Philippines: Economy#
The economy has been relatively resilient to global economic shocks due to less exposure to troubled international securities, lower dependence on exports, relatively resilient domestic consumption, large remittances from about 10 million overseas Filipino workers and migrants, and a rapidly expanding outsourcing industry. The current account balance has recorded consecutive surpluses since 2003, international reserves remain at comfortable levels, and the banking system is stable.Efforts to improve tax administration and expenditures management have helped ease the Philippines' debt burden and tight fiscal situation. The Philippines has received investment-grade credit ratings on its sovereign debt under the AQUINO administration and has had little difficulty financing its budget deficits. However, weak absorptive capacity and implementation bottlenecks have prevented the government from maximizing its expenditure plans, which the administration has been working to address. Although it has improved, the low tax-to-GDP ratio remains a constraint to supporting increasingly higher spending levels and sustaining strong growth over the longer term.
Economic growth has accelerated, averaging 6.0% per year from 2011 to 2015, compared with 4.5% under the MACAPAGAL-ARROYO government; and competitiveness rankings have improved. The Philippines has not sustained steady growth in foreign direct investment, which continues to lag regional peers.
Although the economy has grown at a faster pace under the AQUINO government, challenges to achieving more inclusive growth remain. The unemployment rate has declined somewhat in recent years but remains high, hovering at around 6.5%; underemployment is also high, ranging from 18% to 19% of the employed. At least 40% of the employed work in the informal sector. Poverty afflicts about a quarter of the population. More than 60% of the poor reside in rural areas, a challenge to raising rural farm and non-farm incomes. The AQUINO administration has been working to boost expenditures for education, health, transfers to the poor, and other social spending programs. Infrastructure remains underfunded and the government is relying on the private sector to help with major projects under its Public-Private Partnership program. Continued efforts are needed to improve governance, the judicial system, the regulatory environment, and the overall ease of doing business.
Notable achievements over the past year include passage of laws that liberalized the entry of foreign banks into the country; partially relaxed the cabotage law by allowing foreign vessels to ply import and export cargo within the archipelago; and passage of anti-trust legislation. Substantial progress has also been made towards passage of a Customs Tariff and Modernization Act to meet international standards and commitments, with strong prospects of enactment into law before President AQUINO steps down from office. However, the Philippine Constitution and other laws restrict foreign ownership in important activities/sectors - such as land ownership and public utilities.
Economic Facts#
| GDP (purchasing power parity) | $801.9 billion (2016 est.) $753.7 billion (2015 est.) $711.6 billion (2014 est.) note: data are in 2016 dollars |
|---|---|
| GDP (official exchange rate) | $311.7 billion (2015 est.) |
| GDP - real growth rate | 6.4% (2016 est.) 5.9% (2015 est.) 6.2% (2014 est.) |
| GDP - per capita (PPP) | $7,700 (2016 est.) $7,400 (2015 est.) $7,100 (2014 est.) note: data are in 2016 dollars |
| Gross national saving | 25.5% of GDP (2016 est.) 23.4% of GDP (2015 est.) 24.3% of GDP (2014 est.) |
| GDP - composition, by end use | household consumption: 72.9% government consumption: 10.9% investment in fixed capital: 22.3% investment in inventories: -0.3% exports of goods and services: 24.8% imports of goods and services: -30.6% (2016 est.) |
| GDP - composition, by sector of origin | agriculture: 9.7% industry: 30.5% services: 59.8% (2016 est.) |
| Agriculture - products | sugarcane, coconuts, rice, corn, bananas, cassava (manioc, tapioca), pineapples, mangoes; pork, eggs, beef; fish |
| Industries | electronics assembly, garments, footwear, pharmaceuticals, chemicals, wood products, food processing, petroleum refining, fishing |
| Industrial production growth rate | 6.8% (2016 est.) |
| Labor force | 42.8 million (2016 est.) |
| Labor force - by occupation | agriculture: 29% industry: 16% services: 55% (2015 est.) |
| Unemployment rate | 6.6% (2016 est.) 6.3% (2015 est.) |
| Population below poverty line | 25.2% (2012 est.) |
| Household income or consumption by percentage share | lowest 10%: 2.9% highest 10%: 30.5% (2012 est.) |
| Distribution of family income - Gini index | 46 (2012) 46.4 (2009) |
| Budget | revenues: $45.54 billion expenditures: $48.76 billion (2016 est.) |
| Taxes and other revenues | 14.6% of GDP (2016 est.) |
| Budget surplus (+) or deficit (-) | -1% of GDP (2016 est.) |
| Public debt | 42.9% of GDP (2016 est.) 44.8% of GDP (2015 est.) note: data cover debt issued by the national government, and excludes debt instruments issued by government entities other than the treasury; the data include treasury debt held by foreign entities; the data exclude debt issued by social security institutions, |
| Fiscal year | calendar year |
| Inflation rate (consumer prices) | 1.7% (2016 est.) 1.3% (2015 est.) |
| Central bank discount rate | 6.13% (31 December 2015) 6.13% (31 December 2014) |
| Commercial bank prime lending rate | 6% (31 December 2016 est.) 5.58% (31 December 2015 est.) |
| Stock of narrow money | $66.03 billion (31 December 2016 est.) $56.56 billion (31 December 2015 est.) |
| Stock of broad money | $187.9 billion (31 December 2016 est.) $171 billion (31 December 2015 est.) |
| Stock of domestic credit | $187.8 billion (31 December 2016 est.) $166.7 billion (31 December 2015 est.) |
| Market value of publicly traded shares | $238.8 billion (31 December 2015 est.) $261.8 billion (31 December 2014 est.) $217.3 billion (31 December 2013 est.) |
| Current account balance | $5.542 billion (2016 est.) $8.396 billion (2015 est.) |
| Exports | $38.2 billion (2016 est.) $43.28 billion (2015 est.) |
| Exports - commodities | semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, fruits |
| Exports - partners | Japan 21.1%, US 15%, China 10.9%, Hong Kong 10.6%, Singapore 6.2%, Germany 4.5%, South Korea 4.3% (2015) |
| Imports | $60.95 billion (2016 est.) $64.97 billion (2015 est.) |
| Imports - commodities | electronic products, mineral fuels, machinery and transport equipment, iron and steel, textile fabrics, grains, chemicals, plastic |
| Imports - partners | China 16.2%, US 10.8%, Japan 9.6%, Singapore 7%, South Korea 6.5%, Thailand 6.4%, Malaysia 4.8%, Indonesia 4.4% (2015) |
| Reserves of foreign exchange and gold | $79.99 billion (31 December 2016 est.) $80.67 billion (31 December 2015 est.) |
| Debt - external | $77.46 billion (31 December 2016 est.) $77.46 billion (31 December 2015 est.) |
| Stock of direct foreign investment - at home | $62.8 billion (31 December 2016 est.) $59.3 billion (31 December 2015 est.) |
| Stock of direct foreign investment - abroad | $44.1 billion (31 December 2016 est.) $41.1 billion (31 December 2015 est.) |
| Exchange rates | Philippine pesos (PHP) per US dollar - 47.08 (2016 est.) 45.503 (2015 est.) 45.503 (2014 est.) 44.395 (2013 est.) 42.23 (2012 est.) |