PHILIPPINE ECONOMY
CAPITAL : MANILA CITY
CURRENCY : PHILIPPINE PESO
The economy of the Philippines is the world's 34th largest economy by nominal GDP according
to the 2017 estimate of the International Monetary Fund's statistics, it is the 13th largest economy in
Asia, and the 3rd largest economy in the ASEAN after Indonesia and Thailand. The Philippines is one of
the emerging markets and is the sixth richest in Southeast Asia by GDP per capita values, after the
regional countries of Singapore, Brunei, Malaysia, Thailand and Indonesia.
The Philippines is primarily considered a newly industrialized country, which has an economy in
transition from one based on agriculture to one based more on services and manufacturing. As of 2017,
GDP by purchasing power parity was estimated to be at $1.980 trillion.
The Philippines has been named as one of the Tiger Cub Economies together with Indonesia,
and Thailand. It is currently one of Asia's fastest growing economies.
ECONOMIC HISTORY
Pre-Colonial Era (900s–1565)
Barter system
Spanish Era
The natives were slavered among them by other tribes like Lapu-Lapu which forced other islands
to pay taxes. The arrival of the Spanish removed this slavering system.
The economy of Islas Filipinas grew further when the Spanish government inaugurated
the Manila Galleon trade system. Trading ships, settlers and military reinforcements made
voyages once or twice per year across the Pacific Ocean from the port of Acapulco in Mexico
to Manila in the Philippines. Both cities were part of the then Province of New Spain.
First Philippine Republic (1899–1901)
The economy of the Philippines during the insurgency of the First Philippine Republic remained
the same throughout its early years but was halted due to the break out of the Philippine–
American War. Nevertheless, during the era of the First Republic, the estimated GDP per
capita for the Philippines in 1900 was of $1,033.00. That made it the second richest place in all
of Asia, just a little behind Japan ($1,135.00), and far ahead of China ($652.00) or India
($625.00).
American Era (1901–35)
When the Americans defeated the first Philippine Republic and made the Philippines a showcase
territory of the United States, the country saw a redevelopment under the American system.
Economy as well was re-developed. The Philippines saw the growth of the economy once again
after the war as the Americans built new public schools, transportation, reform system,
boutiques, offices and civic buildings.
When the Great Depression happened in the United States, the Philippines on the other hand
wasn't affected. Instead, the US relied on the Philippine economy throughout the depression
era.
Commonwealth Era
When the United States granted the Philippines commonwealth status, the country enjoyed a
rapid growth of prosperity. Tourism, industry, and agriculture were among the largest
contributors to the economy. Products included abaca (a species of banana Janssen), coconuts
and coconut oil, sugar, and timber.
The performance of the economy was good despite challenges from various agrarian uprisings.
Taxes collected from a robust coconut industry helped boost the economy by funding infrastructure and
other development projects. The people enjoyed a first world economy until the time when the
Philippines was dragged into World War II. This led to a recession in the economy.
Marcos Era (1965–86)
President Ferdinand E. Marcos declared martial law in the midst of rising student movements
and an increasing number communist and socialist groups lobbying for reforms in their
respective sectors.
Aquino administration
The Aquino administration took over an economy that had gone through socio-political disasters during
the People Power revolution, where there was financial and commodity collapse caused by an overall
consumer cynicism, a result of the propaganda against cronies, social economic unrest resulting from
numerous global shortages, massive protests, lack of government transparency, the opposition's
speculations, and various assassination attempts and failed coups. At that point in time, the country's
incurred debt from the Marcos Era's debt-driven development began crippling the country, which slowly
made the Philippines the "Latin-American in East Asia" as it started to experience the worst recession
since the post-war era.
Statistics
GDP
$356.682 billion (nominal, 2019 est.)
$1.032 trillion (PPP, 2019 est.)
GDP rank
38th (nominal, 2018)
28th (PPP, 2018)
GDP growth
6.9% (2016) 6.7% (2017)
6.2% (2018e) 6.4% (2019f)
GDP per capita
$3,280 (nominal, 2019 est.)
$9,493 (PPP, 2019 est.)
GDP per capita rank
127th (nominal, 2018)
112th (PPP, 2018)
GDP by sector
agriculture: 7.4%
industry: 34%
services: 58.6%(2018)
Statistics
Inflation (CPI)
2.4% (July 2019)
Population below poverty line
21.6% below poverty line (2015)
32.6% on less than $3.20/day (2015)
Labor force
44.1 million (June 2018)
Labor force by occupation
services: 55.9%
agriculture: 26.0%
industry: 18.1%
(2018 est.)
Statistics
Unemployment 5.3% (June 2018)
Main industries
Electronics assembly, aerospace, business process out sourcing, food
manufacturing, shipbuilding, chemicals, textiles, garments, metals, petroleum
refining, fishing, steel, rice.
Ease-of-doing-business rank
124th (2019)
Export
$68.712 billion (2017)
Export goods
semiconductors and electronic products
transport equipment
Garments
copper products
petroleum products
coconut oil
fruits
Main export partners
United States 15.6%
Hong Kong 14.2%
Japan 14%
China 12.9%
Singapore 6.3%
Germany 4.2%
Thailand 4%
Imports
$96.093 billion (2017)
Import goods
electronic products
mineral fuels
machinery and transport equipment
iron and steel
textile fabrics
Grains
Chemicals
plastic
Main import partners
China 18.6%
Japan 11.8%
United States 9%
Thailand 7.3%
South Korea 6.1%
Singapore 6.1%
Indonesia 5.1%
Macroeconomic trends
The Philippine economy has been growing steadily over decades and the International Monetary
Fund in 2014 reported it as the 39th 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 grouped in a second tier for emerging markets or newly
industrialized countries. Depending on the analyst, this second tier can go by the name the Next
Eleven or the Tiger Cub Economies.
A chart of selected statistics showing trends in the gross domestic product of the Philippines using data
taken from the International Monetary Fund.
Composition by Sector
As a newly industrialized country, the Philippines is still an economy with a large agricultural sector;
however, services have come to dominate the economy.Much of the industrial sector is based on
processing and assembly operations in the manufacturing of electronics and other high-tech
components, usually from foreign multinational corporations.
Filipinos who go abroad to work–-known as Overseas Filipino Workers or OFWs—are a significant
contributor to the economy but are not reflected in the below sectoral discussion of the domestic
economy. OFW remittances is also credited for the Philippines' recent economic growth resulting in
investment status upgrades from credit ratings agencies such as the Fitch Group and Standard &
Poor's. In 1994, more than $2 billion USD worth of remittance from Overseas Filipinos were sent to the
Philippines. In 2012, Filipino Americans sent 43% of all remittances sent to the Philippines, totaling to
US$10.6 billion.
Sectors
Agriculture
Shipbuilding and repair
Automotive
Aerospace
Electronics
Mining and extraction
Offshoring and outsourcing
Tourism
Natural Resources
The Philippines is rich in natural resources. It has fertile, arable lands, diverse flora and fauna, extensive
coastlines, and rich mineral deposits. About 30% of the land area of the country was determined be
geologically prospective by the Philippine Mines and Geo-Sciences Bureau. But Only 1.5% of country's
land area is covered with mining permits. Despite the rich natural resources of the Philippines, the
government is restricting its exploitation. A logging ban is imposed on many areas of the country and
only in select areas are "sustainable logging" allowed. However illegal logging and small-scale illegal
mining continues is many areas. In July 2012, President Benigno Aquino III ordered a stop to all mining
activities in all (78 areas) protected and eco-tourism sites. A positive step in the right direction to protect
the natural resources of the Philippines.
Economic challenges / issues
Corruption
Instability
Security issues
Regulations and Government Legislations as well as Protectionist laws
Philippine Development Plan 2017-2022
Overall Framework
We are building a future where every Filipino enjoys a matatag, maginhawa, at panatag na
buhay. Just like any building construction, we begin by laying down a strong foundation for more
inclusive growth, a high-trust and resilient society, and a globally-competitive knowledge
economy.
The impact will be manifested in the
following outcomes:
The Philippines will be an upper middle-income country by 2022.
Growth will be more inclusive as manifested by a lower poverty incidence
in rural areas – from 30 percent in 2015 to 20 percent in 2022.
The Philippines will have a high level of human development by 2022.
The unemployment rate will decline from 5.5 percent to 3-5 percent in 2022.
There will be greater trust in government and in society.
Individuals and communities will be more resilient.
Filipinos will have greater drive for innovation.
Strategic Outcomes
A matatag, maginhawa, at panatag na buhay by 2040 will be achieved if we are able to lay down the
foundation for inclusive growth, a high-trust and resilient society, and a globally-competitive knowledge
economy by 2022. This goal will be supported by three pillars - Malasakit, Pagbabago, and Patuloy na
Pag-unlad – which are further supported by strategic policies and macroeconomic fundamentals, and
built on a solid bedrock of safety, peace and security, infrastructure, and a healthy environment.
Major strategic outcomes
Pillar 1: Enhancing the social fabric (Malasakit): There will be greater trust in public institutions and
across all of society. Government will be people-centered, clean, and efficient. Administration of justice
will be swift and fair. There will be greater awareness about and respect for the diversity of our cultures.
Pillar 2: Inequality-reducing transformation (Pagbabago):
There will be greater economic opportunities, coming from the domestic market and the rest of the
world. Access to these opportunities will be made easier. Special attention will be given to the
disadvantaged subsectors and people groups.
Pillar 3: Increasing growth potential (Patuloy na Pag-unlad):
Many more will adopt modern technology, especially for production. Innovation will be further
encouraged, especially in keeping with the harmonized research and development agenda. And in order
to accelerate economic growth even more in the succeeding Plan periods, interventions to manage
population growth will be implemented and investments for human capital development will be
increased.
Enabling and supportive economic environment:
There will be macroeconomic stability, supported by strategic trade and fiscal policies. A strong and
credible competition policy will level the playing field and encourage more investments.
Bedrock:
There will be significant progress in the pursuit of just and lasting peace, security, public order, and
safety. Construction of strategic infrastructure that promotes growth, equity, and regional development
will be accelerated. At the same time, there will be stronger institutions and more effective protocols to
ensure ecological integrity, clean and healthy environment.
