Economy of the PhilippinesFrom Wikipedia, the free encyclopedia

Economy of the Philippines

Makati, the financial capital of thePhilippines

Currency

Philippine peso (PHP) = 100 centavos (English)piso = 100 sentimo (Filipino)

Fiscalyear

Calendar year

Trade organisations

APEC, ASEAN, WTO, EAS, Asian Development Bank, ASEAN Plus Three, and others

Statistics

GDP $287.52 billion nominal (2013)[1]

$482.43 billion PPP (2013)[1]

GDP growth

 5.7% 1Q(2014)

GDP per capita

$2,904 (2013)[1] (nominal 126th)

$4,873 (2013) (PPP) per capita[1]

GDP bysector

agriculture (12.3%), industry (33.3%), services (54.4%) (2011 est.)[2]

Inflat 2.1% (August 2013)[3]

ion (CPI)Population belowpovertyline

less than $1.25 / 10.41% (2009)less than $2 / 25.2% (2012)[4]

[5]

Gini coefficient

43.0 (2009)[6]

Labourforce

59.81 million (2011 est.)[2]

Labourforce by occupation

services (52%) agriculture (33%), industry (15%) (2010 est.)[2]

Unemployment

7%(2013)[7]

Main industries

electronics assembly, Business Process Outsourcing, garments,footwear, pharmaceuticals,chemicals, wood products, food processing, petroleum refining,fishing [2]

Ease-of-doing-business rank

108th of 183 countries ranked[8]

ExternalExports

$53.98 billion (2013)[9]

Exportgoods

semiconductors and electronic products, transport equipment,garments, copper products,petroleum products, coconut oil,fruits [2]

Main export

 Japan 19.0%

partners

 United States 14.2%

 China 11.8% Hong Kong 9.2% South Korea 5.5% Thailand 4.7% (2012 est.)[10]

Imports

$61.71 billion (2013)[11]

Importgoods

electronic products, mineral fuels, machinery and transport equipment, iron and steel, textile fabrics, grains, chemicals, plastic[2]

Main importpartners

 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.)[12]

Gross external debt

 $58.5 billion (2013)[13]

Public financesPublicdebt

39.7 % of GDP (Q3 2013)[14]

Revenues

$34.58 billion (2013)

Expenses

$45.60 billion (2013)[15]

Economic aid

$1.67 billion[16]

Creditrating

Standard & Poor's :[17]

BBB (Domestic)BBB (Foreign)BBB+ (T&C Assessment)

Outlook: Stable[18]

Moody's :[19]

Baa3Outlook: Positive[20]

Fitch :[21]

BBB-Outlook: Stable

Foreign reserves

 $85.761 billion (January

2013)[22]

All values, unless otherwise stated, are in US dollars.

The Economy of the Philippines is the 38th largest in the world, accordingto 2013 International Monetary Fund statistics, and is also one of the emerging markets in the world.[23] 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 World BankICP 2011, the estimated 2011 GDP (purchasing power parity) was $543.7 billion.[24] 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 NextEleven economies. According to HSBC, the Philippine economy will become the 16th largest economy in the world, 5th largest economy in Asia and thelargest economy in the Southeast Asian region by 2050.[25]

Primary exports include semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, andfruits. Major trading partners include the United States, Japan, China, Singapore, South Korea, theNetherlands, Hong Kong, Germany, Taiwan, and Thailand. The Philippines has been named as oneof the Tiger Cub Economiestogether with Indonesia, Malaysia 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.

Contents  [hide] 

1 Macroeconomic trends 2 Composition by sector

o 2.1 Agricultureo 2.2 Shipbuilding and repairo 2.3 Automotive

o 2.4 Aerospaceo 2.5 Electronicso 2.6 Mining and extractiono 2.7 Offshoring & outsourcing

3 Regional Accounts 4 Economic indicators and international rankings 5 Statistics 6 Government budget 7 See also 8 References 9 Further reading 10 External links

Macroeconomic trends[edit]See also: Economy of Asia, Economic history of the Philippines (1973–1986), Post-EDSA macroeconomic history of the Philippines and Economic Crisis and Response in the Philippines

The Philippine economy has been growing steadily over decades and the International Monetary Fund in 2011 reported it as the 45th 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,[26][27][28] the highest GDP growth rates in Asia for the first two quarters of 2013, followed by China and Indonesia.[29]

A chart of selected statistics showing trends in the gross domestic product of the Philippines using data taken from the International Monetary Fund.[30][31]

Year

GDP growthin percent(constantprices,

base year =2000)

GDPin PHPBillion(curren

tprices)

GDPin USDBillion(curren

tprices)

GDP percapitain USD(curren

tprices)

GDPin USDBillio

n(PPP)

GDPper

capitain USD(PPP)

Peso vsDollar

ExchangeRate

1980 5.15 270.1 35.9 744 64.4 1334 7.51

1981 3.42 312.0 39.5 797 72.9 1471 7.90

1982 3.62 351.4 41.1 810 80.1 1578 8.54

1983 1.88 408.9 36.8 707 84.9 1630 11.11

1984 -7.32 581.1 34.8 652 81.6 1530 16.70

1985 -7.31 633.6 34.1 623 77.9 1426 18.61

1986 3.42 674.6 33.1 591 82.4 1471 20.39

1987 4.31 756.5 36.8 641 88.4 1540 20.57

1988 6.75 885.5 42.0 715 97.6 1663 21.09

1989 6.21 1025.3 47.3 786 107.6 1791 21.70

1990 3.04 1190.5 48.9 796 115.2 1873 24.33

1991 -0.58 1379.9 50.2 797 118.6 1882 27.48

1992 0.34 1497.5 58.7 912 121.8 1891 25.51

1993 2.12 1633.6 60.2 914 127.1 1929 27.12

1994 4.39 1875.7 71.0 1052 135.5 2007 26.42

1995 4.68 2111.7 83.7 1224 144.8 2118 25.24

1996 5.85 2406.4 93.5 1336 156.1 2232 26.22

1997 5.19 2688.7 92.8 1297 167.1 2336 28.98

1998 -0.58 2952.8 73.8 1009 168.1 2297 40.02

1999 3.08 3244.2 83.0 1110 175.8 2352 39.09

2000 4.41 3580.7 81.0 1053 187.5 2437 44.19

2001 2.89 3888.8 76.3 971 197.3 2511 50.99

2002 3.65 4198.3 81.4 1014 207.8 2591 51.60

2003 4.97 4548.1 83.9 1025 222.7 2720 54.20

2004 6.70 5120.4 91.4 1093 242.7 2905 56.04

2005 4.78 5677.8 103.1 1209 261.0 3061 55.09

2006 5.24 6271.2 122.2 1405 283.5 3255 51.31

2007 6.62 6892.7 149.4 1684 309.9 3493 46.15

2008 4.15 7720.9 173.6 1919 329.0 3636 44.47

2009 1.15 8026.1 168.5 1851 335.4 3685 47.64

2010 7.63 9003.5 199.6 2155 365.3 3945 45.11

2011 3.64 9706.3 224.1 2379 386.1 4098 43.31

2012[3

2] 6.82 10564.9 250.2 2611 419.6 4380 42.23

2013[3

3] 7.16 11546.1 272.2 2792 454.3 4660 42.45

GDP growth at constant 1985 prices in Philippine pesos:[30][34][35]

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

2011

2012

2013

GDPgrowth 

%

4.411

2.894

3.646

4.970

6.698

4.778

5.243

7.117

4.153

1.148

7.632 3.6 6.8 7.2

Composition by sector[edit]As a newly industrialized country, the Philippines is still an economy with a large agricultural sector; however, services have come to dominate the economy.[citation needed] 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 inthe 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.[36]

Agriculture[edit]

Pineapples on a fruit stand in Cagayan de Oro.

Further information: Agriculture in the Philippines

Sacks of raw sugar in the Philippines.

Agriculture employs 32% of the Filipino workforce as of 2013, according toWorld Bank statistics.[37] Agriculture accounts for 12% of Philippines GDP as of 2013, according to the World Bank.[38] 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.[39] 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.[40] The Philippinesis also the world's largest producer ofpineapples, producing 2,198 thousand metric tons in 2009.[41]

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.[42] The Philippines was also the world's largest rice importer in 2010.[43] 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.[44] 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.[45] 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 EasternVisayas, 4%.[46]

Shipbuilding and repair[edit]The Philippines is a major player in the global shipbuilding industry withshipyards in Subic, Cebu, General Santos City and Batangas.[47][48] It becamethe fourth largestshipbuilding nation in 2010.[49][50] 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.[51] The country’s shipyardsare now building ships like bulk carriers, container ships and big passenger ferries. General Santos' shipyard is mainly for ship repair and maintenance.[52]

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 expectedto accommodate 96 vessels for repair.[53]

Automotive[edit]The ABS used in Mercedes-Benz, BMW, and Volvo cars are made in the Philippines. Ford,[54] Toyota,[55] Mitsubishi, Nissan and Honda are the most prominent automakersmanufacturing cars in the country.[citation

needed] Kia and Suzuki produce small cars in the country. Isuzu also producesSUVs 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.[56] 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.[57] 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.[58]

Aerospace[edit]Aerospace products in the Philippines are mainly for the export market andinclude 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.[59]

Electronics[edit]A Texas Instruments plant in Baguio has been operating for 20 years and isthe largest producer of DSP chips in the world.[60] 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.[61] Until 2005, Toshiba laptops were produced in Santa Rosa, Laguna. Presently the Philippine plant's focus is in the production of hard disk drives. Printermanufacturer Lexmark has a factory in Mactan in the Cebu region.

Mining and extraction[edit]

Geothermal power station inNegros 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,[62] and a recentdiscovery 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%. In1999, however, mineral production declined 16% to $793 million.[citation

needed] 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.[citation needed]

The industry rebounded starting in late 2004 when the Supreme Court upheldthe constitutionality of an important law permitting foreign ownership of Philippines mining companies.[citation needed] However, the DENR has yet to approvethe 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 thatallows 100% foreign ownership of Philippines mines.[citation needed]

Offshoring & outsourcing[edit]

Cebu IT Park in Cebu

A business process outsourcing office in Bacolod

Main articles: Business process outsourcing in the Philippines and Call center industry in the Philippines

According to an IBM Global Location Trends Annual Report, as of December 2010 the Philippines has surpassed India as the world leader in business process outsourcing.[63][64] The majority of the top ten BPO firms of the United States operate in the Philippines.[citation needed]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 responseand managing services and is now a major source of employment. Call centerservices 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 suchas 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[65] and some US$11 billion in revenue,[66] 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.[67]

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.[36]

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

Region

GRDP

(inbillion

PHP)

%ofGRDP

Agriculture(in

billion PHP)

%ofGRDP

Industry(inbillionPHP)

%ofGRDP

Services(inbillionPHP)

%ofGRDP

percapitaGRDP

Metro Manila

3,479.905

35.744 17.891 0.51 591.035 16.98 2,870.

979 82.50 288,062

Cordillera 210.079 2.158 21.082 10.04 116.522 55.47 72.474 34.50 127,6

14

Ilocos 293.918 3.019 75.097 25.55 79.448 27.03 139.37

2 47.42 71,076

Cagayan Valley

167.492 1.72 71.769 42.85 17.805 10.63 77.919 46.52 51,10

0

Central Luzon

882.806 9.068 145.975 16.54 373.250 42.28 363.58

0 41.18 85,186

CALABARZON 1,644.843

16.895 108.940 6.62 1,015.5

01 61.74 520.401 31.64 126,5

89

MIMAROPA 176.1 1.81 48.028 27.26 65.135 36.97 63.013 35.77 62,99

Region

GRDP

(inbillion

PHP)

%ofGRDP

Agriculture(in

billion PHP)

%ofGRDP

Industry(inbillionPHP)

%ofGRDP

Services(inbillionPHP)

%ofGRDP

percapitaGRDP

76 5

Bicol 206.619 2.122 57.728 27.94 44.855 21.71 104.03

6 50.35 37,526

Western Visayas

395.417 4.062 115.613 29.24 66.238 16.75 213.56

5 54.01 54,870

Central Visayas

601.880 6.182 51.890 8.62 213.968 35.55 336.02

3 55.83 86,880

Eastern Visayas

242.594 2.492 58.434 24.09 104.207 42.96 79.952 32.96 58,33

5

Zamboanga Peninsula

200.883 2.063 66.206 32.96 51.762 25.77 82.915 41.28 57,81

5

Northern Mindanao

467.100 4.798 115.283 31.40 102.251 27.85 149.56

6 40.74 93,628

Davao Region

408.450 4.195 104.792 25.66 112.821 27.62 190.83

7 46.72 89,552

Region

GRDP

(inbillion

PHP)

%ofGRDP

Agriculture(in

billion PHP)

%ofGRDP

Industry(inbillionPHP)

%ofGRDP

Services(inbillionPHP)

%ofGRDP

percapitaGRDP

SOCCSKSARGEN

261.548 2.687 97.932 37.44 71.445 27.32 97.171 35.24 62,08

0

Caraga 99.037 1.017 30.248 27.56 26.583 24.22 52.934 48.22 44,47

2

Muslim Mindanao

86.048 0.884 58.287 67.74 3.641 4.23 24.120 28.03 26,00

4

Total 9,735.521 100 1,245.19

6 12.79 3,056.468 31.40 5,433.

857 55.81 103,366

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

Economic indicators and international rankings[edit]Further information: Philippine investment climate

Organization Title Asof

Change fromprevious Ranking

International MonetaryFund

Gross Domestic Product (PPP) 2013 ( ) 31st[68]

Organization Title Asof

Change fromprevious Ranking

International MonetaryFund

Gross Domestic Product (nominal) 2013 ( ) 40th[69]

International MonetaryFund

GDP per Capita (PPP) 2013 (  4) 130th[70]

International MonetaryFund

GDP per Capita (nominal) 2013 ( ) 124th[71]

International MonetaryFund Foreign Reserves 2013 (  2) 27th[72]

United Nations Population 2013 ( ) 12th[73]

United Nations Area 2013 ( ) 73rd[74]

United Nations Population Density 2010 45th[75]

Central Intelligence Agency Life Expectancy 2011 133rd out

of 221st[76]

United Nations Literacy Rate 2011 84th out of182nd[77]

The World Factbook External Debt 2010 46th[78]

World Tourism Organization Tourist Arrival 2010 (  1) 52 out of

198[79]

Organization Title Asof

Change fromprevious Ranking

United Nations Human Development Index 2012 (  2) 114 out of

187[80]

World Economic Forum Global Competitiveness 2013 (  6) 59 out of

148[81]

Fraser Institute Economic Freedom ofthe World 2013 (  5) 56 out of

144[82]

World Economic Forum Global Gender Gap Report 2013 (  3) 5 out of

136[83]

World Economic Forum Travel and Tourism Competitiveness 2013 (  12) 82 out of

140[84]

World Economic Forum Global Enabling Trade Report 2014 (  8) 64 out of

138[85]

World Bank Ease of Doing Business 2013 (  30) 108 out of

183[86]

Transparency International

Corruption Perceptions Index 2013 (  11) 94 out of

177[87]

Heritage Foundation/TheWall Street Journal

Index of Economic Freedom 2014 (  8) 89 out of

178[88]

The Economist Intelligence Unit Global Peace Index 2013 (  4) 129 out of

158[89]

Organization Title Asof

Change fromprevious Ranking

Reporters Without Borders Press Freedom Index 2013 (  7) 147 out of

178[90]

World Economic Forum Financial Development Index 2011 44 out of

60[91]

Statistics[edit]Further information: Income inequality in the Philippines and Poverty in the Philippines

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

Economic growth[92]

[93][94]

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 3.7 2.6

2012[9

5] 6.8 6.5

2013[9

5] 7.2 7.5

* Computed at Constant 2000Prices

** Source: NEDA and NSCB

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: $416.721 billion (2012est.) GDP - real growth rate: 6.6% (2012) GDP per capita purchasing power parity: $4,263.689 (2012 est. in 2012

US dollars) GDP nominal: $240.664 Billion (2012)[96]

GDP per capita: $2,462.354 (2012 est.)[97]

GDP - composition by sector:agriculture: 12.3%industry: 33.3%services: 54.4% (2011 est.)[2]

Population below poverty line: less than $1.25 / 10.41% (2009)less than $2 / 25.2% (2012),[98] 26.3% (2009),[98] 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): 3.9% (March 2014),[98] 5.3% (2011 est.),[2] 3.5% (September 2010)[99]

Labor force: 39.81 million (2011 est.)[2]

Labor force by occupation:agriculture 33%industry 15%services 52% (2011 est.)[2]

Unemployment rate: 7.5% (January 2014),[98][100] 7.5% (April 2013),[100] 6.9%(April 2012),[100] 7.2% (April 2011)[7]

Budget:revenues: $40.43 billion (2013),[101] $31.99 billion (2011 est.)[2]

expenditures: $44.29 billion (2013),[101] $36.71 billion (2011 est.)[2]

Foreign Reserves: US$81.90 billion (September 2012)[102]

Industries: electronics assembly, garments, footwear, pharmaceuticals, chemicals, wood products, food processing, petroleum refining, fishing

Industrial production growth rate: 12.1% (2010 est.)[2]

Electricity - production: 59.19 billion kWh (2009 est.)[2]

Electricity - consumption: 54.4 billion kWh (2009 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: $53.98 billion (2013)[103]$54.17 billion (2011 est.); $69.46 billion (2010 est.)[2][104]

Exports - commodities: semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, fruits[2]

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)[2]

Imports: $61.831 billion (2013),[103] $68.84 billion (2011 est.)[2]

Imports - commodities: electronic products, mineral fuels, machinery and transport equipment, iron and steel, textile fabrics, grains, chemicals, plastic[2]

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)[2]

Debt - external: $62.41 billion (31 December 2011 est.)[2]

Currency: 1 Philippine peso (₱) = 100 centavos Exchange rates: Philippine pesos (PHP) per US dollar - 42.45 (2013

average),[105] 42.43 (2012 average),[105] 43.44 (2011), 45.11 (2010), 47.68(2009), 44.439 (2008), 46.148 (2007), 51.246 (2006),[2] 55.086 (2005[citation

needed])

Government budget[edit]Main article: Fiscal policy of the Philippines

The national government budget for 2012 has set the following budget allocations:[106] Noticeably enough, the Department of Science & Technology[107] 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.[36]

Budget AllocationMillions of

Pesos(PHP)

Millions of USDollars(USD)

 %

Department of Education ₱238,800 $5,513.7 13.15

Department of Public Works and Highways 126,400 2,918.5 6.9

6

Department of National Defense 108,100 2,496.0 5.95

Department of Interior and Local Government 99,800 2,304.3 5.5

0

Department of Agriculture 61,400 1,417.7 3.38

Department of Social Welfare and Development 48,800 1,126.8 2.6

9

Department of Health 45,800 1,057.5 2.52

Department of Transportation and Communications 34,700 801.2 1.9

1

State Universities and Colleges 25,800 595.7 1.42

Department of Finance 23,600 544.9 1.30

Department of Environment and Natural Resources 17,500 404.1 0.9

6

See also[edit]Economy portal

Philippines portal

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

PHILIPPINES

GDP (2008): $320.6 billion.Annual GDP growth rate (2008): 4.6%.GDP per capita (2008): $3,300.Natural resources: Copper, nickel, iron, cobalt, silver, gold.Agriculture: .Products: rice, coconut products, sugar, corn, pork, bananas, pineapple products, aquaculture, mangoes, eggs.Industry: .Types: textiles and garments, pharmaceuticals, chemicals, wood products, food processing, electronics assembly, petroleum refining, fishing.Trade (2008): .Exports: $49 billion. .Imports: $58 billion

Budget: Income .............. $26.5 BillionExpenditure ... $28.2 Billion

Main Crops: Rice, coconuts, corn, sugarcane, bananas, pineapples, mangoes; pork, eggs, beef; fish.

Natural Resources: Timber, petroleum, nickel, cobalt, silver,

gold, salt, copper. 

Major Industries: Textiles, pharmaceuticals, chemicals, wood products, food processing, electronics assembly, petroleum refining, fishing.NATIONAL GNP

Since the end of the Second World War, the Philippine economy has had a mixed history of growth and development. Overthe years, the Philippines has gone from being one of the richest countriesin Asia (following Japan) to being one of the poorest. Growth immediately after the war was rapid, but slowed over time. A severe recession in 1984-85 saw the economy shrink by more than 10%, and perceptions of political instability during the Aquino administration further dampened economic activity. During his

administration, President Ramos introduced a broad range of economic reforms and initiatives designed to spur business growth and foreign investment. As a result, the Philippines saw a period of higher growth, but the Asian financial crisis triggered in 1997 slowed economic development in the Philippines once again. President Estrada managed to continue some of the reforms begun by the Ramos administration. Important laws to strengthen regulation and supervision of the banking system (General Banking Act) and securities markets (Securities Regulation Code), to liberalize foreign participation in the retail trade sector, and to promoteand regulate electronic commerce were enacted during his abbreviated term. Despite occasional challenges to her presidency and resistance to pro-liberalization reforms by vested interests, President Gloria Macapagal-Arroyo has made considerable progress in restoring macroeconomic stability with the help of a well-regarded economic team. However, despite recent progress, fiscal problems remain one ofthe economy's weakest points and its biggest vulnerability.

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. Mining also

has great potential in the Philippines,which possesses significant reserves ofchromite, nickel, and copper. Significant natural-gas finds off the islands of Palawan have added to the country's substantial geothermal, hydro, and coal energy reserves.

Today's EconomyThe Philippines was less severely affected by the Asian financial crisis than its neighbors, aided in part by more than $7 billion in annual remittances from overseas Filipino workers. Except for 1998 -- when drought and weather-related disturbances pulled down agricultural harvests, combining with the contraction in industrial sector production -- real Gross Domestic Product (GDP) has recorded positive growth year-on-year. From a 0.6% decline in 1998, GDP expansion picked up in 1999 (3.4%) and 2000 (4.4%) but slowed to barely 2% in 2001 in the context of a global economic slowdown, export slump, and domestic as well as global political and security concerns.Year-on-year GDP growth accelerated to 4.3% in 2002, reflecting the continued resilience of the service sector, gainsin industrial sector output, and recovering exports. The economy exhibited resilience during 2003 with 4.7% GDP growth, notwithstanding serious external and domestic shocks. (including the Iraq War, SARS, uncertainties over global economic prospects, sovereign credit-rating

downgrades, and resurgent law-and-orderworries).It will take a higher, sustained economic-growth path to make more appreciable progress in poverty alleviation given the Philippines' highannual population growth rate of 2.36 percent -- one of the highest in Asia.

Agriculture generally suffers from low productivity, low economies-of-scale, and inadequate infrastructure support. Agricultural output fell in 1997 and 1998 due to an El Ni?o-related drought but increased by 6.0% in 1999 (over 1998's low base). Growth reverted to more normal rates in 2000 (4.0%) and 2001 (3.7%). Agricultural output (affected by another, albeit milder, dry spell) expanded by 3.8% year-on-year in 2002 and in 2003.

The global economic and electronics-demand slowdown combined with softer prices of resource-based commodities todepress export performance in 2001. Full-year export receipts -- which lastdeclined in 1985 -- contracted by 16.2%year-on-year, dragged down by a nearly 24% drop in revenues from shipments of electronic and telecommunications partsand equipment (which comprise about 60%of annual export revenues). Reflecting improved levels of intra-Asia trade, export receipts expanded from April-December 2002, breaking from 14 consecutive months of negative year-on-year growth and nudging up the full-year 2002 export growth rate to positive territory (10%). Weaker global

demand saw 2003 export revenues sputterto 1.4% growth. Export receipts were up5% year-on-year during the first quarter of 2004.

Although less severely affected than its neighbors, the Philippines' bankingsector was not spared from high interest rates and non-performing loan (NPL) levels during the Asian financialcrisis and its aftermath. Increases in minimum capitalization requirements, increasing loan-loss provisions, and generally healthy capital-adequacy ratios have helped temper systemic risk. Philippine banks? average NPL ratio, which peaked at 18% in 2002, hassince stabilized to between 14%-15%. However, this current performance now lags most hard-hit neighboring countries that have moved more aggressively to address their NPL problem The burden of non-performing assets has squeezed profit margins and inhibited bank lending, posing risks tothe longer-term viability and stabilityof the banking system.

As of end-December 2003, the Philippinepeso (which closed at P55.50) had weakened by 4.7% year-on-year and by more than 110% vis-?-vis the US dollar?since mid-1997, reflecting uncertainties over export and balance of payments prospects, resurgent peace-and-order worries, and political uncertainties in the run-up to the May 2004 national elections. Elsewhere, there have been some recent, positive

developments in the Philippine economy.Year-on-year inflation, a perennial problem in the Philippines, is under control. Year-on-year inflation averaged 3.1% during 2002 and 2003, thelowest since 1987, tempered in part by generally stable food prices, under-utilized capacities, still high unemployment, and government efforts tocontrol utility-rate increases. The Government expects to contain average inflation within a 4%-5% range during 2004 despite cost-push pressures from oil price increases and public utility rate adjustments The monetary authority?s adoption since January 2002of an inflation-targeting framework hasenhanced price stability. Although under pressure due in part to higher inflation expectations, domestic interest rates have tapered significantly in recent years, aided bymoderate inflation and a stable monetary policy. The Government -- which is targeting lower fiscal deficits starting 2003 toward balancingthe budget by 2009 -- contained the full-year 2003 budget deficit to 4.6% of GDP, reflecting spending restraint and more vigorous efforts by tax collection agencies to improve administration, enforcement, and governance.

The Aquino and Ramos administrations opened up the relatively closed Philippine economy and provided a firmer base for sustainable economic growth. After a slow start, President

Estrada and his cabinet continued with,and expanded, liberalization and market-based policies and reforms. Efforts to reform the constitution to encourage foreign investment, particularly foreign ownership of land,were abandoned amidst nationalist opposition. Initial optimism about prospects for economic reform also had dimmed amid concerns of governmental corruption. Scandals involving the Philippine Stock Exchange, and the President's close ties to certain businessmen, shook confidence of investors and the business community and ultimately led to successful efforts to impeach and remove PresidentEstrada.

President Macapagal-Arroyo is working to continue with economic reforms in areas beyond retail trade, electronic commerce, banking reform, and securities regulation. Her administration enacted an anti-money laundering law in September 2001 and followed through with amendments in March 2003 to address remaining legal concerns posed by the OECD Financial Action Task Force (FATF). While the Philippines has avoided FATF countermeasures, effective implementation will be key to the Philippines? removal from the FATF?s watch list of "noncooperating countriesand territories." Although encounteringimplementation hitches, her administration also enacted legislationto rationalize and privatize the

electric power sector. In January 2003,President Macapagal-Arroyo signed into law two priority initiatives to reform the government procurement system (the Government Procurement Reform Act) and to help ease the burden of non-performing assets on the financial sector through the establishment of private asset management companies (theSpecial Purpose Vehicle Act).

During the first quarter of 2004, she signed into law legislation to rationalize and plug leakages in the Philippines? convoluted documentary stamp tax system and encourage secondary trading of financial instruments, as well as legislation (the Securitization Act) towards establishing the necessary infrastructure and market environment for a wide range of asset-backed securities. She also signed legislationto institutionalize Alternative DisputeResolution for civil cases to help address the problem of overburdened court dockets.

Notwithstanding favorable developments,the Philippine economy continues to juggle extremely limited financial resources while attempting to meet the needs of a rapidly expanding populationand address intensifying demands for the current administration to deliver on its anti-poverty promises. The current high level of government debt, the substantial share of foreign obligations, the emerging risks posed

by contingent liabilities (particularlythose of the Government?s debt-saddled power generation firm, the National Power Corporation), and the worrisome deterioration in the tax collection performance over the past five years have increased the country?s vulnerability to severe external and domestic shocks. Reflecting weaknesses in intellectual property rights protection, the country remains on the U.S. Trade Representative's Special 301Priority Watchlist. Potential foreign investors, as well as tourists, continue to be concerned about law and order, inadequate infrastructure, and governance issues. While trade liberalization presents significant opportunities, intensifying global competition and the emergence of low-wage export economies also pose challenges. Competition from other Southeast Asian countries and from China for investment underlines the need for sustained progress on structural reforms to remove bottlenecks to growth, lower costs of doing business, and promote good publicand private sector governance.

Agriculture and Forestry Arable farmland comprises more than 40%of the total land area. Although the Philippines is rich in agricultural potential, inadequate infrastructure, lack of financing, and government policies have limited productivity gains. Philippine farms produce food crops for domestic consumption and cash

crops for export. The agricultural sector employs nearly 40% of the work force but provides less than one-fifth of GDP.

Decades of uncontrolled logging and slash-and-burn agriculture in marginal upland areas have stripped forests, with critical implications for the ecological balance. The government has instituted conservation programs, but deforestation remains a severe problem.

With its 7,107 islands, the Philippineshas a very diverse range of fishing areas. Notwithstanding good prospects for the agriculture subsector, the marine fishing industry continues to face a bleak future due to destructive fishing methods, a lack of funds, and inadequate government support.

IndustryIndustrial production is centered on processing and assembly operations of the following: food, beverages, tobacco, rubber products, textiles, clothing and footwear, pharmaceuticals,paints, plywood and veneer, paper and paper products, small appliances, and electronics. Heavier industries are dominated by the production of cement, glass, industrial chemicals, fertilizers, iron and steel, and refined petroleum products.

The industrial sector is concentrated in the urban areas, especially in the metropolitan Manila region and has only

weak linkages to the rural economy. Inadequate infrastructure, transportation and communication have so far inhibited faster industrial growth, although significant strides have been made in addressing the last of these elements.

MiningThe country is well-endowed with mineral and thermal energy resources. Arecent discovery of natural gas reserves off Palawan Island has been brought on-line to generate electricity. Philippine copper, gold and chromite deposits are among the largest in the world. Other important minerals include gold, nickel, silver, coal, gypsum, and sulfur. The Philippines also has significant deposits of clay, limestone, marble, silica, and phosphate.

Despite its rich mineral deposits, the Philippine mining industry is just a fraction of what it was in the 1970s and 1980s when the country ranked amongthe ten leading gold and copper producers worldwide. Low metal prices, high production costs, and lack of investment in infrastructure have contributed to the industry?s overall decline. A January 2004 Philippine Supreme Court decision prohibiting fullforeign ownership in mining operations under the 1995 Mining Act has further discouraged international investments in large-scale mining. Largely unregulated, small-scale operators

produce the majority of gold but contribute little to tax revenue and have virtually no environmental protection and amelioration programs.