Find Business Partners in The Philippines
Search by Category
  

 
The Philippines and the Economy
The Philippines: General Economy
and Export Industry
Economic overview

The Philippine economy has remained resilient amidst global headwinds and a slower-than-expected global recovery. The Philippine Statistics Authority data showed that the country’s GDP grew faster than expected by 6.9 percent in the third quarter of 2017, driven by the manufacturing , trade and real estate, renting and business activities. This is the fastest growth in the last four quarters.

Among the major economic sectors, Industry recorded the fastest growth of 7.5 percent followed by Services with 7.1 percent growth. Meanwhile, Agriculture slowed down by 2.5 percent from 3.0 percent growth in the previous year.

Net Primary Income from the Rest of the World (NPI) grew by 5.7 percent compared with the 4.1 percent growth recorded in the same quarter of the previous year. As a result, Gross National Income (GNI) posted a growth of 6.7 percent.

With the country’s projected population reaching 104.9 million in the third quarter of 2017, per capita GDP grew by 5.4 percent. While per capita GNI and per capita Household Final Consumption Expenditure grew by 5.2 percent and 3.0 percent, respectively.

The Duterte administration targets an economic growth of 6.5% to 7.5% for full-year 2017, to maintain the Philippines' position as one of the fastest growing in Asia.

Meanwhile, the Asian Development Bank upgraded the country’s GDP forecast to 6.8 percent from the previous 6.7 percent, “attributing to the growth in the government’s infrastructure program supported by improvements in budget execution with more large investment projects underway”.

Prospects and risks

The Philippines’ growth outlook remains positive. The World Bank projects that real GDP will grow at a rate of 6.9 percent in 2017 and 2018. Supported by sound domestic macroeconomic fundamentals and an accelerating recovery among other emerging markets and developing economies, the Philippines is expected to remain one of East Asia’s top growth performers. The government’s commitment to further increasing public infrastructure investment is expected to sustain the country’s growth momentum through 2018 and reinforce business and consumer confidence. Strong and inclusive economic growth is projected to further increase household consumption and speed the pace of poverty reduction.

The country’s growth prospects are subject to several important downside risks. On the external front, rising global interest rates could weaken the peso, adversely affecting capital flows to the Philippines and driving up domestic inflation. Commodity prices, specifically global crude oil prices, are projected to rise in 2017, which could also increase inflationary pressures. On the domestic front, strong macroeconomic fundamentals have opened some fiscal space for the government to implement its public investment and social spending agenda, but the success and timeliness of the administration’s planned tax reforms will be vital to preserve fiscal sustainability. Moreover, planning and implementation bottlenecks could diminish the government’s ability to implement its planned infrastructure investment program.

Over the medium term, the Philippines can leverage several emerging trends to accelerate its growth and development, including the potential of its very young and growing population and capitalizing on its growing services sector to accelerate its structural economic transformation. Sustaining the inclusive pattern of recent growth and taking advantage of the potential of its young population offers a brief window of opportunity which will require an enduring commitment to structural reforms that facilitate, on one hand, private investment, and, on the other hand, helps young workers to develop the appropriate skills to succeed in a dynamic labor market.

Source: World Bank, 2017

Philippine Exports

The Philippine Export Development Plan 2018-2022 (we can hyperlink this) will be a continuing plan of the previous PEDP (2015-2017) that will implement existing, as well as new export strategies and programs to boost export performance and achieve the export target of $122-130B by the end of the term.

The plan will embody the country’s export thrusts, strategies, programs and projects and shall be jointly implemented by the government, and export stakeholders. The PEDP is one of the most important elements of the International Trade Strategy.

Source: Philippine Statistics Authority, ADB’s Asian Development Outlook 2017 report and PEDP 2018-2022

 


 

 
Upcoming Events
Import Documentation Seminar
A seminar on Import and Export Procedures on Customs Common Bonded Warehouse (CCBW).