The Philippine’s Socio -economic Performance, Outlook, Challenges, and Vision National Economic and Development Authority ILO Trade on Employment Workshop 6-7 October 2016
Socio-economic Performance
The Philippines’ growth trajectory has been improving, with 17 years of uninterrupted expansion GDP growth rates (in %, at constant prices) 10 6.2 4.5 2010-2015 8 2000-2009 2.8 6 2.0 1990-1999 1980-1989 4 2 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 -2 -4 -6 -8 -10 3 Source: Philippine Statistics Authority (PSA)
Investment & industry are increasingly becoming major drivers of GDP growth 6.9% Demand Side 6.9% Supply Side 6.2% Ave. growth Average growth (%) Average growth (%) 6.2% 4.5% 4.5% 2.8% 2.8% 1990-1999 2000-2009 2010-2015 S12016 Consumption Government 1990-1999 2000-2009 2010-2015 S12016 Investment Net Exports Agriculture Industry Services Statistical discrepancy Source: PSA
Growth accelerated in first half of 2016 First First Second Quarter Quarter Semester PARTICULARS 2016 2015 2016 2016 7.4 5.4 6.8 7.1 GROSS NATIONAL INCOME Net Primary Income 9.9 2.5 6.2 8.0 GROSS DOMESTIC PRODUCT 6.8 5.9 7.0 6.9 By Industrial Origin Agri, Fishery and Forestry (4.4) (0.1) (2.1) (3.3) Industry 9.0 6.1 6.9 7.9 8.0 4.7 6.3 7.2 o.w. Manufacturing 7.6 6.7 8.4 8.0 Services By Expenditure Household Final Consumption 7.0 6.4 7.3 7.2 Expenditure Gov’t Final Consumption Expenditure 11.8 2.4 13.5 12.7 26.6 21.4 27.6 27.1 Capital Formation 28.2 12.7 27.2 27.7 o.w. Fixed Capital Formation 7.3 5.1 6.6 7.0 Exports 19.0 12.6 20.9 19.9 Imports Source: PSA
Inflation has been tame, while financial sector is stable … Headline and Core Inflation, 2005- 2016* Real Interest Rate and Non-performing Loans, 2005- 2016 20 9 18 8 Core Inflation 16 15.8 Headline Inflation 7 14 6 NPL Ratio* 12 5 Real interest rates** 10 CAR 4 8 3 6 1.7 2 4 3.7 1.5 1 2 1.7 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 • as of Aug ’16 ** as of Jul’16 * Average of Jan - Aug 2016 Source: PSA and Bangko Sentral ng Pilipinas (BSP)
The country’s external position remains robust Positive Current Acct. & Declining External Debt 80 60 40 26.2 20 0.5 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1H 2016 External Debt to GDP ratio - LHS Current Account to GDP Ratio - RHS Healthy International Reserves 100 12 85.8 80 11 60 40 10 20 10.0 0 9 2010 2011 2012 2013 2014 2015 end-Aug 2016 Gross International Reserves (US$ bn) - LHS Months of import cover - RHS Source: BSP
Supported by major drivers… IT-BPO Revenues is Set to Overtake Remittances 28.9 25.8 25.0 24.6 23.0 22.0 21.4 20.1 18.8 18.9 17.3 16.4 16.1 14.4 13.2 12.8 11.0 8.9 7.1 6.1 4.5 3.4 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 F 2017 F Cash Remittances (US$ bn) IT-BPO Revenues (US$ bn) Buoyant International Tourism Receipts 5.4 5.0 4.8 4.8 4.7 4.4 4.3 3.9 3.8 3.5 3.0 3.0 2.7 2.5 2010 2011 2012 2013 2014 2015 Jan-Jun 2016 Receipts Arrivals Source: Department of Tourism, IT and Business Process Association of the Philippines
Our stronger fiscal position has been recognized as evidenced by our investment-grade sovereign credit rating • Modest fiscal deficit; Declining Public debt & interest payments; Increasing reliance on domestic financing Fiscal side: • Result: resilient fiscal sector Fiscal Position Share of expenditures allocated to interest payments 35 20 13.6 29.7 15.5 11.8 30 15 25 20 10 13.9 12.6 15 10 5 5 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 S1 Fiscal Position Revenue Effort Tax Effort 2016 Int. Payments to Disbursement Primary Exp to GDP (rhs) National gov’t outstanding debt (% of GDP) National Government Borrowing Program (%) 74.4 6.1 16.4 16.0 27.9 28.9 35.4 34.4 34.8 42.4 41.2 93.9 83.6 84.0 72.1 71.1 64.6 65.6 65.2 57.6 2009 2010 2011 2012 2013 2014 2015 as of Jul 2016 2016 Proposed Domestic Foreign *Using the program 2016 GDP
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 1000 6.0 5.4 5.2 900 5.0 800 4.3 700 4.0 600 2.7 500 860.6 3.0 2.7 756.4 400 2.0 2.0 575.7 300 346.3 200 306.9 215.7 1.0 100 0 0.0 2012 2013 2014 2015 2016 2017 Actual Obligations GAA NEP Source: Department of Budget and Management-BESF 2017
…complemented by private investments in public infrastructure Status of PPP Projects (as of 20 September 2016) Amount Projects by Status No. of Projects (PHP bn) Projects Under Implementation 13 292.32 Contract Awarded 11 185.59 Other projects under Implementation 2 106.73 PPP Pipeline 40 5,642.54 For Contract Signing 2 24.79 Projects under Procurement 12 338.28 For Approval of Relevant Government Bodies 5 241.26 For Evaluation of Concerned Agencies 2 5,034.00 Projects with Ongoing Studies 3 4.21 Projects Under Conceptualization/Development 16 NA Total 53 5,934.86 Source: PPP Center
Increased fiscal resources have also allowed greater public investments in social services… Spending on Social Services Per Capita, Constant Prices 4,000 8,000 3,519 6,761 3,500 7,000 5,777 3,000 2,843 6,000 2,500 5,000 3,842 2,000 4,000 1,764 1,484 1,426 2,679 2,644 1,372 1,500 3,000 1,247 888 1,000 2,000 762 685 482 417 359 500 1,000 160 173 148 126 77 56 38 0 0 2000-2004 2005-2009 2010-2015 2016 GAA 2017 Proposed Education Health Social Security (incl. CCT) Housing Total Social Services (rhs) Source: DBM, PSA-NSCB
Our vibrant economy is producing more and better jobs... Unemployment and Underemployment rates (%) Employment Generated 2000- 2015 (‘000) 5000 65 23.0 8.5 4493 Wage and salary worker (% in total employment) 8.0 61.9 4500 7.8 8.0 22.0 3782 7.3 7.4 7.5 7.4 4000 22.6 Employment Generated ('000) 7.5 3448 60 7.0 7.0 7.1 Underemployment Rate 21.0 Unemployment Rate 3500 57.2 21.0 7.0 6.6 20.0 3000 6.3 20.1 6.5 20.0 2500 55 19.0 19.3 19.319.118.8 5.7 19.3 6.0 51.9 2000 18.0 18.418.5 50.3 5.5 1500 17.9 17.0 50 5.0 1000 16.0 4.5 500 15.0 4.0 0 45 2000-2004/a 2005-2009 2010-2015/c,d Apr-July 2016/e Employment Generated ('000) Wage and salary worker (% in total employment) Wage and salary worker (% in total employment) Underemployment Rate (%) Unemployment Rate (%) Notes: a/ Starting 2006, population projection benchmark is based on the 2000 Population Census, hence 2006 employment generation can not be computed due to break in the series b/ Starting January 2012 Labor Force Survey (LFS), the codes for industry adopted the 2009 PSIC. Prior to this, codes for industry used the 1994 PSIC. c/ Annualized data for 2014 refer to the average estimates for April, July and October survey rounds that exclude Leyte. d/ Annualized data for 2015 refer to the average estimates of all 4 quarter rounds of LFS 2015 results, excluding Leyte. Employment generation refers to the average of estimates for April, July and October survey rounds. e/Not comparable with previous rounds of LFS; break in the data series due to change sin the Master Sample Design. Starting April 2016, the LFS used the 2013 MS Design, the 2010 Census of Population and Housing(CPH)-based population projections and the 2012 Philippine Standard Occupation Classification (PSOC). Source: PSA
Services and industry sectors remain to be the main contributor in employment generation... 60 41 56.0 54.7 53.4 53.5 52.6 41 Total Philippine Employment (in millions) 50 40 Share in Total Employment (%) 40 40 39 32.2 31.1 30.5 29.2 30 39 25.9 38 18.1 20 16.2 16.0 15.6 38 15.3 37 10 37 0 36 2012 2013 2014a/ 2015b/ Apr-Jul 2016c/ AGRICULTURE INDUSTRY SERVICES TOTAL EMPLOYMENT Notes: a/ Annualized data for 2014 refer to the average estimates for April, July and October survey rounds that exclude Leyte. b/ Annualized data for 2015 refer to the average estimates of all 4 quarter rounds of LFS 2015 results, excluding Leyte. Employment generation refers to the average of estimates for April, July and October survey rounds. c/Not comparable with previous rounds of LFS; break in the data series due to change sin the Master Sample Design. Starting April 2016, the LFS used the 2013 MS Design, the 2010 Census of Population and Housing(CPH)-based population projections and the 2012 Philippine Standard Occupation Classification (PSOC). d/ Starting January 2012 Labor Force Survey (LFS), the codes for industry adopted the 2009 PSIC. Prior to this, codes for industry used the 1994 PSIC. Source: PSA
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