Economic overview Philippines, in 36 editions.

The economy continues to recover from the political turmoil following the ouster of former President Marcos and several coup attempts. After two consecutive years of economic contraction (1984 and 1985), the economy has since 1986 had positive growth. growth, although in 1990 the economy slowed considerably from 1989. The agricultural sector, sector together with forestry and fishing, plays an important role in the economy, employing about 50% 45% of the work force and providing almost 30% of GDP. The Philippines is the world's largest exporter of coconuts and coconut products. Manufacturing contributed contributes about 25% of GDP. Major industries include food processing, chemicals, and textiles.

The economy continues to recover from the political turmoil following Following the ouster of former President Marcos and several coup attempts. After two consecutive years recession of economic contraction (1984 and 1985), 1984-85, the Philippine economy has since 1986 had positive growth, although in 1990 grew on the economy
average of 5.0% per year during 1986-89. It slowed considerably from 1989. again during the period
1990-91. The agricultural sector together with forestry and fishing, plays
an important role in the economy, employing about 45% of the work force and
providing almost 30% of GDP. The Philippines is the world's largest exporter
of coconuts and coconut products. Manufacturing contributes about 25% 35% of
GDP. Major industries include food processing, chemicals, and textiles.

Domestic output in this primarily agricultural economy remained the same in failed to grow
in 1992 as and rose only slightly in 1991. 1993. Drought and power supply
problems hampered production,
while inadequate revenues prevented
government pump priming. Despite a flat
GDP performance, GNP mustered a small 0.6% expansion, attributable to
inflows of workers' Worker remittances combined with smaller foreign interest helped to supplement GDP.
payments. A marked increase in capital goods imports, particularly power
generations generating equipment, telecommunications equipment, and electronic data
data processors, contributed to a 20.5% 20% import growth in 1992. Exports rose 11%,
led by earnings from the Philippines' two leading manufactures - electronics
both 1992 and garments.
1993.

Domestic output in this primarily agricultural economy
failed to grow
in 1992 and rose only slightly in 1993. Drought and
power supply
problems hampered production, while inadequate revenues prevented
prevented government pump priming. Worker remittances helped to
supplement GDP.
A marked increase in capital goods imports,
particularly power
generating equipment, telecommunications equipment,
and electronic
data processors, contributed to 20% annual import
growth in both 1992 1992-94. Provided the government can cope with the
substantial trade deficit and meet the fiscal targets agreed to with
1993. the IMF, the Philippines should duplicate the strong growth
performance of 1994 in 1995-96.

The Philippine economy, primarily a mixture of
agriculture and light industry, continued its third fourth year of recovery
in 1995, 1996, led by growth in exports and investments. Officials have
targeted 5%-6% 7.1%-7.8% growth for 1996 1997 after achieving 4.8% an estimated 5.5%
growth in 1995.
1996. The government is continuing its economic reforms to
enable the
Philippines to move closer to the development of the newly
industrialized countries of East Asia. The strategy includes
improving infrastructure and plans to overhaul
infrastructure, overhauling the tax system to
bolster government revenues.
revenues, and moving toward further deregulation and privatization of
the economy.

The In 1997 the Philippine economy, primarily a mixture of
of agriculture and light industry, continued its fourth fifth year of recovery
in 1996, positive economic growth, led by growth in expansion of exports and investments. Officials have investment.
targeted 7.1%-7.8% The government expects growth for 1997 after achieving an estimated 5.5% to slow to about 3% in 1998 due to
growth spillover effects of the financial crisis in 1996. East Asia. The government is continuing
has promised to continue its economic reforms to
enable help the Philippines to move closer to
match the development pace of development in the newly
industrialized countries of
East Asia. The strategy includes improving
infrastructure, overhauling
the tax system to bolster government
revenues, and moving toward
further deregulation and privatization of
the economy.

In 1997 1998 the Philippine economy, primarily a economy?a mixture
of agriculture and
agriculture, light industry, continued its fifth year of and supporting services--deteriorated as
positive economic growth, led by expansion a result of exports spillover from the Asian financial crisis and investment. poor
The government expects growth to slow weather conditions. Growth fell to about 3% -0.5% in 1998 due to from 5% in
spillover effects of the financial crisis 1997, but is expected to recover to more than 2% in East Asia. 1999. The government
government has promised to continue its economic reforms to help the Philippines
Philippines match the pace of development in the newly
industrialized countries of
East Asia. The strategy includes
improving infrastructure, overhauling
the tax system to bolster
government revenues, and moving toward
further deregulation and
privatization of the economy.

In 1998 the Philippine economy?a economy - a mixture of
agriculture, light industry, and supporting services--deteriorated services - deteriorated as
a result of spillover from the Asian financial crisis and poor
weather conditions. Growth fell to about -0.5% in 1998 from 5% in
1997, but is expected to recover recovered to more than 2% 2.9% in 1999. The
government has promised to continue its economic reforms to help the
Philippines match the pace of development in the newly
industrialized countries of East Asia. The strategy includes
improving infrastructure, overhauling the tax system to bolster
government revenues, and moving toward further deregulation and
privatization of the economy.

In 1998 the Philippine economy - a mixture of agriculture, light industry, and supporting services - deteriorated as a result of spillover from the Asian financial crisis and poor weather conditions. Growth fell to about -0.5% in 1998 from 5% in 1997, but recovered to 2.9% about 3% in 1999. 1999 and 3.6% in 2000. The government has promised to continue its economic reforms to help the Philippines match the pace of development in the newly industrialized countries of East Asia. The strategy includes improving infrastructure, overhauling the tax system to bolster government revenues, and moving toward further deregulation and privatization of the economy. economy, and increasing trade integration with the region.

In 1998 the Philippine economy - a mixture of agriculture, light industry, and supporting services - deteriorated as a result of spillover from the Asian financial crisis and poor weather conditions. Growth fell to about -0.5% 0.6% in 1998 from 5% in 1997, but recovered to about 3% in 1999 and 3.6% 4% in 2000. The government has promised to continue its economic reforms to help the Philippines match the pace of development in the newly industrialized countries of East Asia. The strategy includes improving infrastructure, overhauling the tax system to bolster government revenues, moving toward further furthering deregulation and privatization of the economy, and increasing trade integration with the region. Prospects for 2002 depend heavily on the economic performance of two major trading partners, the US and Japan.

In 1998 1998, the Philippine economy - a mixture of agriculture, light industry, and supporting services - deteriorated as a result of spillover from the Asian financial crisis and poor weather conditions. Growth fell to 0.6% in 1998 from 5% in 1997, but recovered to about 3% 3.3% in 1999 1999, 4.5% in 2000, and 4% 4.5% in 2000. The government has promised to continue its economic reforms to help 2001. In 2002, the Philippines match the pace recorded GDP growth of development in 4.4% but also incurred a record budget deficit. As a result, the newly industrialized countries Philippines is burdened with a public sector debt equal to more than 100% of East Asia. The strategy includes improving infrastructure, overhauling the tax system GDP. Growth eased to bolster 3.8% in 2003. The government revenues, furthering deregulation and privatization of has promised economic reforms including going forward with privatization, reforming the economy, tax system, and increasing promoting additional trade integration with the within its region. Prospects for 2002 depend heavily on the economic performance of two major trading partners, Considerable drive is required to update the US educational system and Japan. the road network.

The Philippines was less severely affected by the Asian financial crisis of 1998 than its neighbors, aided in part by annual remittances of $6-7 $7-8 billion from overseas workers. workers and no sustained runup in asset prices or foreign borrowing prior to the crisis. From a 0.6% decline in 1998, GDP expanded by 2.4% in 1999, and 4.4% in 2000, but slowed to 3.2% in 2001 in the context of a global economic slowdown, an export slump, and political and security concerns. GDP growth accelerated to 4.4% 4.3% in 2002 and 4.2% 2002, 4.7% in 2003, and about 6% in 2004, reflecting the continued resilience of the service sector, gains in industrial output, and improved exports. exports and agricultural output. Nonetheless, it will take a higher, sustained growth path to make appreciable progress in poverty alleviation given the Philippines' high annual population growth rate and unequal distribution of income. The MACAPAGAL-ARROYO Administration has promised Philippines also faces higher oil prices, higher interest rates on its dollar borrowings, and higher inflation. Fiscal constraints limit Manila's ability to continue economic reforms finance infrastructure and social spending. The Philippines' consistently large budget deficit has produced a high debt level and has forced Manila to help the Philippines match the pace of development in the newly industrialized countries spend a large portion of East Asia. The strategy includes improving the infrastructure, strengthening tax collection to bolster national government revenues, furthering deregulation and privatization of budget on debt service. Large, unprofitable public enterprises, especially in the economy, enhancing energy sector, contribute to the viability government's debt because of the financial system, and increasing trade integration with the region. Prospects for 2004 will depend slow progress on privatization. Credit rating agencies are increasingly concerned about the economic performance of two major trading partners, Philippines' ability to sustain the US and Japan, and debt; legislative progress on increased confidence new revenue measures will weigh heavily on the part of the international investment community. credit rating decisions.

The Philippines was less severely affected by the Asian financial crisis of 1998 than its neighbors, aided in part by its high level of annual remittances of $7-8 billion from overseas workers workers, and no sustained runup in asset prices or foreign borrowing prior to the crisis. From a 0.6% decline in 1998, GDP expanded by 2.4% in 1999, and 4.4% in 2000, but slowed to 3.2% in 2001 in the context of a global economic slowdown, an export slump, and political and security concerns. GDP growth accelerated to 4.3% in 2002, 4.7% in 2003, and about 6% in 2004, 5% between 2002 and 2005 reflecting the continued resilience of the service sector, and improved exports and agricultural output. Nonetheless, it will take a higher, sustained growth path to make appreciable progress in poverty the alleviation of poverty given the Philippines' high annual population growth rate and unequal distribution of income. The Philippines also faces higher oil prices, higher interest rates on its dollar borrowings, and higher inflation. Fiscal constraints limit Manila's ability to finance infrastructure and social spending. The Philippines' consistently large budget deficit has produced a high debt level level, and this situation has forced Manila to spend a large portion of the national government budget on debt service. Large, Large unprofitable public enterprises, especially in the energy sector, contribute to the government's debt because of slow progress on privatization. Credit rating agencies are increasingly concerned have at times expressed concern about the Philippines' ability to sustain service the debt; legislative progress on new revenue measures will weigh heavily on debt, though central bank reserves appear adequate and large remittance inflows appear stable. The implementation of the expanded Value Added Tax (VAT) in November 2005 boosted confidence in the government's fiscal capacity and helped to strengthen the peso, which gained 5.7 percent year-on-year, making it East Asia's best performing currency in 2005. Investors and credit rating decisions. institutions will continue to look for effective implementation of the new VAT and continued improvement in the government's overall fiscal capacity in the coming year.

The Philippines was less severely affected by the Asian financial crisis of 1998 than its neighbors, aided in part by its high level of annual remittances from overseas workers, and no sustained runup in asset prices or foreign borrowing prices, and more moderate debt, prior to the crisis. From a 0.6% decline in 1998, GDP expanded by 2.4% in 1999, and 4.4% in 2000, but slowed to 3.2% in 2001 in the context of a global economic slowdown, an export slump, and political and security concerns. Average GDP growth accelerated to about 5% between 2002 and 2005 2006 reflecting the continued resilience of the service sector, and improved exports and agricultural output. Nonetheless, it will take a higher, sustained growth path to make appreciable progress in the alleviation of poverty given the Philippines' high annual population growth rate and unequal distribution of income. The Philippines also faces higher oil prices, higher interest rates on its dollar borrowings, and higher inflation. Fiscal constraints limit Manila's ability to finance infrastructure and social spending. The Philippines' consistently large budget deficit has produced a high debt level, and this situation has forced Manila to spend a large portion of the national government budget on debt service. Large unprofitable public enterprises, especially in the energy sector, contribute to the government's debt because of slow progress on privatization. Credit rating agencies have at times expressed concern about the Philippines' ability to service the debt, though central bank reserves appear adequate and large remittance inflows appear stable. The implementation of the expanded Value Added Tax (VAT) in November 2005 boosted confidence in the government's fiscal capacity and helped to strengthen the peso, which gained 5.7 percent year-on-year, making it East Asia's best performing currency in 2005. 2005-06. Investors and credit rating institutions will continue to look for effective implementation of the new VAT and continued improvement in the government's overall fiscal capacity in the coming year.

The Philippine economy grew at its fastest pace in three decades with real GDP growth exceeding 7% in 2007. Higher government spending contributed to the growth, but a resilient service sector and large remittances from the millions of Filipinos who work abroad have played an increasingly important role. Economic growth has averaged 5% since President MACAPAGAL-ARROYO took office in 2001. Nevertheless, the Philippines will need still higher, sustained growth to make progress in alleviating poverty, given its high population growth and unequal distribution of income. MACAPAGAL-ARROYO averted a fiscal crisis by pushing for new revenue measures and, until recently, tightening expenditures. Declining fiscal deficits, tapering debt and debt service ratios, as well as recent efforts to increase and increased spending on infrastructure and social services have heightened bolstered optimism over Philippine economic prospects. Although the general macroeconomic outlook has improved significantly, significantly in recent years, the economy still faces several long term challenges. The Philippines continues to face important challenges and must maintain the reform momentum in order to catch up with regional competitors, improve employment opportunities, and alleviate poverty. Longer-term fiscal stability The Philippines will require more sustainable revenue sources, rather than non-recurring revenues need still higher, sustained growth to make progress in alleviating poverty, given its high population growth and unequal distribution of income. The Philippine economy grew at its fastest pace in three decades in 2007 with real GDP growth exceeding 7%, but growth slowed to 3.8% in 2008 as a result of the world financial crisis. High government spending, a relatively small trade sector, a resilient service sector, and large remittances from privatization. the four- to five-million Filipinos who work abroad have helped cushion the economy from the current financial crisis.

Philippine GDP grew nearly 7% 7.3% in 2010. 2010, spurred by consumer demand, a rebound in exports and investments, and election-related spending. The economy weathered the 2008-09 global recession better than its regional peers due to minimal exposure to securities issued by troubled global financial institutions; international securities, lower dependence on exports; exports, relatively resilient domestic consumption, supported by large remittances from four-to four- to five-million overseas Filipino workers; workers, and a growing business process outsourcing industry. Economic growth in the Philippines has averaged 4.5% per year since 2001, when former President during the MACAPAGAL-ARROYO took office. administration. Despite this growth, poverty worsened during the term of MACAPAGAL-ARROYO, worsened, because of a high population growth rate and inequitable distribution of income. MACAPAGAL-ARROYO averted a fiscal crisis by pushing for new revenue measures and, until recently, tightening expenditures to address the government's yawning budget deficit and The AQUINO administration is working to reduce high debt and debt service ratios. But the government abandoned its 2008 balanced-budget goal in order deficit from 3.9% of GDP, when it took office, to help the economy weather the global financial and economic storm. 2% of GDP by 2013. The economy under AQUINO faces budget shortfalls in the near term, but government has had little difficulty issuing debt both locally and internationally to finance the deficits. AQUINO's first budget emphasizes education education, health, conditional cash transfers for the poor, and other social spending programs, relying on the private sector to finance important infrastructure projects. Weak tax collection in recent years limits collection, exacerbated by new tax breaks and incentives, has limited the government's ability to address major challenges. The AQUINO administration has vowed to focus on improving tax collection efficiency - rather than imposing new taxes - as a part of its good governance platform.

Philippine GDP grew 7.3% 7.6% in 2010, spurred by consumer demand, a rebound in exports and investments, and election-related spending. spending, before cooling to 3.9% in 2011, and 4.8% in 2012. The economy weathered the 2008-09 global recession better than its regional peers due to minimal exposure to troubled international securities, lower dependence on exports, relatively resilient domestic consumption, large remittances from four- to five-million overseas Filipino workers, and a growing business process outsourcing industry. Economic growth in the Philippines averaged 4.5% during the MACAPAGAL-ARROYO administration. administration (January 2001 - June 2010). Despite this growth, however, poverty worsened, because of a high population growth rate and inequitable distribution of income. worsened during her presidency. The AQUINO administration is working to reduce the government deficit from 3.9% of GDP, when it took office, to 2% of GDP by in 2013. The government has had little difficulty issuing debt debt, both locally and internationally internationally, to finance the deficits. The AQUINO Administration reduced public debt to below 50% of GDP and obtained several ratings upgrades on sovereign debt so that the Philippines is now close to investment grade. However, the lack of government spending, especially on infrastructure, was one of several factors which slowed GDP growth in the second half of 2011, leading the government to announce a stimulus effort and increased public spending on infrastructure in 2012. AQUINO's first budget emphasizes emphasized education, health, conditional cash transfers for the poor, and other social spending programs, relying mostly on the private sector to finance important infrastructure projects. Weak tax collection, exacerbated by new tax breaks and incentives, has limited the government's ability to address major challenges. The AQUINO administration has vowed to focus on improving tax collection efficiency - efficiency, rather than imposing new taxes - taxes, as a part of its good governance platform. The economy still faces several long-term challenges, including reliance on energy imports and foreign demand for overseas Filipino workers.

Philippine GDP growth, which cooled from 7.6% in 2010 to 3.9% in 2011, expanded to 6.6% in 2012 - meeting the government's targeted 6%-7% growth range. The 2012 expansion partly reflected a rebound from depressed 2011 export and public sector spending levels. The economy has weathered global economic and financial downturns better than its regional peers due to minimal exposure to troubled international securities, lower dependence on exports, relatively resilient domestic consumption, large remittances from four- to five-million overseas Filipino workers, and a rapidly expanding business process outsourcing industry. The current account balance had recorded consecutive surpluses since 2003; international reserves are at record highs; the banking system is stable; and the stock market was Asia's second best-performer in 2012. Efforts to improve tax administration and expenditure management have helped ease the Philippines' tight fiscal situation and reduce high debt levels. The Philippines has received several credit rating upgrades on its sovereign debt in 2012, debt, and has had little difficulty tapping domestic and international markets to finance its deficits. Achieving a higher growth path nevertheless remains a pressing challenge. Economic growth in the Philippines averaged 4.5% during the MACAPAGAL-ARROYO administration administration, but poverty worsened during her term. Growth has accelerated under the AQUINO government, but with limited progress thus far in bringing down unemployment, which hovers around 7%, and improving the quality of jobs. Underemployment is nearly 20% and more than 40% of the employed are estimated to be working in the informal sector. The AQUINO administration has been working to boost the budgets for education, health, cash transfers to the poor, and other social spending programs, and is relying on the private sector to help fund major infrastructure projects under its Public-Private Partnership program. Long term challenges include reforming governance and the judicial system, building infrastructure, improving regulatory predictability, and the ease of doing business, attracting higher levels of local and foreign investments. The Philippine Constitution and the other laws continue to restrict foreign ownership in important activities/sectors (such as land ownership and public utilities).

The economy has weathered global economic and financial downturns shocks better than its regional peers due to minimal less exposure to troubled international securities, lower dependence on exports, relatively resilient domestic consumption, large remittances from four- to five-million overseas Filipino workers, and a rapidly expanding business process outsourcing industry. The current account balance had has recorded consecutive surpluses since 2003; 2003, international reserves are remain at record highs; comfortable levels, and the banking system is stable; and the stock market was Asia's second best-performer resumed an upward trajectory in 2012. 2014, climbing to new record highs during the first four months of 2015. Efforts to improve tax administration and expenditure management of expenditures have helped ease the Philippines' tight fiscal situation and reduce high debt levels. Nevertheless, government taxation and spending remain weak. The Philippines has received several investment-grade credit rating upgrades ratings on its sovereign debt, debt under the AQUINO administration and has had little difficulty tapping domestic and international markets to finance financing its deficits. Economic growth in the Philippines averaged has accelerated, averaging 6.0% per year from 2011-2014, compared with 4.5% during under the MACAPAGAL-ARROYO administration, but poverty worsened during her term. Growth government; competitiveness has accelerated under the AQUINO government, but with limited progress thus far in bringing down unemployment, which hovers around 7%, improved; and improving foreign direct investment hit a historic high in 2014, although it continues to lag compared with the quality rest of jobs. Underemployment the region. Unemployment has remained high, hovering at around 7% of the population, and underemployment is nearly 20% and more than 20%. At least 40% of the employed are estimated to be working work in the informal sector. sector and poverty afflicts about a quarter of the population. The AQUINO administration has been working to boost the budgets expenditures for education, health, cash transfers to the poor, and other social spending programs, programs. Infrastructure remains underfunded and the government is relying on the private sector to help fund with major infrastructure projects under its Public-Private Partnership program. Long Other long term challenges include reforming governance and governance, the judicial system, building infrastructure, improving and the regulatory predictability, environment, and improving the ease of doing business, attracting higher levels of local and foreign investments. business. The Philippine Constitution and the other laws continue to restrict foreign ownership in important activities/sectors (such - such as land ownership and public utilities). utilities. Some progress has been made in establishing a Customs Modernization Act to meet international standards and commitments.

The economy has weathered been relatively resilient to global economic shocks better than its regional peers due to less exposure to troubled international securities, lower dependence on exports, relatively resilient domestic consumption, large remittances from four- to five-million about 10 million overseas Filipino workers, workers and migrants, and a rapidly expanding outsourcing industry. The current account balance has recorded consecutive surpluses since 2003, international reserves remain at comfortable levels, and the banking system is stable; the stock market resumed an upward trajectory in 2014, climbing to new record highs during the first four months of 2015. stable.
Efforts to improve tax administration and management of expenditures management have helped ease the Philippines' tight fiscal situation and reduce debt levels. Nevertheless, government taxation burden and spending remain weak. tight fiscal situation. The Philippines has received investment-grade credit ratings on its sovereign debt under the AQUINO administration and has had little difficulty financing its budget deficits. However, weak absorptive capacity and implementation bottlenecks have prevented the government from maximizing its expenditure plans, which the administration has been working to address. Although it has improved, the low tax-to-GDP ratio remains a constraint to supporting increasingly higher spending levels and sustaining strong growth over the longer term.
Economic growth has accelerated, averaging 6.0% per year from 2011-2014, 2011 to 2015, compared with 4.5% under the MACAPAGAL-ARROYO government; and competitiveness rankings have improved. The Philippines has improved; and not sustained steady growth in foreign direct investment hit a historic high in 2014, although it investment, which continues to lag compared with regional peers.
Although the rest of economy has grown at a faster pace under the region. Unemployment AQUINO government, challenges to achieving more inclusive growth remain. The unemployment rate has remained declined somewhat in recent years but remains high, hovering at around 7% of the population, and 6.5%; underemployment is nearly 20%. also high, ranging from 18% to 19% of the employed. At least 40% of the employed work in the informal sector and poverty sector. Poverty afflicts about a quarter of the population. More than 60% of the poor reside in rural areas, a challenge to raising rural farm and non-farm incomes. The AQUINO administration has been working to boost expenditures for education, health, transfers to the poor, and other social spending programs. Infrastructure remains underfunded and the government is relying on the private sector to help with major projects under its Public-Private Partnership program. Other long term challenges include reforming Continued efforts are needed to improve governance, the judicial system, and the regulatory environment, and improving the overall ease of doing business. The
Notable achievements over the past year include passage of laws that liberalized the entry of foreign banks into the country; partially relaxed the cabotage law by allowing foreign vessels to ply import and export cargo within the archipelago; and passage of anti-trust legislation. Substantial progress has also been made towards passage of a Customs Tariff and Modernization Act to meet international standards and commitments, with strong prospects of enactment into law before President AQUINO steps down from office. However, the Philippine Constitution and other laws restrict foreign ownership in important activities/sectors - such as land ownership and public utilities. Some progress has been made in establishing a Customs Modernization Act to meet international standards and commitments.

The economy has been relatively resilient to global economic shocks due to less exposure to troubled international securities, lower dependence on exports, relatively resilient domestic consumption, large remittances from about 10 million overseas Filipino workers and migrants, and a rapidly expanding outsourcing industry. The During 2016, the current account balance has recorded consecutive surpluses narrowed to its lowest level since 2003, international the 2008 global financial crisis, but nevertheless mustered a surplus for a 14th consecutive year. International reserves remain at comfortable levels, levels and the banking system is stable.
Efforts to improve tax administration and expenditures management have helped ease the Philippines' debt burden and tight fiscal situation. The Philippines has received investment-grade credit ratings on its sovereign debt under the former AQUINO administration and has had little difficulty financing its budget deficits. However, weak absorptive capacity and implementation bottlenecks have prevented the government from maximizing its expenditure plans, which the administration has been working to address. plans. Although it has improved, the low tax-to-GDP ratio remains a constraint to supporting increasingly higher spending levels and sustaining strong high and inclusive growth over the longer term.
Economic growth has accelerated, averaging 6.0% 6.1% per year from 2011 to 2015, 2016, compared with 4.5% under the MACAPAGAL-ARROYO government; and competitiveness rankings have improved. The Philippines has not sustained steady growth in Although 2016 saw a record year for net foreign direct investment, which continues investment inflows, FDI to the Philippines has continued to lag regional peers. peers, in part because the Philippine constitution and other laws restrict foreign ownership in important activities/sectors - such as land ownership and public utilities.
Although the economy has grown grew at a faster pace under the AQUINO government, challenges to achieving more inclusive growth remain. Wealth is concentrated in the hands of the rich. The unemployment rate has declined somewhat in recent years from 7.3% to 5.5% between 2010 and 2016 but remains high, hovering the jobs are low paying and tedious. Underemployment hovers at around 6.5%; underemployment is also high, ranging from 18% to 19% of the employed. At least 40% of the employed work in the informal sector. Poverty afflicts about more than a quarter fifth of the population. More than 60% of the poor reside in rural areas, where the incidence of poverty (about 30%) is more severe - a challenge to raising rural farm and non-farm incomes. The AQUINO administration has been working to boost expenditures for education, health, transfers to the poor, and other social spending programs. Infrastructure remains underfunded and the government is relying on the private sector to help with major projects under its Public-Private Partnership program. Continued efforts are needed to improve governance, the judicial system, the regulatory environment, the infrastructure, and the overall ease of doing business.
Notable achievements over 2016 saw the past year include passage election of laws President Rodrigo DUTERTE, who has pledged to make inclusive growth and poverty reduction his top priority. DUTERTE believes that liberalized the entry of foreign banks into illegal drug use, crime and corruption are key barriers to economic development among the country; partially relaxed lower income class. This administration wants to reduce the cabotage law by allowing foreign vessels poverty rate to ply import 14% and export cargo within graduate the archipelago; economy to upper-middle income status by the end of President DUTERTE’s term in 2022. Key themes under the government’s Ten-Point Socioeconomic Agenda include continuity of macroeconomic policy, tax reform, higher investments in infrastructure and passage human capital development, and improving competitiveness and the overall ease of anti-trust legislation. Substantial progress doing business. The administration has also been made towards vowed to address spending bottlenecks and is pushing for congressional passage of a Customs Tariff and Modernization Act Comprehensive Tax Reform Program to meet international standards and commitments, with strong prospects of enactment into law before President AQUINO steps down from office. However, the Philippine Constitution help finance more aggressive infrastructure and other laws restrict foreign ownership social spending, starting in important activities/sectors - such as land ownership and public utilities. 2018. The government also supports relaxing restrictions on foreign ownership, except for land.

The economy has been relatively resilient to global economic shocks due to less exposure to troubled international securities, lower dependence on exports, relatively resilient domestic consumption, large remittances from about 10 million overseas Filipino workers and migrants, and a rapidly expanding outsourcing services industry. During 2016, 2017, the current account balance narrowed to its lowest level fell into the negative range, the first time since the 2008 global financial crisis, but nevertheless mustered a surplus for a 14th consecutive in part due to an ambitious new infrastructure spending program announced this year. International However, international reserves remain at comfortable levels and the banking system is stable.
Efforts to improve tax administration and expenditures management have helped ease the Philippines' debt burden and tight fiscal situation. The Philippines received investment-grade credit ratings on its sovereign debt under the former AQUINO administration and has had little difficulty financing its budget deficits. However, weak absorptive capacity and implementation bottlenecks have prevented the government from maximizing its expenditure plans. Although it has improved, the low tax-to-GDP ratio remains a constraint to supporting increasingly higher spending levels and sustaining high and inclusive growth over the longer term.
Economic growth has accelerated, averaging 6.1% over 6% per year from 2011 to 2016, 2017, compared with 4.5% under the MACAPAGAL-ARROYO government; and competitiveness rankings have improved. Although 2016 2017 saw a new record year for net foreign direct investment inflows, FDI to the Philippines has continued to lag regional peers, in part because the Philippine constitution and other laws limit foreign investment and restrict foreign ownership in important activities/sectors - such as land ownership and public utilities.
Although the economy grew at a faster rapid pace under the AQUINO government, challenges to achieving more inclusive growth remain. Wealth is concentrated in the hands of the rich. The unemployment rate declined from 7.3% to 5.5% 5.7% between 2010 and 2016 but the jobs are low paying and tedious. Underemployment hovers 2017; while there has been some improvement, underemployment remains high at around 18% 17% to 19% 18% of the employed. employed population. At least 40% of the employed work in the informal sector. Poverty afflicts more than a fifth of the population. total population but is as high as 75% in some areas of the southern Philippines. More than 60% of the poor reside in rural areas, where the incidence of poverty (about 30%) is more severe - a challenge to raising rural farm and non-farm incomes. Continued efforts are needed to improve governance, the judicial system, the regulatory environment, the infrastructure, and the overall ease of doing business.
2016 saw the election of President Rodrigo DUTERTE, who has pledged to make inclusive growth and poverty reduction his top priority. DUTERTE believes that illegal drug use, crime and corruption are key barriers to economic development among the lower income class. This development. The administration wants to reduce the poverty rate to 14% 17% and graduate the economy to upper-middle income status by the end of President DUTERTE’s term in 2022. Key themes under the government’s Ten-Point Socioeconomic Agenda include continuity of macroeconomic policy, tax reform, higher investments in infrastructure and human capital development, and improving competitiveness and the overall ease of doing business. The administration has vowed sees infrastructure shortcomings as a key barrier to address spending bottlenecks sustained economic growth and has pledged to spend $165 billion on infrastructure by 2022. Although the final outcome has yet to be seen, the current administration is pushing shepherding legislation for congressional passage of a Comprehensive Tax Reform Program comprehensive tax reform program to help finance more aggressive raise revenues for its ambitious infrastructure spending plan and social spending, starting to promote a more equitable and efficient tax system. However, the need to finance rehabilitation and reconstruction efforts in 2018. The government also supports relaxing restrictions the southern region of Mindanao following the 2017 Marawi City siege may compete with other spending on foreign ownership, except for land. infrastructure.

The economy has been relatively resilient to global economic shocks due to less exposure to troubled international securities, lower dependence on exports, relatively resilient domestic consumption, large remittances from about 10 million overseas Filipino workers and migrants, and a rapidly expanding services industry. During 2017, the current account balance fell into the negative range, the first time since the 2008 global financial crisis, in part due to an ambitious new infrastructure spending program announced this year. However, international reserves remain at comfortable levels and the banking system is stable.
Efforts to improve tax administration and expenditures management have helped ease the Philippines' debt burden and tight fiscal situation. The Philippines received investment-grade credit ratings on its sovereign debt under the former AQUINO administration and has had little difficulty financing its budget deficits. However, weak absorptive capacity and implementation bottlenecks have prevented the government from maximizing its expenditure plans. Although it has improved, the low tax-to-GDP ratio remains a constraint to supporting increasingly higher spending levels and sustaining high and inclusive growth over the longer term.
Economic growth has accelerated, averaging over 6% per year from 2011 to 2017, compared with 4.5% under the MACAPAGAL-ARROYO government; and competitiveness rankings have improved. Although 2017 saw a new record year for net foreign direct investment inflows, FDI to the Philippines has continued to lag regional peers, in part because the Philippine constitution and other laws limit foreign investment and restrict foreign ownership in important activities/sectors - such as land ownership and public utilities.
Although the economy grew at a rapid pace under the AQUINO government, challenges to achieving more inclusive growth remain. Wealth is concentrated in the hands of the rich. The unemployment rate declined from 7.3% to 5.7% between 2010 and 2017; while there has been some improvement, underemployment remains high at around 17% to 18% of the employed population. At least 40% of the employed work in the informal sector. Poverty afflicts more than a fifth of the total population but is as high as 75% in some areas of the southern Philippines. More than 60% of the poor reside in rural areas, where the incidence of poverty (about 30%) is more severe - a challenge to raising rural farm and non-farm incomes. Continued efforts are needed to improve governance, the judicial system, the regulatory environment, the infrastructure, and the overall ease of doing business.
2016 saw the election of President Rodrigo DUTERTE, who has pledged to make inclusive growth and poverty reduction his top priority. DUTERTE believes that illegal drug use, crime and corruption are key barriers to economic development. The administration wants to reduce the poverty rate to 17% and graduate the economy to upper-middle income status by the end of President DUTERTE’s term in 2022. Key themes under the government’s Ten-Point Socioeconomic Agenda include continuity of macroeconomic policy, tax reform, higher investments in infrastructure and human capital development, and improving competitiveness and the overall ease of doing business. The administration sees infrastructure shortcomings as a key barrier to sustained economic growth and has pledged to spend $165 billion on infrastructure by 2022. Although the final outcome has yet to be seen, the current administration is shepherding legislation for a comprehensive tax reform program to raise revenues for its ambitious infrastructure spending plan and to promote a more equitable and efficient tax system. However, the need to finance rehabilitation and reconstruction efforts in the southern region of Mindanao following the 2017 Marawi City siege may compete with other spending on infrastructure.