Philippines Economy

The Philippine economy had its best year in more than a decade in 2007, though the pace is slowing in 2008. Both investment and consumption were strong. Meanwhile, the government deficit was cut thanks to tighter control over expenditures, while revenue collection is being boosted by a crackdown on tax evaders. More than 25 million people live on less than US$1 per day, an increase of 16% since 2003.

The Philippines is the second largest labour-exporting country in the world after Mexico. On average, about 2,500 Filipinos leave the country every day. About 7.5 million Filipinos, or almost 9% of the total population, are classified as Overseas Filipino Workers scattered in 182 foreign countries. The main reason for the exodus is that one in three Filipinos lives below the poverty threshold. In urban areas, poverty afflicts about 20% of the population while in rural areas the incidence is almost 47%.

Unemployment Rate

Main Industries

Agriculture contributes 14.2% of the country’s GDP and employs slightly more than one third of its workforce. Agriculture is still dominated by huge agricultural estates that date back to colonial times. Growth in manufacturing, the biggest contributor to the domestic economy, is expected to slow as export markets weaken. Construction should benefit from increases in public investment and the continued demand for office space and housing.

The service sector, which accounts for over half of GDP, should see growth of around 7.5% in 2008. Outsourcing of business processing operations is flourishing but growth in both retailing and finance is slowing. Mining output should rise in 2008 thanks to additional investments in nickel and copper mining and strong prices in world markets.

Economic Health (2007)