THE PHILIPPINE ECONOMY:

Recent Performance and

Long-Term Outlook

Undersecretary Rolando G. Tungpalan

17 February 2016

Favorable Macroeconomic Trends

The Philippines has been on a higher growth trajectory since the
beginning of the current decade.
GDP in 2000 prices, trillion Php, 1960-2018
10
9

Real GDP growth

6.2% (2010-2015)

5.8% (2015)
6.1% (2014)
7.1% (2013)

Structural break of
potential real GDP
at around 2009

6
5
4
3
2

1
0
1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Source: PSA

Structural transformation takes place

Investment and industry are increasingly becoming major drivers of

GDP growth.
Demand Side

Supply Side
7.0

8.0
7.0

6.2%

Ave. growth

6.0

3.0

6.0

5.0

5.0

4.0

6.2%

4.5%

4.5%

4.0

2.8%

3.0

2.0

2.8%

2.0

1.0
0.0

1.0

-1.0

0.0

-2.0
1990-1999

Consumption
Investment

2000-2009

2010-2015

Government
Net exports

1990-1999

Agriculture

2000-2009

2010-2015

Industry

Services

Structural transformation takes place

The economy is now on a higher growth trajectory with increasing
contribution from the manufacturing sector
Manufacturing contribution to
Growth
1.6

1.4
1.2
1
0.8

Industry Development is Getting A Big Push

Industry Roadmaps: 35 total sectoral
roadmaps, 29 of which are completed (such as
manufacturing, chemicals, copper products,
rubber
products,
IT-BPM,
electronics,
aerospace, among others) while 6 are still
being finalized. These sectoral roadmaps are
the building blocks of the Manufacturing
Industry
Roadmap
(MIR)
and
the
Comprehensive National Industrial Strategy
(CNIS

0.6
0.4
0.2

0
2000-2009

2010-2015

Manufacturing Resurgence Program - will

rebuild the existing capacity of industries,
strengthen new ones, and maintain the
competitiveness of industries with comparative
advantage. The goals: close the gaps in the
supply chain, provide access to raw materials,
and expand domestic markets and exports.

Sound Government Finances

Growth-enhanced fiscal space has allowed major investments in
infrastructure with spending on infrastructure more than tripling..
Public infrastructure spending, Bn PhP and % of GDP
1200

6
5.0

5.4

5.2

1000

5
4.3

800

600

2.7

2.7

3
876.6

400

1018.7
2

766.5
595.8

200

346.2

306.9

0
2013

2014

2015

2016

Actual (2013-2014)/Program(2015)/Proposed(2016)/Projections(2017-2018)

2017

2018

Ratio to GDP (rhs)

Source: Department of Budget and Management

Gross Regional Domestic Product, 2012 to 2014

(at constant 2000 prices)

14.4%

14.3%

14.4%
35.7%

12.7%

10.5%
17.4 %

36.3%

36.4%
12.4%

12.5%

10.3%

10.4%

9.3%

2014

2013

2012

9.1%

17.3%

9.3 %

17.2%

City-driven economic growth

Urban areas account for
75-80% of GDP
Manila alone contribute
a third of total GDP
Incomes are 2.3 times
that in rural areas

Proliferation of
urban settlements
326 cities and urban
municipalities
Exposure to risks
associated with climate
change due to being
near or along the coast

Despite lower poverty incidence in

urban areas, urban poor remains
vulnerable

Impact of
Urbanization
to the
Economy

Low poverty incidence

Large segment is above
poverty line and vulnerable
to slipping back to poverty
Rising informal settlements

Pressure on Urban
Infrastructure
Widening demand-supply
gap in urban infrastructure
services
Housing problems
Traffic congestion

Projected Population for Selected Age Groups, Philippines: 2010-2045

2010

2015

2020

2025

Number
(in millions)

Number
(in millions)

Number
(in millions)

Number
(in millions)

93.14

101.56

109.95

117.96

0-4

10.77

11.33

11.48

11.36

0-14

31.34

32.28

33.31

33.91

15-64

57.77

64.41

70.57

76.38

60 and over

6.26

7.64

9.51

11.72

65 and over

4.02

4.87

6.06

7.67

Female 15-49

23.97

26.27

28.27

30.25

AGE/SEX

Total
Population

Source: PSA

Projected Population for Selected Age Groups, Philippines: 2010-2045

2030

2035

2040

2045

Number
(in millions)

Number
(in millions)

Number
(in millions)

Number
(in millions)

125.34

131.90

137.53

142.09

0-4

11.04

10.62

10.12

9.52

0-14

33.63

32.78

31.53

30.01

15-64

82.15

87.43

92.14

95.87

60 and over

14.25

16.83

19.65

22.60

65 and over

9.56

11.70

13.86

16.22

Female 15-49

32.14

33.78

34.93

35.34

AGE/SEX

Total
Population

To ensure inclusivity, the Philippine Development Plan is more responsive

to the needs of sectors so that they can be assured of access to development
opportunities.

Actual

Annual Plan Target

Indicators
2014

2015

2015

2016

Poverty Incidence

25.8a/

n.a.

20.0-23.0

18.0-20.0

Unemployment rate (in %)

6.6b/

6.3c/

6.6-6.8

6.5-6.7

Employment generated (in 000)

1,253b/

183c/

753-814

650-750

Underemployment rate (%)

18.4b/

18.5c/

18.0

17.0

GDP Growth Rate

6.1

5.8

7.0-8.0

7.0-8.0

Agriculture

1.6

0.2

2.0-3.0

2.5-3.5

Industry
Services

7.9
5.9

6.0
6.7

8.6-9.7
6.8-7.8

9.3-10.3
7.2-8.1

Notes:
a/ Poverty estimates for 2014 were generated from the 2014 APIS, which does not include sample households from Batanes and Leyte ; b/ FY 2014 LFS estimate
is the average of April, July and October rounds excluding Leyte data; c/ Jan to Oct 2015 estimates exclude Leyte; FY 2015 data averages the four rounds of the
LFS except for employment generation; Jan 2015 employment generated data cannot be computed due to break in data series;
Source: Philippine Statistics Authority

How do we keep the momentum in 2015 and beyond?

Close the infrastructure gap
Maintain high levels of public investments in human capital,
particularly in health and education
Invest in disaster resiliency
Promote more sustainable production and consumption
patterns
Strengthen institutions
Promote healthy competition

Foster innovation culture

Encourage entrepreneurship
11

Filipino 2040:
A Long-term Vision Exercise
Thematic Areas:
Infrastructure Development and Urbanization
Health Care
Science, Technology and Innovation
Education and Training
Environment, disaster risk management and climate
change
Energy
Demographic Dividend
Governance and Institutions
Financing Development

Process Flow of the PDP Midterm Update

Issuance of:
- Memorandum Circular
- Planning Guidelines

Meetings:
- Inter-agency
- Sub-committees
- Planning Committees
- Inter-Planning Committees

Regional
Consultations

Chapter Write-up

Presentation to NEDA
Board

Presidents endorsement

LEDAC

Published PDP Midterm

Updates

-EndThank you!