Economy
From The Report: The Philippines 2016
View in Online Reader

The Philippine economy continues to enjoy a period of rapid, broad-based growth as the business process outsourcing (BPO) sector and growing remittances from overseas workers drive growth in consumer-oriented industries and construction. Although real growth decelerated in 2014 to 6.1%, it remained higher than many of the country’s South-east Asian peers, and is expected to remain near 6% for the remainder of the decade. The economy is overly concentrated in the Metro Manila region, and major challenges lie ahead in overcoming long-standing infrastructure bottlenecks and developing stronger energy and manufacturing sectors. Yet the government is increasing its efforts to spread manufacturing and BPO growth across the country and clear obstacles to developing other sectors where outlying regions have strong potential. This chapter contains an interview with Cesar V Purisima, Secretary, Department of Finance; a roundtable with Manuel Pangilinan, Managing Director, First Pacific; Teresita Sy-Coson, Vice-Chairperson, SM Investments Corporation; and Jay Yuvallos, President, Interior Basics Export Corporation; and an interview with Atsi Sheth, Associate Managing Director, and Moody’s Investors Service.

Articles from this Chapter

Overview

Playing catch-up: Crucial infrastructure upgrades are planned to help sustain high rates of growth
OBG
plus

With GDP growth coming in at 5.8% for 2015, after averaging 6.2% from 2010-14, the Philippine economy is establishing a record of stable high growth rates. Markets have recently been focusing on short-term downside risks emanating from slowing growth in China and South-east Asia, and the Philippines’ farm and food-processing sectors were hit by a dry spell related to the El Niño phase of the Pacific weather cycle. Yet the long-term growth outlook for the country has improved. As an importer of…

Interview

Reform and enhance: OBG talks to Cesar V Purisima, Secretary, Department of Finance
OBG
plus

Interview:Cesar V Purisima To what extent can the Philippines institutionalise financial reforms and transparency? CESAR V PURISIMA: Over the past five years, we have instituted various public finance reforms, namely initiatives in bottom-up, zero-based and grassroots participatory budgeting. We have led with transparency, believing that open budgets and an open government lock in our path to prosperity. Apart from the national budget, we have striven to make revenues – especially in the…

Analysis

Hard currency: Although growth has slowed, remittances are expected to continue to support the economy
OBG
plus

The Philippine economy’s reliance on remittances from overseas Filipino workers is often seen as a vulnerability and a path by which turbulence in foreign markets can reach local shores. Those fears recently came to the fore after the growth of remittances slowed in 2014 and news reports appeared in the summer of 2015 suggesting remittances were in peril. Economists say the worries are overblown, however. Remittances have proved resilient over the years, growing even during the 2008-09 global financial…

Overview

Spread the news: OBG talks to Manuel Pangilinan, Managing Director, First Pacific; Teresita Sy-Coson, Vice-Chairperson, SM Investments; and Jay Yuvallos, President, Interior Basics Export Corporation
OBG
plus

Interview:Manuel Pangilinan, Teresita Sy-CosonandJay Yuvallos Which areas of economic activity are best positioned to benefit from deepening economic integration among ASEAN economies? MANUEL PANGILINAN: The macro numbers for integration are compelling. ASEAN will encompass a market of 600m people and a GDP of several trillion dollars. The trick in this process will be to successfully exploit a market that is not yet unified. In theory, ASEAN would mean 600m mouths to feed; however,…

Analysis

Hot topic: The fiscal focus is on boosting public spending – especially on infrastructure and social protection – and increasing revenues
OBG
plus

“Tax more, spend more” is the clear-cut recommendation of the IMF to the Philippines, delivered in no uncertain terms in its September 2015 annual report on the country’s economy and economic policies. The IMF “welcomed the government’s plan to step up infrastructure investment and social spending” and “encouraged further efforts … to mobilise revenue to meet the large social and infrastructure needs”. Low Spending As the IMF points out, the Philippines has long had a small government…

Interview

Raised ambitions: OBG talks to Atsi Sheth, Associate Managing Director, Moody’s Investors Service
OBG
plus

Interview:Atsi Sheth What factors have influenced the Philippines’ latest credit rating hike? ATSI SHETH: We last upgraded the Philippines’ sovereign rating in December 2014, acknowledging the continued progress on debt reduction, as well as strong economic performance compared to both regional peers and rating peers outside the region. Since then we have seen these trends remain intact, with GDP growth accelerating through 2015, as the pickup in domestic demand offset weak external demand. Looking…

Analysis

New agenda: The Cebu Action Plan aims to improve governance and ensure inclusive growth
OBG
plus

For a concise summary of the Philippines’ plans and aspirations for its economic future, the Cebu Action Plan (CAP) is probably the best place to start – even though it is aimed at a much broader area than the Philippines. The CAP is a jointly agreed document of the 21-member APEC forum, which the Philippines government drafted in its role as APEC chair for 2015. APEC finance ministers endorsed the plan at a meeting on Cebu’s Mactan Island in September, and national leaders formally adopted…

Analysis

Neighbourhood watch: Although China’s slowdown may not have a direct impact on the Philippine economy, risks remain
OBG
plus

Relative insulation from China has been a saving grace for the Philippines since 2014, helping sustain high growth rates as most other South-east Asian economies have slowed. Yet the Philippines will continue to be affected by the developing changes in China. Global Impact A crash of the Chinese equity market and a surge in capital flight in the summer of 2015 generated turbulence in capital markets worldwide. The Philippines felt a moderate impact: the peso fell against the dollar by 3.5% during…