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flag Philippines Philippines: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

The Philippines' economy has strengthened in the recent years, a fact that protected it from the direct impacts of the global financial crisis and the recession in 2009, but without sparing it totally. In spite of unfavorable international context, growth reached 7.2% in 2013, thanks to domestic consumption, employment and vigorous FDI flows. Growth of 6.5%-7.5% of the GDP is expected in 2014.

In November 2014, the new "Asian Tiger" was hhit by the typhoon Haiyan, one of the most powerful since records began, which cost many lives and caused great demange to the infrastructure and agricultural sector. The economy is nevertheless in a relatively good shape and the country has large foreign exchange reserves. The government's priority remains fighting against poverty and unemployment.The 2014 budget, which has increased by 13% compared to the 2013 budget, introduces many reform measures in the area of public spending, trying to make the budget process more efficient and transparent (Performance informed budget). A great part of the budget has been allocated to social services, including subsidies and funding for school and healthcare establishments. Paving the national roads, providing technical support to farmers, promoting tourism and preventing and managing natural catastrophes are also part of the agenda. 

On a social level, the country faces several challenges: the population living under the poverty threshold has increased in these recent years (33% of the population), in 2009 the crisis aggravated the unemployment rate (7% of the active population), although it is now decreasing, there is a significant demographic growth and the inequality in wealth distribution persists.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 224.14250.24272.07289.69e330.26
GDP (Constant Prices, Annual % Change) 3.76.87.2e6.26.3
GDP per Capita (USD) 2,3792,61222,913e3,256
General Government Balance (in % of GDP) -0.2-0.7-0.3-0.7-1.5
General Government Gross Debt (in % of GDP) 41.440.639.1e36.333.9
Inflation Rate (%) 4.73.22.94.53.9
Unemployment Rate (% of the Labor Force) 7.07.07.16.96.8
Current Account (billions USD) 5.656.959.42e9.18e8.55
Current Account (in % of GDP) 2.52.83.5e3.2e2.6

Source: IMF - World Economic Outlook Database , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

The agricultural  sector employs about 35% of the labor force but contributes to less than 13% of the GDP. The Philippines is one of the world's main producers of rice and coconut. However, the agricultural sector suffers from low productivity, weak economies of scale and inadequate infrastructures. Fishing contributes to 3% of the GDP. The Philippines is one of the richest countries of the world in terms of minerals with an unexploited mineral wealth estimated at more than USD 840 billion. The Philippines reserves of copper, gold and zinc are among the largest of the world. 

The manufacturing sector contributes to around 30% of the GDP. Industrial food processing is one of  the Philippines' main manufacturing activities. The big industries are dominated by the production of cement, glass, chemicals products and fertilizers, iron, steel, and refined oil products.

The tertiary sector, which represents more than 55% of the GDP, has developed substantially especially in the fields of telecommunications, calling centers, and finance.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 32.2 15.4 52.5
Value Added (in % of GDP) 11.2 31.1 57.7
Value Added (Annual % Change) 10.5 9.3 -

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
Philippine Peso (PHP) - Average Annual Exchange Rate For 1 USD 47.6845.1143.3142.2342.45

Source: World Bank - Last Available Data.

 
 

Learn more about Market Analyses about the Philippines on Globaltrade.net, the Directory for International Trade Service Providers.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
60.1/100
Position:
Moderately Free
World Rank:
89/178
Regional Rank:
15/25

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
6.28
World Rank:
53/82

Source: The Economist - Business Environment Rankings 2014-2018

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

During these two last decades, the Philippines' economy, which was relatively closed, has opened up, partly due to itsASEAN (Association of South-East Asian Nations) membership. Trade represents almost 60% of the country's GDP (average 2010-2012). Its three main export partners are the United States, Japan and China. The main export commodities are electronic and electrical equipment, nuclear reactors and boilers, vehicles and clothing. Its three main import partners are the United States, Japan and Singapore. The main import commodities are electronics and electrical equipment, mineral fuels and oil, nuclear reactors and boilers, iron, steel and vehicles.

Traditionally, the Philippines has a deficit trade balance. However, there is a trend towards the reduction of this deficit because of exports rising more quickly than imports. IN 2013, imports declined by 0.7%, reducing the deficit to 7.7b USD, against 10b in 2012. Trade should accelerate in 2014.

 
Foreign Trade Indicators 20092010201120122013
Imports of Goods (million USD) 45,87858,46863,69365,35064,980
Exports of Goods (million USD) 38,43651,49648,30551,99553,977
Imports of Services (million USD) 8,47711,12912,06614,09315,752
Exports of Services (million USD) 10,24814,09517,71118,47822,279
Imports of Goods and Services (Annual % Change) -8.122.5-0.64.95.4
Exports of Goods and Services (Annual % Change) -7.821.0-2.58.5-1.1
Imports of Goods and Services (in % of GDP) 33.436.635.733.932.0
Exports of Goods and Services (in % of GDP) 32.234.832.030.827.9
Trade Balance (million USD) -13,860-16,859-20,428-18,926-17,702
Trade Balance (Including Service) (million USD) -8,962-11,094-13,866-12,747-11,274
Foreign Trade (in % of GDP) 65.671.467.764.759.9

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
Japan 21.2%
United States 14.5%
China 12.2%
Hong Kong 8.2%
Singapore 7.4%
See More Countries 36.5%
Main Suppliers
(% of Imports)
2013
China 13.1%
United States 10.9%
Japan 8.6%
South Korea 7.7%
Singapore 6.8%
See More Countries 52.9%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Electronic integrated circuits and microassembliesElectronic integrated circuits and microassemblies 17.4%
Automatic data processing machines and units...Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s. 6.5%
Diodes, transistors and similar semiconductor...Diodes, transistors and similar semiconductor devices; photosensitive semiconductor devices, incl. photovoltaic cells whether or not assembled in modules or made-up into panels (excl. photovotaic generators); light emitting diodes; mounted piezo-electric crystals; parts thereof 6.3%
Builders' joinery and carpentry, of wood, incl....Builders' joinery and carpentry, of wood, incl. cellular wood panels, assembled parquet panels, shingles and shakes, of wood (excl. plywood panelling, blocks, strips and friezes for parquet flooring, not assembled, and pre-fabricated buildings) 5.6%
Electrical transformers, static converters, e.g....Electrical transformers, static converters, e.g. rectifiers, and inductors; parts thereof 3.2%
See More Products 61.0%
- bn USD of products imported in 2013
Electronic integrated circuits and microassembliesElectronic integrated circuits and microassemblies 16.3%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 10.2%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 8.1%
Parts and accessories (other than covers, carrying...Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with machines of heading 8469 to 8472, n.e.s. 3.3%
Powered aircraft e.g. helicopters and aeroplanes;...Powered aircraft e.g. helicopters and aeroplanes; spacecraft, incl. satellites, and suborbital and spacecraft launch vehicles 3.1%
See More Products 59.0%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 
 
 

Main Services

- bn USD of services exported in 2012
53.28%
22.19%
11.25%
8.70%
2.69%
0.61%
0.50%
0.44%
0.24%
0.07%
0.04%
- bn USD of services imported in 2012
43.39%
34.05%
10.72%
3.50%
2.53%
2.06%
1.34%
1.10%
0.78%
0.29%
0.24%

Source: Comtrade, Last Available Data

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Sources of General Economic Information

Ministries
Ministry of Economic Cooperation and Development
Department of Finance
Ministry of Agriculture 
Ministry of Commerce and Industry
Statistical Office
National statistical office
National Statistical Coordination Board
Central Bank
Central Bank of the Philippines
Stock Exchange
Philippines Stock Exchange
Search Engines
Cybertambayan
Edsa
Pinoy Search
Tanikalang Ginto
Economic Portals
Asiaweek
Philippine Business

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Political Outline

Executive Power
The President is both the head of the state and the head of the government. The President is elected by a popular vote to serve a single six-year term. He presides over and appoints the cabinet members. The President holds the executive powers which include the implementation of the law in the country and running the day-to-day affairs. The President is also the commander-in-chief of the armed forces.
Legislative Power
The legislature in the Philippines is bicameral. The parliament, called the Congress, consists of: the Senate (the upper house) having 24 seats with its members elected mostly by popular vote to serve six-year terms, and the House of Representatives (the lower house) having up to a maximum of 250 seats, with its members elected by popular vote to serve three-year terms. The President has the power to veto acts of the legislature, and in turn a supermajority (generally two—thirds) of legislators may act to override his veto. The people of the Philippines enjoy considerable political rights.
Main Political Parties
The Philippines has a multi-party system and political parties have diverse ideologies. As a result, parties generally work together to form coalition governments. The major political parties in the country are:
- Lakas-CMD (Lakas-Christian Muslim Democrats)- a right-of-centre conservative political party;
- LP (Liberal Party) - liberals;
- NPC (Nationalist People's Coalition) – a nationalist left-wing party;
- LDP (Struggle of Filipino Democrats) – a union of democratic parties;
- AD (Democratic Action) - mainstream political party that advocates "non-traditional" means of politics.
Current Political Leaders
President: Benigno S. AQUINO III (since June 2010), Liberal Party.
Next Election Dates
Presidential: May 2016
Senate: May 2016
House of Representatives: 2016
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
149/180
Evolution:
2 places down compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Partly Free
Political Freedom:
3/7

Map of freedom 2014
Source: Freedom House

 

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Last Updates: October 2014