The Philippines is one of the most dynamic economies in the East Asia region, with sound economic fundamentals and a globally recognized competitive workforce. Growth in the Philippines has been averaged above 5% in the past decade, significantly higher than in the previous decades.
Following high growth of above 6% in the past three years, growth slowed down to 5.3% in the first half of 2015. Growth was limited by the slow pace of public spending and the contraction in net exports on the demand side, as well as stagnant agriculture on the supply side. Nevertheless, the Philippines was one of only two major economies in East Asia Region, along with Vietnam, to accelerate its quarterly growth from Q1 to Q2. Due to the slow start, economic growth is expected to settle at 5.8% in 2015, before rebounding to 6.4% in 2016.
The country has earned investment grade ratings from major credit rating agencies as a result of its sound macroeconomic fundamentals. It is increasingly characterized by robust inclusive economic growth, low and stable inflation, healthy current account surplus, more-than-adequate international reserves, and a sustainable fiscal position – a combination never before seen in its history. However, with GDP growth having reached its potential, the country should make use of its sound fiscal position to fund much needed infrastructure to sustain high growth in the following decades.
With a solid macro economy that has proven to be resilient to some major shocks, the country can now focus its attention on implementing crucial structural reforms that can sustain inclusive growth, create more and better jobs, and eradicate extreme poverty.
The government is pursuing the following measures under its (2011-2016) updated Philippine Development Plan, which adopts a framework of sustained inclusive growth. The overall theme of good governance and anti-corruption guides each intervention, aiming to:
- Attain high and sustained economic growth that provides productive employment opportunities;
- Promote equal access to development opportunities through better education, primary health care and other basic social services; equal access to infrastructure, credit, land, technology, and other productive inputs;
- Reduce the cost of doing business, consistent with upholding good governance and strong institutions to encourage competition; and
- Establish effective and responsive social safety nets to assist those who are less capable of participating in economic activities
Last Updated: Oct 19, 2015