Economic studies


Population 102,152 million
GDP per capita 2862 US$
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Major macro economic indicatorS

  2014 2015  2016 (e) 2017 (f)
GDP growth (%) 6.2 5.9 6.8 6.8
Inflation (yearly average) (%) 4.2 1.4 2.0 3.4
Budget balance (% GDP) 0.9 0.2 -0.4 -1.5
Current account balance (% GDP) 3.8 2.9 1.8 1.4
Public debt (% GDP) 36.4 36.3 34.8 33.8

(f): Forecast


  • Electronics is a key driver of Philippines’ exports (50% of exports)
  • Important role of Overseas Filipinos (OF) remittances.
  • The business process outsourcing (BPO) sector is thriving.


  • Low rates of investment. Inadequate and outdated infrastructures.
  • Governance shortcomings remain and high level of corruption
  • Inequalities and strong demographic growth.


Growth should remain strong despite adverse weather conditions

In 2017, the economy is expected to remain vigorous with household consumption, which should continue to be the main driver (70% of GDP). Consumption is expected to continue benefiting from substantial expatriate remittances and rapid credit growth. Purchasing power should not be penalized by inflation, which stays at moderate level, though increasing, and is in line with Central bank target rate (2-4%). Investment is still on the right path, following the new government's plans to dedicate 5% of its federal budget allocation to infrastructure development through public/private partnerships (allocations to Ministry of Transport have increased more than three-fold since 2011). Transport, communication and storage will be dynamic sectors. In 2016, the agricultural sector had suffered from high temperatures caused by El Niño, which caused a loss of 4.5% of overall production only between January and May 2016. However, in 2017, weather should improve with El Niña.


The financial situation of the country remains safe and sound

The budget balance is likely to deteriorate in 2017, following increased spending for the reconstruction and development of infrastructures. However, public debt should continue to shrink. Furthermore, although government has encountered difficulties of budget execution and public expenditures were lower than projected in 2016, the latter is likely to bounce considering the federal budget for 2017 that is supposed to hinge on public investment.
Regarding external accounts, current account should keep on a positive track in 2017. Nevertheless, the trade balance should worsen due to the rapid rise in imports stimulated both by household consumption and the input needs for industry, particularly in the telecommunications sector, which is driven by business process outsourcing sector. In the same time, poor results in electronics sector imply that exports are meant to decrease due to the large share of this sector in country’s exports. Remittances are robust in 2016 and this trend is likely to continue. Foreign investors remain cautious as evidenced by the position of Philippines peso to US dollar. In this context, foreign currency reserves of the central bank remain high. Reform of the banking sector has enabled a considerable reduction in the ratio of non-performing loans


The new president of the Philippines, committed to keeping his campaign promises is an unusual political figure

Rodrigo Duterte, former mayor of Davao, was elected to the presidency on 9 May 2016 to succeed Benigno Aquino. He won a surprising victory against his opponent, Manuel Roxas, the outgoing president's favourite. The new president has initiated reconciliation with the Chinese authorities at the risk of distancing the country from its traditional ally, the United States, in order to ease tensions regarding conflict in the South China Sea. Cooperation with neighbouring countries in combatting terrorism and piracy is being intensified, and there is a move to develop an alliance with Indonesia and Malaysia.
Following the bomb blast at Davao in September 2016, which was claimed by the radical Abu Sayyaf group, Rodrigo Duterte declared the state of lawlessness. To this statement, one may also add the president’s fallacious discourses that could lead to a distrust of foreign markets.
Eventually, a peace process has begun with the Moro National Liberation Front (MNLF) and the Moro Islamist Liberation Front (MILF), which is aimed at bringing an end to the conflict in the southern Philippines.


Last update : January 2017

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