wood products, food processing, petroleum refining, fishing[1]
Ease of Doing Business Rank	136th[8]
External
Exports	$51.4 billion (2010)[1]
Export goods	semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, fruits[1]
Main export partners	Japan 12.5%, Netherlands 9.8%, Hong Kong 8.6%, China 7.7%, Germany 6.5%, Singapore 6.2%, South Korea 4.8% (2009 est.)[1]
Imports	$54.7 billion (2010)[1]
Import goods	electronic products, mineral fuels, machinery and transport equipment, iron and steel, textile fabrics, grains, chemicals, plastic[1]
Main import partners	Japan 12.5%, United States 12%, China 8.8%, Singapore 8.7%, South Korea 7.9%, Republic of China 5.7% (2009 est.)[1]
Gross external debt	$55.416 billion (1st Quarter, 2010)[9]
Public finances
Public debt	$104.59 billion (52.4% of GDP) (2010)
Revenues	$26.84 billion
Expenses	$33.82 billion (2010 est.)[1]
Economic aid	$561.7 million ODA recipient. (2007[update])
Credit rating	Standard & Poor's:[10] BB+ (Domestic) BB (Foreign) BB+ (T&C Assessment) Outlook: Positive[11] Moody's:[12] Ba2 Outlook: Stable Fitch:[12] BB Outlook: Stable
Main data source: CIA World Fact Book All values, unless otherwise stated, are in US dollars

The Economy of the Philippines is the 43^rd largest in the world, according to the World Bank with an estimated 2010 gross domestic product (nominal) of $200 billion, it is estimated that by the year 2050 it will land on the 14^th. Primary exports include semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, and fruits. Major trading partners include the United States, Japan, China, Singapore, South Korea, the Netherlands, Hong Kong, Germany, Taiwan, and Thailand. A newly industrialized country, the Philippine economy has been transitioning from one based on agriculture to one based more on services and manufacturing. The Goldman Sachs includes the country in its list of the Next Eleven economies.

Contents 1 Macro-economic trend 2 Government budget 3 Private sector 3.1 Automotive 3.2 Electronics 3.3 Mining and natural resources 3.4 Outsourcing 4 Economic indicators and international rankings 5 Statistics 6 See also 7 References 8 Further reading 9 External links

Macro-economic trend

A chart of selected statistics showing trends in the gross domestic product of the Philippines using data taken from the International Monetary Fund.^[13][14]

Year	GDP in millions of PHP (current prices)	PHP:US$	Implied PPP PHP:US$ (current)	GDP per capita as % of US (current prices)	GDP per capita as % of US (PPP)
1980	243,749	7.51	4.044	5.48	10.18
1985	571,883	18.60	7.902	3.18	7.54
1990	1,074,510	24.32	9.975	3.1	7.55
1995	1,905,951	25.23	14.076	3.97	7.11
2000	3,580,714	44.19	18.789	2.8	6.58
2005	5,677,750	55.09	21.755	2.72	6.88
2006	6,271,157	51.31	22.158	3.01	-
2007	6,892,721	46.01	22.172	3.48	-
2008	7,720,903	44.32	23.346	3.91	-
2009	8,026,143	47.64	23.620	3.76	-
2010	8,513,037	45.11	24.23	4.24	7.90

GDP growth at constant 1985 prices in Philippine pesos:^[3][13][15]

Year	1970	1971	1972	1973	1974	1975	1976	1977	1978	1979
GDP growth %	4.6	4.9	4.8	9.2	5	6.4	8	5.6	5.2	5.6

Year	1980	1981	1982	1983	1984	1985	1986	1987	1988	1989
GDP growth %	5.149	3.423	3.619	1.875	-7.324	-7.307	3.417	4.312	6.753	6.205

Year	1990	1991	1992	1993	1994	1995	1996	1997	1998	1999
GDP growth %	3.037	-0.578	0.338	2.116	4.388	4.679	5.846	5.185	-0.577	3.082

Year	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010
GDP growth %	4.411	2.894	3.646	4.970	6.698	4.778	5.243	7.117	4.153	1.148	7.632

Government budget

The proposed national government budget for 2011 has set the following budget allocations:^[16]

Budget Allocation	Millions of Pesos (PHP)	Millions of US Dollars (USD)	%
Department of Education	₱207,300	$4,573	30.86
Department of Public Works and Highways	110,600	2,439.8	16.46
Department of National Defense	104,700	2,309.7	15.58
Department of Interior and Local Government	88,200	1,945.7	13.13
Department of Agriculture	37,700	831.7	5.61
Department of Social Welfare and Development	34,300	756.7	5.11
Department of Health	33,300	734.6	4.96
Department of Transportation and Communications	32,300	712.5	4.81
State Universities and Colleges	23,400	516.2	3.48

Private sector

As a newly industrialized nation, the Philippines is still an economy with a large agricultural sector; however, services have come to dominate the economy. Much of the industrial sector is based on processing and assembly operations in the manufacturing of electronics and other high-tech components, usually from foreign multinational corporations.

Automotive

The ABS used in Mercedes-Benz, BMW, and Volvo cars are made in the Philippines. Ford, Toyota, Mitsubishi, Nissan and Honda are the most prominent automakers manufacturing cars in the country. Kia and Suzuki produce small cars in the country. Isuzu also produces SUVs in the country. Honda and Suzuki produce motorcycles in the country. A 2003 Canadian market research report predicted that further investments in this sector were expected to grow in the following years. Toyota sells the most vehicles in the country.^[17] By 2011, China's Chery Automobile company is going to build their assembly plant in Laguna, that will serve and export cars to other countries in the region if monthly sales would reach 1,000 units.

Electronics

Intel has been in the Philippines for 28 years as a major producer of products including the Pentium 4 processor. A Texas Instruments plant in Baguio has been operating for 20 years and is the largest producer of DSP chips in the world.^[18] 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.^[19] Until 2005, Toshiba laptops were produced in Santa Rosa, Laguna. Presently the Philippine plant's focus is in the production of hard disk drives. Printer manufacturer Lexmark has a factory in Mactan in the Cebu region.

Mining and natural resources

The country is rich with mineral and geothermal energy resources. In 2003, it produced 1931 MW of electricity from geothermal sources (27% of total electricity production), second only to the United States,^[20] 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 upheld the constitutionality of an important law permitting foreign ownership of Philippines mining companies. However, 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.

Outsourcing

According to an IBM Global Location Trends Annual Report, as of December 2010^[update] the Philippines has overtaken India as the world leader in business support functions such as shares services and business process outsourcing.^[21][22] 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. BPO facilities are mainly in Metro Manila and Cebu City although other regional areas such as Baguio, Bacolod, Cagayan de Oro, Clark Freeport Zone, Dagupan, Davao City, Dumaguete, Lipa, Iloilo City and CamSur are now being promoted and developed for BPO operations.

Economic indicators and international rankings

Organization	Title	As of	Ranking
International Monetary Fund	Gross Domestic Product (PPP)	2010	32nd[23]
International Monetary Fund	GDP per Capita (PPP)	2010	125th[24]
International Monetary Fund	Foreign Reserves	2011	26th[25]
United Nations	Population	2010	12th[26]
United Nations	Area	2011	73rd[27]
United Nations	Population Density	2010	45th[28]
Central Intelligence Agency	Life Expectancy	2011	133rd out of 221st[29]
United Nations	Literacy Rate	2011	84th out of 182nd[30]
The World Factbook	External Debt	2010	46th[31]
World Tourism Organization	Tourist Arrival	2010	53rd[32]
United Nations	Human Development Index	2011	112 out of 187[33]
World Economic Forum	Global Competitiveness	2011	75 out of 142[34]
World Economic Forum	Global Gender Gap Report	2011	8 out of 135[35]
World Economic Forum	Travel and Tourism Competitiveness	2011	94 out of 139[36]
World Bank	Ease of Doing Business	2011	136 out of 183[37]
Transparency International	Corruption Perceptions Index	2011	129 out of 183[38]
Heritage Foundation/The Wall Street Journal	Index of Economic Freedom	2011	115 out of 179[39]
World Economic Forum	Financial Development Index	2011	44 out of 60[40]

Statistics

Economic growth[41][42][43]
Year	% GDP	% GNI
1999	3.1	2.7
2000	4.4	7.7
2001	2.9	3.6
2002	3.6	4.1
2003	5.0	8.5
2004	6.7	7.1
2005	4.8	7.0
2006	5.2	5.0
2007	7.1	6.2
2008	4.2	5.0
2009	1.1	6.1
2010	7.6	8.2
2011 (1st Qtr)	4.6	3.6
2011 (2nd Qtr)	3.4	1.9
2011 (3rd Qtr)	3.2	1.6
* Computed at Constant 2000 Prices
** Source: NEDA and NSCB

Most of the following statistics are sourced from the CIA World Factbook - Philippines page retrieved on May 15, 2010 (currency is US dollars except where otherwise indicated).

• GDP - purchasing power parity: $373.6 billion (2010 est.)^[1]
• GDP - real growth rate: 7.6 % (2010)
• GDP per capita purchasing power parity: $3,737 (2010 est. in 2010 US dollars)
• GDP nominal: $199.6 billion (2010)
• GDP per capita: $2,123 (2010 est.)^[1]
• GDP - composition by sector:

  agriculture: 14.9%

  industry: 29.9%

  services: 55.1% (2009 est.)^[1]

• Population below poverty line:^[1] 32.9% (2006 est.)^[1]
• Household income or consumption by percentage share:

  lowest 10%: 2.4%

  highest 10%: 31.2% (2006)^[1]

• Inflation rate (consumer prices): 3.3% (2009 est.),^[1] 3.5% (September 2010)^[4]
• Labor force: 37.89 million (2009 est.)^[1]
• Labor force by occupation:

  agriculture 33%

  industry 15%

  services 52% (2009 est.)^[1]

• Unemployment rate: 7.2% (april 2011)^[7]
• Budget:

  revenues: $26.84 billion (2010 est.)^[1]

  expenditures: $33.82 billion (2010 est.)^[1]

• Foreign Reserves: US$76.35 billion (November 2011)^[44]
• Industries: electronics assembly, garments, footwear, pharmaceuticals, chemicals, wood products, food processing, petroleum refining, fishing
• Industrial production growth rate: 12.1% (2010 est.)^[1]
• Electricity - production: 56.57 billion kWh (2007 est.)^[1]
• Electricity - consumption: 54.4 billion kWh (2009 est.)^[1]
• Electricity - exports: 0 kWh (2007)^[1]
• Electricity - imports: 0 kWh (2007)^[1]
• Agriculture - products: sugarcane, coconuts, rice, corn, bananas, cassavas, pineapples, mangoes; pork, eggs, beef; fish^[1]
• Exports: $37.51 billion (2009 est.); $69.46 billion (2010 est.)^[1][45]
• Exports - commodities: semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, fruits^[1]
• 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.)^[1]
• Imports: $45.39 billion (2009 est.)^[1]
• Imports - commodities: electronic products, mineral fuels, machinery and transport equipment, iron and steel, textile fabrics, grains, chemicals, plastic^[1]
• Imports - partners: Japan 12.5%, United States 12%, China 8.8%, Singapore 8.7%, South Korea 7.9%, Republic of China 5.7% (2009 est.)^[1]
• Debt - external: $59.77 billion (30 September 2010 est.)^[1]
• Currency: 1 Philippine peso (₱) = 100 centavos
• Exchange rates: Philippine pesos (PHP) per US dollar - 42.63 (2011), 45.11 (2010), 47.8 (2009), 44.439 (2008), 46.148 (2007), 51.246 (2006),^[1] 55.086 (2005)

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
• Economic history of the Philippines (1973–1986)

References

Further reading

• Balisacan, Arsenio; Hal Hill (2003). The Philippine Economy: Development, Policies, and Challenges. New York: Oxford University Press. p. 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 
• Bhagwati, Jagdish and Anne Krueger. (1974). Foreign Trade Regimes and Economic Development. National Bureau of Economic Research.
• Kang, David C. (2002). Crony Capitalism – Corruption and Development in South Korea and the Philippines. Cambridge University Press. ISBN 978-0521004084.
• Villegas, Bernardo. (2010). The Philippine Advantage (3rd ed.). Manila: University of Asia and the Pacific.
• State of the Philippine Islands A book written by a Spaniard during the early 19th century that studies the economic conditions of the Philippines which was then, a colony of Spain. An online book published by Filipiniana.net.

External links

• 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
• Philippines 8th Regular Foreign Investment Negative List

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