Charting Philippines Economy

Transcription

1 Charting Philippines Economy Designed to help executives catch up with the economy and incorporate macro impacts into company s planning. Annual subscription includes 2 semiannual issues published in June and December.

2 TABLE OF CONTENT Economic Profile 1 Economic Structure 2 Competitiveness 3 Economic development Part of the country s economic profile, economic structure section gives readers useful views to understand what matters for the Philippine economy. What is the size of the Philippine economy in relation to world s major economies? What is the size of Philippine population? What is the demographic structure of Philippines? Is it favorable for economic growth? How has the structure of Philippine GDP changed over the years? How much does the Philippine economy rely on external trade? What are the key regions for the Philippine economy? Part of the country s economic profile, this section explores Philippines s competitiveness in the global level. It also covers the country s attractiveness to foreign direct investment. Which stage of economic development is the Philippines s economy in? How is the average wage in Philippines compared to others in the region? How has the labor productivity in Philippines changed over the years and in relation with comparable countries? How competitive is Philippines? How are Philippines s competitive factors compared to those of other countries? Is it easy to do business in Philippines? What are most problematic factors in doing business in Philippines? How good is Philippines in attracting Foreign Direct Investment? Part of the country s economic profile, this section explores Philippines s average income and its distribution, poverty as well as other development indicators. What is the level of income for an average person in Philippines? Is there still a lot of poor people in Philippines? How does it compare to others? Is unemployment the issue for Philippines? How is income distributed in Philippines and how does it compare to others? What is the current level of human development in Philippines? How has quality of life in Philippines changed over the years?

3 TABLE OF CONTENT Economic Outlook 4 Economic Growth 5 Macro Risks Appendices Part of the country s economic outlook, this section explores Philippines recent economic growth, its key drivers and well as the growth outlook for the coming years. What has been the growth rate of Philippine economy over the past 10 years and how does it compare with others? What were the key growth drivers for the Philippine economy in the past year? What were the source of growth for Philippine economy in the last 5 quarters? What is the growth outlook for Philippine economy over the next 3 years and how does it compare with others? How has the growth outlook for Philippines changed over the past few months? This section explores Philippines macroeconomic risks, including inflation, financial sector, budget deficit as well as balance of payment and exchange rate. What is the risk of inflation in Philippines and how does it compare with others? How healthy is the Philippine banking sector? What has been the return of the stock markets and how does it compare with others? What is the fiscal risk in Philippines? What is the balance of payment risk for Philippines? How good is the country in getting foreign exchange by the mean of commerce? Does Philippines have enough international reserves to service its debt and for import? What is the FX risk? How has the PHP performed compared to other currencies? Appendix 1: Key projections from latest IMF s world economic outlook report. GDP growth Inflation Population Unemployment rate Government budget and debt Current account Appendix 2: World Bank s Doing Business Report Detailed rankings and scores for Philippines and comparable economies. Starting a business Dealing with construction permits Getting electricity Registering property Getting credit Protecting Minority Investors Paying taxes Trading across borders Enforcing contracts Resolving Insolvency

4 The Philippines is the fifth largest economy in ASEAN, about the same size as Singapore s 2015 GDP USD billion, Market Exchange Rate US China Japan Germany UK ASEAN* France India Italy Brazil* Canada Korea* Russia Australia Spain 4,123 3,358 2,849 2,436 2,422 2,091 1,816 1,773 1,552 1,377 1,325 1,224 1,200 10,983 17,947 Indonesia* Thailand* Malaysia* Singapore* Philippines Vietnam Myanmar Cambodia* Laos* Brunei* Measuring the size of an economy Size of any economy is usually measured by calculating its Gross Domestic Product (GDP) which is the market value of all officially recognized final goods and services produced within a country in a given period of time. To compare GDP internationally, there is a need to convert value in local currencies to one main currency, normally USD. There are two popular exchange rate to be used. The first one is the official exchange rate for that particular period. The second one is the so called Purchasing Power Parity exchange rate, which takes into account the difference in living expenses between countries. The first method is more popular in comparing the size of each economy. Size of Philippines economy The Philippines is the fifth largest economy in ASEAN, about the same size as Singapore s. Its 2015 GDP is estimated to be around USD 292 billion, using market exchange rate. Mexico 1,144 Note: (*) IMF Estimate Source: IMF World Economic Outlook Database April 2016 Charting Economy This is a licensed product and is not to be photocopied 6

5 Wages in the Philippines is comparable to India, lower than Thailand but higher than Indonesia and Vietnam Average monthly wages in Asia and the Pacific 2013 or latest available year (US$) Australia (2013) Singapore (2013) New Zealand (2013) Japan (2013) South Korea (2013) Hong Kong (2013) Malaysia (2013) 651 1,780 2,841 3,419 3,320 3,694 4,642 International Wage Comparison Due to differences in definitions and coverage, comparing average wages across countries is not always straightforward. The chart presents information on wage levels for countries with broadly comparable data, compiled by International Labor Organization from comprehensive National Labor Force Surveys. China (2013) Samoa (2012) Mongolia (2012) Thailand (2013) India (2011/12) Wages in the Philippines Average monthly wages in the Philippines in 2013 was around USD 215, same as in India. It is lower than in Thailand but higher than in Indonesia and Vietnam. Philippines (2013) 215 Vietnam (2013) 197 Indonesia (2013) 183 Cambodia (2012) 121 Pakistan (2013) 119 Nepal (2008) 73 Source: ILO Global Wage Report 2014/15 Asia and the Pacific Supplement Charting Economy This is a licensed product and is not to be photocopied 15

6 Philippines economic growth continued to accelerate in 1Q16, growing 6.9% year on year Real GDP growth Year-on-year, 1Q16 India 7.9% Philippines Real GDP growth Year on year, last 8 quarters Philippines China Vietnam 6.9% 6.7% 5.5% 6.8% 6.7% 6.5% 6.9% GDP growth in the latest quarter Real GDP growth in the latest quarter from major economies in the world sorted from highest to lowest. Indonesia Malaysia Thailand South Korea US Singapore 4.9% 4.2% 3.2% 2.7% 2.0% 1.8% 5.7% 5.0% 5.9% 6.2% GDP growth for Philippines economy in 1Q16 Philippines economic growth continued to accelerate in 1Q16, growing 6.9%. Its growth is highest among major ASEAN economies and second only to India when compared to other emerging ones. Euro area 1.5% Hong Kong 0.8% Japan 0.0% Taiwan -0.7% Russia Brazil -5.4% -1.2% 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 Source: The Economist, Philippines NSCB; Charting Economy analysis Charting Economy This is a licensed product and is not to be photocopied 33

7 Starting a business in Philippines is relatively difficult with relatively high cost and around a month to complete Starting a business rank Economy Rank DTF* Procedures (number) Time (days) Cost (% of income per capita) Paid in min. capital (% of income per capita) New Zealand Hong Kong SAR, China Singapore Australia Malaysia Korea, Rep Brunei Darussalam Japan Thailand Timor Leste Vietnam China Lao PDR India Myanmar Philippines Indonesia Cambodia Central African Republic Starting a Business This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited liability company to start up and formally operate. To make the data comparable across 189 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. The most recent round of data collection for the project was completed in June Starting a Business in Philippines Starting a business in Philippines is relatively difficult with relatively high cost and around a month to complete. Note: (*) An economy s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier Source: Doing Business 2016: Measuring Regulatory Quality and Efficiency Charting Economy This is a licensed product and is not to be photocopied 51

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