The Philippines and the Economy
The Philippines: General Economy
and Export Industry
The Philippine economy grew 7.2% in 2013, notching the second fastest increase in Asia after China. The growth is attributed to the expansion of investment and manufacturing as well as the strong performance of consumption and services which together helped offset the impact of a string of natural disasters throughout the year. Amid such robust performance, the Philippines has been hailed by many as the next economic tiger of Asia. It has enjoyed a string of upgrades in recent years from credit raters recognizing the country's improving fundamentals. On 27 March 2013, Fitch Ratings upgraded the Philippines' credit rating to BBB, giving the country its first ever investment to BBB, giving grade. This was followed by similar upgrades from Standard & Poor's (S&P), Japan Credit Agency, and Moody's Investor Service in the same year. S&P has since raised the country's rating a notch higher to BBB, noting in May 2014 the ongoing reforms in the Philippines.
Consumer spending, Overseas Filipino Workers (OFW) remittances, and the offshoring and outsourcing sector have been consistently driving Philippine economic growth. In 2012, government spending accelerated and complemented consumer spending. Public investment rebounded and led the resurgence in capital formation.
Other sectors such as transport, trade banking, and other services revved up alongside the growth of business process outsourcing (BPO). Finally, exports of commodities other than electronics and semiconductors improved.
The National Capital region continues to be the leading growth are in terms of population, residential projects and commercial projects. Cebu in the Visayas also appears in the top three in all three lists,. Negros Occidental in the Visayas and Cavite and Bulacan in Luzon complete the top five in population growth.
Cavite, Laguna and Rizal - all in Luzon - complete the top five in the residential projects list. Aklan in the Visayas, Pampanga in Luzon and Davao del Sur in Mindanao complete the top five in the commercial projects list.
Philippine merchandise exports hit a record high of USD53.98 billion in 2013. This turnaround contributed to the higher growth rate of the economy. The key markets for both exports and imports are Japan, China, USA, Singapore, and Korea.
Source: SGV & Co.
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 7.7% in the first quarter and 7.5% in the second quarter of 2013, the highest GDP growth rates in Asia for the first two quarters of 2013, followed by China and Indonesia.
GDP growth at constant 1985 prices in Philippine pesos.
Export Performance and Prospects
The Philippines exports continue with its upward trend throughout 2010. While US and Japan have remained the country's two largest export markets, China and ASEAN countries have grown in importance. Other key markets include Hong Kong, Germany, Netherlands, South Korea, France and India.
Besides diversifying its markets and increasing its concentration on the the production of goods and services with clear competitive advantage, Philippines is looking to further value add growth sectors such as IT-BPO and penetrate high growth markets in Asia to achieve the projected growth for the next 2 years.
Upcoming EventsImport Documentation Seminar
A seminar on Import and Export Procedures on Customs Common Bonded Warehouse (CCBW).