Economy of the Philippines

Economy of the Philippines
Makati, the financial capital of the Philippines
Currency	Philippine peso (Filipino: piso; sign: ₱; code: PHP)
Fiscal year	Calendar year
Trade organisations	APEC, ASEAN, WTO, EAS, AFTA, ADB, and others
Statistics
GDP	$330.259 billion nominal (2015)[1] $751.770 billion PPP (2015)[1]
GDP rank	39th nominal (2014) 29th PPP (2014)
GDP growth	6.1% (2014)[2]
GDP per capita	$2,913.344 (2014)[1] (nominal 126th) $6,985.680(2014) (PPP) per capita[1]
GDP by sector	11.2% agriculture 31.6% industry 57.2% services (2013 est.)[3]
Inflation (CPI)	2.4% (January 2015)[4]
Population below poverty line	24.9%[5]
Gini coefficient	43.0 (2009)[6]
Labour force	59.81 million (2011 est.)[7]
Labour force by occupation	services: 53%, agriculture: 32%, industry: 15% (2012 est.)[8]
Unemployment	6.0% (2014)[9]
Main industries	electronics assembly, Business Process Outsourcing, garments, footwear, pharmaceuticals, chemicals, wood products, food processing, petroleum refining, fishing[7]
Ease-of-doing-business rank	95th[10]
External
Exports	$61.8 billion (2014)[11]
Export goods	semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, fruits[7]
Main export partners	Japan 19.0%  United States 14.2%  China 11.8%  Hong Kong 9.2%  South Korea 5.5%  Thailand 4.7% (2012 est.)[12]
Imports	$61.71 billion (2013)[13]
Import goods	electronic products, mineral fuels, machinery and transport equipment, iron and steel, textile fabrics, grains, chemicals, plastic[7]
Main import partners	United States 11.5%  China 10.8%  Japan 10.4%  South Korea 7.3%  Singapore 7.1%  Thailand 5.6%  Saudi Arabia 5.6%  Indonesia 4.4%  Malaysia 4.0% (2012 est.)[14]
Gross external debt	$58.5 billion (2013)[15]
Public finances
Public debt	39.7 % of GDP (Q3 2013)[16]
Revenues	$34.58 billion (2013)
Expenses	$45.60 billion (2013)[17]
Economic aid	$1.67 billion[18]
Credit rating	Standard & Poor's:[19] BBB (Domestic) BBB (Foreign) BBB+ (T&C Assessment) Outlook: Stable[20] Moody's:[21] Baa2 Outlook: Stable Fitch:[22] BBB- Outlook: Stable
Foreign reserves	$85.761 billion (January 2013)[23]
All values, unless otherwise stated, are in US dollars.

The Economy of the Philippines is the 39th largest in the world, according to 2013 World Bank statistics, and is also one of the emerging markets.^[24] The Philippines is considered as a newly industrialized country, which has been transitioning from being one based on agriculture to one based more on services and manufacturing. According to the International Monetary Fund estimates, the 2015 GDP (purchasing power parity) is $751.770 billion.^[25] Goldman Sachs estimates that by the year 2050, the Philippines will be the 14th largest economy in the world, Goldman Sachs also included the Philippines in its list of the Next Eleven economies. In 2014, the Philippines was Asia's second-fastest growing economy next only to China.^[26] According to HSBC, the Philippine economy will become the 16th largest economy in the world, 5th largest economy in Asia and the largest economy in the Southeast Asian region by 2050.^[27]

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. The Philippines has been named as one of the Tiger Cub Economies together with Indonesia, and Thailand. It is currently one of Asia's fastest growing economies. However, major problems remain, mainly having to do with alleviating the wide income and growth disparities between the country's different regions and socioeconomic classes, reducing corruption, and investing in the infrastructure necessary to ensure future growth.

Macroeconomic trends

The Philippine economy has been growing steadily over decades and the International Monetary Fund in 2014 reported it as the 39th largest economy in the world. However its growth has been behind that of many of its Asian neighbors, the so-called Asian Tigers, and it is not a part of the Group of 20 nations. Instead it is open grouped in a second tier of emerging markets or of newly industrialized countries. Depending upon the analyst, this second tier can go by the name the Next Eleven or the Tiger Cub Economies.

In the years 2012 and 2013, the Philippines posted high GDP growth rates, reaching 6.8% in 2012 and 7.2% in 2013,^[28][29][30] the highest GDP growth rates in Asia for the first two quarters of 2013, followed by China and Indonesia.^[31]

A chart of selected statistics showing trends in the gross domestic product of the Philippines using data taken from the International Monetary Fund.^[32][33]

GDP growth at constant 1985 prices in Philippine pesos:^[32][37][38]

Composition by sector

As a newly industrialized country, 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.

Filipinos who go aboard to work–-known as Overseas Filipino Workers or OFWs—are a significant contributor to the economy but are not reflected in the below sectoral discussion of the domestic economy. OFW remittances is also credited for the Philippines' recent economic growth resulting to investment status upgrades from credit ratings agencies such as the Fitch Group and Standard & Poor's.^[39] In 1994, more than $2 billion USD worth of remittance from Overseas Filipinos were sent to the Philippines.^[40] In 2012, Filipino Americans sent 43% of all remittances sent to the Philippines, totaling to $10.6 billion USD.^[41]

Agriculture

Pineapples on a fruit stand in Cagayan de Oro.

Sacks of raw sugar in the Philippines.

Agriculture employs 32% of the Filipino workforce as of 2013, according to World Bank statistics.^[42] Agriculture accounts for 12% of Philippines GDP as of 2013, according to the World Bank.^[43] The type of activity ranges from small subsistence farming and fishing to large commercial ventures with significant export focus.

The Philippines is the world's largest producer of coconuts producing 19,500,000 tons in 2009. Coconut production in the Philippines is generally concentrated in medium-sized farms.^[44] By 1995, the production of coconut in the Philippines had experienced a 6.5% annual growth and later surpassed Indonesia in total output in the world.^[45] The Philippines is also the world's largest producer of pineapples, producing 2,198 thousand metric tons in 2009.^[46]

Rice production in the Philippines is important to the food supply in the country and economy. The country is the 8th largest rice producer in the world, accounting for 2.8% of global rice production.^[47] The Philippines was also the world's largest rice importer in 2010.^[48] Rice is the most important food crop, a staple food in most of the country. It is produced extensively in Luzon, the Western Visayas, Southern Mindanao, and Central Mindanao.

The Philippines is one of the largest producers of sugar in the world according to Food and Agriculture Organization of the United Nations Statistics Division.^[49] At least 17 provinces located in 8 regions of the country have grown sugarcane crops, of which Negros island accounts for half of the country’s total production. As of Crop Year 2012-2013, 29 mills are operational divided as follows: 6 mills in Luzon, 13 mills in Negros, 4 mills in Panay, 3 mills in Eastern Visayas and 3 mills in Mindanao.^[50] A range from 360,000 to 390,000 hectares are devoted to sugarcane production. The largest sugarcane areas are found in Negros which accounts for 51% of sugarcane areas planted. This is followed by Mindanao which accounts for 20%; Luzon, 17%; Panay islands, 7% and Eastern Visayas, 4%.^[51]

Shipbuilding and repair

The Philippines is a major player in the global shipbuilding industry with shipyards in Subic, Cebu, General Santos City and Batangas.^[52][53] It became the fourth largest shipbuilding nation in 2010.^[54][55] Subic-made cargo vessels are now exported to countries where shipping operators are based. South Korea's Hanjin started production in Subic in 2007 of the 20 ships ordered by German and Greek shipping operators.^[56] The country’s shipyards are now building ships like bulk carriers, container ships and big passenger ferries. General Santos' shipyard is mainly for ship repair and maintenance.^[57]

Being surrounded by waters, the country has abundant natural deep-sea ports ideal for development as production, construction and repair sites. On top of the current operating shipyards, two additional shipyards in Misamis Oriental and Cagayan province are being expanded to support future locators. It has a vast manpower pool of 60,000 certified welders that comprise the bulk of workers in shipbuilding.

In the ship repair sector, the Navotas complex in Metro Manila is expected to accommodate 96 vessels for repair.^[58]

Automotive

The ABS used in Mercedes-Benz, BMW, and Volvo cars are made in the Philippines. Ford,^[59] Toyota,^[60] 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.^[61] 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.^[62] Automotive sales in the Philippines moved up from 165,056 units in 2011 to over 180,000 in 2012. Japan’s automotive manufacturing giant Mitsubishi Motors has announced that it will be expanding its operations in the Philippines.^[63]

Aerospace

Aerospace products in the Philippines are mainly for the export market and include manufacturing parts for aircraft built by both Boeing and Airbus. Moog is the biggest aerospace manufacturer with base in Baguio in the Cordillera region. The company produces aircraft actuators in their manufacturing facility.

In 2011, the total export output of aerospace products in the Philippines reached US $3 billion.^[64]

Electronics

A Texas Instruments plant in Baguio has been operating for 20 years and is the largest producer of DSP chips in the world.^[65] 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.^[66] 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. Electronics and other light industries are concentrated in Laguna, Cavite, Batangas and other CALABARZON provinces with sizable numbers found in Southern Philippines that account for most of the country's export

Mining and extraction

Geothermal power station in Negros Oriental.

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,^[67] 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 sulphur. 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.

Offshoring & outsourcing

Cebu IT Park in Cebu

A business process outsourcing office in Bacolod

In 2008, the Philippines has surpassed India as the world leader in business process outsourcing.^[68][69] 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 were placed at $960 million for 2005. In 2012, BPO sector employment ballooned to over 700,000 people and is contributing to a growing middle class. BPO facilities are located mainly in Metro Manila and Cebu City although other regional areas such as Baguio, Bacolod, Cagayan de Oro, Clark Freeport Zone, Dagupan, Davao City, Legazpi, Dumaguete, Lipa, Iloilo City, and CamSur are now being promoted and developed for BPO operations.

Call centers began in the Philippines as plain providers of email response and managing services and is now a major source of employment. Call center services include customer relations, ranging from travel services, technical support, education, customer care, financial services, online business to customer support, and online business to business support. Business process outsourcing (BPO) is regarded as one of the fastest growing industries in the world. The Philippines is also considered as location of choice due to its many outsourcing benefits such as less expensive operational and labor costs and high proficiency in spoken English and highly educated labor pool. In 2011, the business process outsourcing industry in the Philippines generated 700 thousand jobs^[70] and some US$11 billion in revenue,^[71] 24 percent higher than 2010. By 2016, the industry is projected to reach US$27.4 billion in revenue with employment generation to almost double at 1.3 million workers.^[72]

BPOs and the call center industry in general is also credited for the Philippines' recent economic growth resulting to investment status upgrades from credit ratings agencies such as Fitch and S&P.^[39]

Regional Accounts

Gross Regional Domestic Product (GRDP) is GDP measured at regional levels. Figures below are for the year 2013:

Note: Green-colored cells indicate higher value or best performance in index, while yellow-colored cells indicate the opposite.

Economic indicators and international rankings

Organization	Title	As of	Change from previous	Ranking
International Monetary Fund	Gross Domestic Product (PPP)	2013	()	30th[73]
International Monetary Fund	Gross Domestic Product (nominal)	2013	()	39th[74]
International Monetary Fund	GDP per Capita (PPP)	2013	( 6)	120th[75]
International Monetary Fund	GDP per Capita (nominal)	2013	()	124th[76]
International Monetary Fund	Foreign Reserves	2014	( 1)	26th[77]
United Nations	Population	2013	()	12th[78]
United Nations	Area	2013	()	73rd[79]
Population Commission	Population Density	2014		40th out of 242th[80]
World Health Organization	Life Expectancy	2014		112th out of 193st[81]
Central Intellegence Agency	Literacy Rate	2014		108th out of 194nd[82]
The World Factbook	External Debt	2013		54th[83]
World Tourism Organization	Tourist Arrival	2010	( 1)	52 out of 198[84]
United Nations	Human Development Index	2014	( 1)	117 out of 187[85]
World Economic Forum	Global Competitiveness	2014	( 6)	52 out of 148[86]
Fraser Institute	Economic Freedom of the World	2013	( 5)	56 out of 144[87]
World Economic Forum	Global Gender Gap Report	2013	( 3)	5 out of 136[88]
World Economic Forum	Travel and Tourism Competitiveness	2013	( 12)	82 out of 140[89]
World Economic Forum	Global Enabling Trade Report	2014	( 8)	64 out of 138[90]
World Bank	Ease of Doing Business	2013	( 30)	108 out of 183[91]
Transparency International	Corruption Perceptions Index	2013	( 11)	94 out of 177[92]
Heritage Foundation/The Wall Street Journal	Index of Economic Freedom	2014	( 8)	89 out of 178[93]
The Economist Intelligence Unit	Global Peace Index	2013	( 4)	129 out of 158[94]
Reporters Without Borders	Press Freedom Index	2013	( 7)	147 out of 178[95]
World Economic Forum	Financial Development Index	2012	( 5)	49 out of 60[96]

Statistics

Percentage of population in 2007 living below poverty line, by province. Provinces with darker shades have more people living below the poverty line.

Filipino exports in 2006

Graphical depiction of Philippines' product exports in 28 color-coded categories.

Most of the following statistics are sourced from the International Monetary Fund - Philippines (as of 2012; figures are in US dollars unless otherwise indicated).

• GDP - purchasing power parity: $ 751.770 billion (2015)
• GDP - real growth rate: 6.1% (2014)
• GDP per capita purchasing power parity: $6,985.680 (2014)
• GDP nominal: $330.259 billion (2015)
• GDP per capita: $2,913.344 (2014)^[100]
• GDP - composition by sector:

  agriculture: 11.2%

  industry: 31.6%

  services: 57.2% (2013 est.)^[7]

• Population below poverty line: less than $1.25 / 10.41% (2009)
  less than $2 / 25.2% (2012),^[101] 26.3% (2009),^[101] 32.9% (2006 est.)^[7]
• Household income or consumption by percentage share:

  lowest 10%: 2.4%

  highest 10%: 31.2% (2006)^[7]

• Inflation rate (consumer prices): 2.4% (March 2015) 3.9% (March 2014),^[101] 5.3% (2011 est.),^[7] 3.5% (September 2010)^[102]
• Labor force: 59.81 million (2011 est.)^[7]
• Labor force by occupation:

  agriculture 32%

  industry 15%

  services 53% (2012 est.)^[7]

• Unemployment rate:6.0% (January 2015) 7.5% (January 2014),^[101][103] 7.5% (April 2013),^[103] 6.9% (April 2012),^[103] 7.2% (April 2011)^[104]
• Budget:

  revenues: $34.58 billion (2013),^[105] $31.99 billion (2011 est.)^[7]

  expenditures: $44.29 billion (2013),^[105] $36.71 billion (2011 est.)^[7]

• Foreign Reserves: US$85.761 billion (January 2013)^[106]
• Industries: electronics assembly, garments, footwear, pharmaceuticals, chemicals, wood products, food processing, petroleum refining, fishing
• Industrial production growth rate: 12.1% (2010 est.)^[7]
• Electricity - production: 59.19 billion kWh (2009 est.)^[7]
• Electricity - consumption: 54.4 billion kWh (2009 est.)^[7]
• Electricity - exports: 0 kWh (2007)^[7]
• Electricity - imports: 0 kWh (2007)^[7]
• Agriculture - products: sugarcane, coconuts, rice, corn, bananas, cassavas, pineapples, mangoes; pork, eggs, beef; fish^[7]
• Exports: $53.98 billion (2013)^[107]$54.17 billion (2011 est.); $69.46 billion (2010 est.)^[7][108]
• Exports - commodities: semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, fruits^[7]
• Exports - partners: China 19%, United States 13.4%, Singapore 13.2%, Japan 12.8%, Hong Kong 7.6%, Germany 4.2%, South Korea 4.1% (2010)^[7]
• Imports: $61.831 billion (2013),^[107] $68.84 billion (2011 est.)^[7]
• Imports - commodities: electronic products, mineral fuels, machinery and transport equipment, iron and steel, textile fabrics, grains, chemicals, plastic^[7]
• Imports - partners: Japan 14.1%, China 13.6%, United States 9.9%, Singapore 9.3%, Thailand 6.5%, South Korea 5.6%, Indonesia 4.1% (2010)^[7]
• Debt - external: $62.41 billion (31 December 2011 est.)^[7]
• Currency: 1 Philippine peso (₱) = 100 centavos
• Exchange rates: Philippine pesos (PHP) per US dollar - 44.39 (2014 average),^[109] 42.43 (2012 average),^[109] 43.44 (2011), 45.11 (2010), 47.68 (2009), 44.439 (2008), 46.148 (2007), 51.246 (2006),^[7] 55.086 (2005)

Government budget

The national government budget for 2012 has set the following budget allocations:^[110] Noticeably enough, the Department of Science & Technology^[111] is not reflected in the chart below which underlines the Philippine government's need to invest more on education, particularly in the sciences and engineering fields to solidify its current growth momentum.^[39]

See also

• List of companies of the Philippines
• Next Eleven
• Tiger Cub Economies
• Newly Industrialized countries
• Economy of Asia
• Emerging markets
• Bamboo network

References

Further reading

• Balisacan, Arsenio; Hal Hill (2003). The Philippine Economy: Development, Policies, and Challenges. New York: Oxford University Press. p. 496. ISBN 978-0-19-515898-4 
• Balisacan, Arsenio; Hal Hill (2007). "The Dynamics of Regional Development: The Philippines in East Asia" (PDF). Cheltenham, UK: Edward Elgar 
• 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 978-0-521-00408-4.
• 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.
• Philippines - Asia's new tiger economy
• Philippines' opportunity point

External links

Wikimedia Commons has media related to Economy of the Philippines.

• 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

Trade

• World Bank Summary Trade Statistics Philippines 2012
• Tariffs applied by the Philippines as provided by ITC's Market Access Map, an online database of customs tariffs and market requirements.

Economy of the Philippines History Martial Law Laurel–Langley Agreement 1997 Asian financial crisis NIC Tiger Cub Economies Next Eleven Asian Century Financial crisis of 2007–08 Largest projects Industry and Business Agriculture Business outsourcing Energy Gambling Internet Manufacturing Radio Telecommunications Television Companies Economic Regions North Luzon Agribusiness Quadrangle Metro Luzon Urban Beltway Central Philippines Region Mindanao Super Region Cyber Corridor Finance Fiscal policy Central Bank Philippine peso Stock Exchange Billionaires Trade and Infrastructure Transportation Tourism Waterworks Shipping Taxation Tax System Bureau of Internal Revenue Institutions Department of Energy Department of Finance Department of Trade and Industry Action For Economic Reforms

Philippines topics History Prehistory History of the Philippines (900–1521) Spanish colonial period (1521–1898) Revolution (1896–1898) First Republic (1899–1901) Philippine–American War (1899–1902) American colonial period (1898–1946) Commonwealth (1935–1946) Japanese occupation (1942–1945) Second Republic (1943–1945) Third Republic (1946–1965) Marcos era (1965–1986) Fifth Republic (1986–present) Geography Climate Ecoregions Environment Extreme points Island groups islands Lakes Landmarks Mountains National parks Protected areas Rivers Volcanoes Wildlife World Heritage Sites Politics Administrative divisions Congress Constitution Elections Foreign relations Government Human rights Law enforcement Military Political parties President Supreme Court Economy Agriculture Business process outsourcing Central Bank Energy Fiscal policy National debt Labor Peso (currency) Stock Exchange Taxation Telecommunications Tourism Transportation Science and technology Society Corruption Crime Demographics Education Ethnic groups Filipino people Health Income inequality Languages Poverty Provinces by HDI Water supply and sanitation Culture Architecture Art Cinema Cuisine Cultural Properties Dance Clothing Festivals Filipinophile Historical Markers Literature Media Music Mythology Public holidays Psychology Religion Sexuality Sports Traditional games Value system Symbols Anthem Coat of arms Arnis / Eskrima (martial art) Flag Name Narra (tree) Philippine eagle Sampaguita (flower) Outline Index Book Category Portal WikiProject