The Economy of Philippines expanded by 6.6% in the year 2012, this level of growth rate was higher than that expected by the Government of Philippines. This high level of growth was boosted by strong private consumption and construction and the revival of public spending and net exports. The growth witnessed in 2012 was the highest amongst the ASEAN-5 countries. With an increased level of public as well as private construction spending, the fixed capitals to GDP ratio increased from 18.7% of GDP in the year 2011 to 19.3% in the year 2012.
Economic Performance :
There was a tremendous improvement in national government spending in the year 2012. Total disbursements grew by 14.1 percent to reach PHP 1.78 trillion. The maximum increases were observed in infrastructure expenditure, maintenance and operating expenditures. This high level of government spending was matched by a momentous rise in revenue collection, with a robust contribution from improved tax administration. The year 2012 witnessed the highest increase in tax collection, tax revenues increased by 13.2 percent and tax effort increased from 12.3 to 12.9 percent of GDP.
Philippines Economic Performance 1980-2013
|Year||GDP %||Inflation %||Year||GDP %||Inflation %|
Source: World Bank
Philippines GDP :
GDP growth rate of 6.2% is predicted for the year 2013, projected to be driven by domestic demand. Private consumption would provide the foundation for future growth. Persistent increase in investment, mainly in construction, and higher government spending, would act as driving forces. Economic growth rate of 6.4% is projected for the year 2014, but the target is expected to realize only if government is able to further increase its spending in infrastructure and the private sector also reinforces increased investment spending. The risks to growth might also arise as a result of slower global recovery, probable asset price bubbles in the real estate sector and stock market.
Philippines Economy & Financial Crisis :
Philippines has battered with the impact of the financial crisis and global meltdown very well because of its robust macroeconomic fundamentals and policy reforms. The country’s quick recovery and strong growth projections, robust external accounts and improved fiscal consolidation has helped it to earn its first ever investment grade credit rating in March 2013, followed by another upgrade in May 2013.
Philippines Economy out performed many major Asian economies in the wake of the global economic crisis because of the government’s sound economic policies that boost the infrastructure development and a strong macro-economic environment. It has a low Inflation which helped the central bank to maintain the low level of interest rate and the consumer demand fueled the market growth.
Philippines Economic Future :
A big challenge being faced by the government of Philippines is that of providing good jobs to 14.4 million Filipinos through 2016. A growth rate of 6.2% in 2013 is expected to create good job opportunities, meeting employment needs of about 2.2 million people. However, 12.4 million Filipinos will still be facing unemployment problem and would be left with no option than to work abroad, work in the informal sector, or create jobs for themselves. In January 2013, the labor force participation rate fell to 64.1 percent from 64.3 percent a year ago, reflecting a rise in the number of discouraged workers. Though the rate of unemployment subsided to 7.1 percent but the underemployment rate has risen by almost 2 ppt to 21 percent.
To meet this challenge the formal sector employment opportunities needs to be increased more rapidly, while the wage rates in the informal sector needs to be increased. The following areas deserve more attention:
• Simplification of business regulations to promote the growth of firms of all sizes.
• Enhancing competition in the economy, giving priority to agricultural or other such thrust sectors.
• Secured property rights on land for both rural and urban inhabitants and businesses.
• Increased government spending in health, education, and infrastructure.
Philippines Economic Structure :
The Filipino Economy is the one of the major emerging markets in Asia , It transitioned from Agrarian Economy to Industrial Economy focusing more towards the growth of service and manufacturing sector. Currently it is 40th largest economy in the world which is expected to grow to 15th largest economy till 2050. Philippine has a robust service sector which contributes to 54.4% of the GDP followed by industry and manufacturing sector contributes 33.3%. Agriculture which used to be a dominant sector now contributes only 12.3% of the economic value but still employs a large segment of the market. Industrial manufacturing sector involves Electronics and high tech components in Electronics, Automobile, Ship Repair, Heavy machinery, Textile Industry, Food Processing Industry,Mining Industry. The industrial sector started to grow after 1960 and developed very fast. Philippine is now considered as an Industrialized Country.
Philippine Economic History :
After the World War II , Philippines Economy showed a very rate of growth, then the growth rate declined and after the Asian Financial Crisis, the economy experienced a serious fall. The economic down turn continued till 2001, after the long period of depression , It started to grow from 2001 to 2007 reaching a growth rate of 6.6%.
|Last Updated on : 09th March 2015||Next Update : February 2016|