Economic trends
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. After recovering in 2010, growth slowed down in 2011, due to the downturn in exports which followed the economic slowdown of the country's trading partners, the decrease in public investments and the typhoons which affected the agribultural and fishing sectors. In spite of unfavorable international context, grwoth should remain steady at around 5% in 2012, thanks to domestic consumption, employment and vigorous FDI flows.
The main challenge for the Philippine government is to maintain economic stability and strengthen the foundations for more inclusive growth. While increasing spending on infrastructure sectors, education and healthcare, the government must also rebalance the public finances. The tax losses result from a narrow tax base, the losses incurred by public enterprises, and functional problems of the tax administration. In the context of global economic slowdown, the central bank will loosen monetary policy. An acceleration of public-private partnerships is also planned.
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 branches of industry
The agricultural sector employs about 40% of the labor force but contributes to less than 15% 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 50% of the GDP, has developed substantially especially in the fields of telecommunications, calling centers, and finance.
International trade
During these two last decades, the Philippines' economy, which was relatively closed, has evidently opened up, partly due to its ASEAN (Association of South-East Asian Nations) membership. Trade represents almost 70% of the country's GDP (average 2008-2010). 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. Under the effects of the global crisis of 2009, its trade balance deficit was reduced, however it deepened again in 2011 and this tendency should continue.
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Last updates: May 2012
