|Economy of Philippines|
|Currency||Philippine peso (PHP) = 100 centavos (English)
piso = 100 sentimo (Filipino)
|Fiscal year||Calendar year|
|Trade organisations||APEC, ASEAN, WTO|
|GDP||$317.5bn (2008 est.)|
|GDP growth||3.8% (2008 est.)|
|GDP per capita||$3,300 (2008 est.)|
|GDP by sector||agriculture (14.7%), industry (31.6%), services (53.7%) (2008 est.)|
|Inflation (CPI)||0.7% (September 2009) |
below poverty line
|30% (2003 est.), approx. 22% (2001-2006)|
|Gini index||45.8 (2006)|
|Labour force||36.81 million (2008 est.)|
|services (50%), agriculture (35%), industry (15%) (As of 2007)|
|Unemployment||7.6% (July 2009)|
|Main industries||electronics assembly, garments, footwear, pharmaceuticals, chemicals, wood products, food processing, petroleum refining, fishing|
|Exports||$48.2 billion f.o.b. (2008 est.)|
|Export goods||semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, fruits|
|Main export partners||China 25.7%, United States 12.7%, Japan 12.4%, Hong Kong 8.7%, Singapore 6.9%, Malaysia 4.4% (2008)|
|Imports||$60.78 billion f.o.b. (2008 est.)|
|Import goods||electronic products, mineral fuels, machinery and transport equipment, iron and steel, textile fabrics, grains, chemicals, plastic|
|Main import partners||Japan 14.2%, United States 11.8%, China 11.4%, Singapore 10.3%, Saudi Arabia 6.0%, South Korea 4.8%, Thailand 4.7% (2008)|
|Gross external debt||$61.41 bn (December 31, 2008)|
|Public debt||$178.75bn (56.3% of GDP) (2008 est.)|
|Revenues||$27.05bn (2008 est.)|
|Expenses||$28.58bn (2008 est.)|
|Economic aid||recipient. ODA, $561.7 million (2007)|
|Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars
The economy of the Philippines is the 5th largest economy in South East Asia and has a mixed economic system, and one of the newly industrialized emerging market economies of the world. In 2008, it was ranked as the 36th largest economy in the world by the International Monetary Fund according to purchasing power parity. It is one of the fastest-growing economies in Asia, posting a real GDP growth rate of 7.3% in the year 2007. Growth slowed to 4.5% in 2008 as a result of the global financial crisis.
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.
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. During this time, capitalism became highly prevalent in the nation, as major American corporations dominated local industry alongside a few local entrepreneurs. Fidel V. Ramos managed to briefly stimulate the economy during his reign as president, posting one of the Philippines' highest GDP growth rates. The country, however, could not recover entirely from the economic slowdown in the Marcos regime.
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 impeachment and subsequent departure of President Estrada in the beginning of 2001 led to lower growth.
The current administration under President Gloria Macapagal-Arroyo has been marked by radical and risky moves pushing 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, the advent of high oil prices dampened the government's growth estimates for that same year as growth only amounted 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 had visioned 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%. As of April 2009, the peso is trading at around 47.45:$1.
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 materialice 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."
In 2008 the nominal GNP Per capita was US $ 2,060 and the PPP GNP Per capita was US$ 4,120. The total nominal GNP was US $ 188 billion and the total PPP GNP was US $ 376 billion.
Balisacan and Hill (2003 and 2007) 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.
Millions of PhP
|Per Capita Income
(as % of USA)
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 around manufacturing electronics and other high-tech components, usually from American corporations.
The proposed national government budget for 2010 has set the highest budget allocations to Department of Education (DepEd) P162.1 billion (US$3.46 billion), Department of Public Works and Highway P117.3 billion (US$2.5 billion), Interior and Local Government P65.3 billion (US$1.39 billion), National Defense P57.6 billion (US$1.23 billion), Agriculture P38 billion (US$812 million), health P28 billion (US$598 million), State Universities and Colleges P22.3 billion (US$477 million), Agrarian Reform P19 billion (US$406 million), Transportation and Communications P16.4 billion (US$350 million), and Social Welfare and Development P14 billion (US$299 million).
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 .
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.
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 . TI's 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.
The Philippines is Asia-Pacific’s second-largest call center market, next to India, a June 2008 study released recently here by Oracle Corp. said.
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.
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, 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 went on a rebound 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 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.
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.
(All numbers in US Dollars)