What's With the Philippine Economy?

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Over the past few years, the Philippines has emerged as one of the most vibrant economies in the world, shedding its old image as “the sick man of Asia.” Manila closed out last year as Asia’s second-fastest rising economy, after China, with a 6.1% growth rate.

Yet the first quarter statistics for 2015 are a bit worrying. According to the Philippine Statistics Authority, growth in the Philippine economy slowed in the first quarter of 2015 to 5.2%, its weakest level in three years and way below the 6.6% mark many had predicted.

The slowdown has been attributed to several factors. Exports dropped dramatically – growing just 1% on year compared with 12.8% in the fourth-quarter – amid declining external demand across some of Manila’s main trading partners such as Japan and China. Government spending was also quite low at 4.8%, nearly half what it was in the fourth quarter of last year.

The key question, though, is whether this is just a blip or the start of a slower growth trend for the rest of the year. Philippine officials are convinced that it is the former. The country’s economic planning chief, Arsenio Balisacan, says government spending and exports can be expected to pick up in the coming quarters. Philippine Finance Secretary Cesar Purisima also told CNBC that despite the focus on government spending, private sector figures were still quite encouraging in the first quarter. Investment also expanded significantly by around 10.1% on year, while household consumption also rose relative to the previous quarter.

More generally, the fundamentals of the Philippine economy are quite strong. For instance, in a report released last month, the World Bank noted that strong remittances, falling oil prices, and upbeat consumer and business sentiments indicated strong growth for 2015. It suggested that a 6.5% growth was not out of reach.

But the report also warned of general risks to near-term growth, some of which played into the country’s sluggish first quarter in 2015. These include delays in the planned execution of the 2015 budget, delays in investment (in particular those under private-public partnership projects) and a tepid global economy. The lower 5.2% growth rate, and the underlying trends, make the government’s 7-8% growth forecast for 2015 – and even the World Bank’s lower 6.5% figure – look quite optimistic for now.

What’s With the Philippine Economy? | The Diplomat

 

[Aepsilons]

Its way too early to make predictions, the first quarter just ended. For one the Philippine Banks are resisting monetary easing when neighbors are doing just that.

META-ANALYTICALLY --- One has to consider the various variables such as: rising commodity prices and unemployment, corruption in the government and the country’s security situation following a bungled counterterrorism operation that claimed the lives of 44 paramilitary police. These influence and affect Overall foreign portfolio investment.

The Philippine Economy is resilient and maintaining growth rate within the 6-7% range is possible, and am confident in Manila's abilities to rise above the fray and prove negative forecasters wrong.

 

[大汉奸柳传志]

PH economy is highly depended on the global banana price

 

[Bussard Ramjet]

Its way too early to make predictions, the first quarter just ended. For one the Philippine Banks are resisting monetary easing when neighbors are doing just that.

META-ANALYTICALLY --- One has to consider the various variables such as: rising commodity prices and unemployment, corruption in the government and the country’s security situation following a bungled counterterrorism operation that claimed the lives of 44 paramilitary police. These influence and affect Overall foreign portfolio investment.

The Philippine Economy is resilient and maintaining growth rate within the 6-7% range is possible, and am confident in Manila's abilities to rise above the fray and prove negative forecasters wrong.

6% Growth, from such low base, with one of the fastest growing populations in Asia, is not exceptional in any sense.

 

[Aepsilons]

6% Growth, from such low base, with one of the fastest growing populations in Asia, is not exceptional in any sense.

It is actually quite exceptional considering the fact that many other countries in the region and in the same development status have a growth rate that is substantially lower than that of the Philippines' or at the same level. The reason for the Philippines' lower growth this quarter is in part due to fluxes prices of commodities and the Philippines' policy towards inflation. This is not a perpetual trend, and will eventually level out. What the writer of the OP's posted article fails to comprehend (or just maliciously omitted) is the fact that the Philippines' industrial output is increasing.

Its best to refrain from judgment on a nation's performance until the end of the fiscal year. I'm sure that by end of the 2nd quarter, the Philippines' growth rate will be back to the 6-7% range.


Id love to hear from the Filipino members in here: @Dakila @Pinoy @Filipino @Bob Ong @Zero_wing @Cossack25A1 @Fsjal et al.

 

[Cossack25A1]

While the economy will still continue to grow around 5-7%, the election season here in the Philippines is about to begin, thus it could affect it, specially in 2016, when there will be a new president.

 

[Aepsilons]

While the economy will still continue to grow around 5-7%, the election season here in the Philippines is about to begin, thus it could affect it, specially in 2016, when there will be a new president.

Hi buddy , that's a great point and something that I didn't consider -- the effects of politics. Definitely we should remember , as you noted in your post, the effects of election year on national politics as well as national economic performance throughout the sectors.

In defense of the Philippines, however, the fact that this article was written in an attempt to repudiate the Philippines is a compliment to the Philippine economic reality. Why do i say this? Because for the past some 8-10 years the Philippines growth rate (in GDP terms) has been within the 5-7%range, that when the country performs say 5% , its considered 'bad'. Talk about expectation ! Well then, I hope those detract commentators are prepared to be caught with their proverbial pants down-- because the Philippines is actually expected to maintain 6-7% growth rate well into 2020. She already outperforms Thailand, Malaysia, Vietnam and is at par with Bangladesh and China in terms of growth rate.

One of the highest in Asia.

 

[Cossack25A1]

Hi buddy , that's a great point and something that I didn't consider -- the effects of politics. Definitely we should remember , as you noted in your post, the effects of election year on national politics as well as national economic performance throughout the sectors.

In defense of the Philippines, however, the fact that this article was written in an attempt to repudiate the Philippines is a compliment to the Philippine economic reality. Why do i say this? Because for the past some 8-10 years the Philippines growth rate (in GDP terms) has been within the 5-7%range, that when the country performs say 5% , its considered 'bad'. Talk about expectation ! Well then, I hope those dectratist commentators are prepared to be caught with their proverbial pants off -- because the Philippines is actually expected to maintain 6-7% growth rate well into 2020. She already outperforms Thailand, Malaysia, Vietnam and is at par with Bangladesh and China in terms of growth rate.

One of the highest in Asia.

On one side, Binay already stated his foreign policy, which is similar to the Arroyo-administration - diplomatic solution with China. While this would lead to more Mainland investments going here, we cannot guarantee that we would still have an EEZ west of the Philippines. As for other candidates, I dunno if it is appopriate to elect someone who has been in politics for only three years, and was likely voted by people due to their "last name/ surname", and as for Roxas, I am not sure about him; when he took helm of the transportation department of the Philippines, nothing improved and actually, everything deteriorated.

While our economic growth is maintained to 6-7%, we haven't fully tapped it due to restrictions. While it wouldn't immediately solve the poverty and infrastructure problems, the removal or lessening of the restrictions could help develop the Philippines but sadly, politicians resort to fear-mongering.

 

[Zero_wing]

Man the chinese imperials here are again trying to deface the Philippines laughable.

 

[Aepsilons]

While our economic growth is maintained to 6-7%, we haven't fully tapped it due to restrictions. While it wouldn't immediately solve the poverty and infrastructure problems, the removal or lessening of the restrictions could help develop the Philippines but sadly, politicians resort to fear-mongering.

This is true ! Growth rate , currently, in Manila is at 5-7% and this is still possible despite restrictive clauses that maintains a 40-60 ratio in regards to foreign investments , foreign presence. Imagine when the Philippines adopts a more liberal economic policy ? There's no reason why the Philippines can't hit growth level in at least 9-10%, heck even double digit growth !

 

[Cossack25A1]

This is true ! Growth rate , currently, in Manila is at 5-7% and this is still possible despite restrictive clauses that maintains a 40-60 ratio in regards to foreign investments , foreign presence. Imagine when the Philippines adopts a more liberal economic policy ? There's no reason why the Philippines can't hit growth level in at least 9-10%, heck even double digit growth !

This would have been possible if the Filipino population is better educated and would not cave in to "trapos" (and even leftist groups) fear-mongering that removing the restriction is "foreign colonization", since this is the main hindrance of removing the restrictions; the Tsinoy oligarchy influence is second.

Like what Singapore's Lee Kuan Yew said, and I quote:

"Some Filipinos write and speak with passion. If they could get their elite to share their sentiments and act, what could they not have achieved?"

If you would see the Philippine society, the upper class people has their own world, the lower class people also has their own world, and the middle class people is slowly disappearing.

PH economy is highly depended on the global banana price

Maybe you wantings some banana?

 

[Aepsilons]

LOL!!!!

You know you want banana....

 

[Aepsilons]

"Some Filipinos write and speak with passion. If they could get their elite to share their sentiments and act, what could they not have achieved?"

Poignant quote, my friend. I wish more and more Filipinos would be as passionate about their revered nation as you.

Reminds me of some of the works of your national hero, the late Dr. Jose P. Rizal. Who said, "It is a useless life that is not consecrated to a great ideal. It is like a stone wasted on the field without becoming a part of any edifice."

Fight on the fight, my friend. For in the end, the passion of the Filipino can light a whirlwind, if we refer and regard the People's Power to dethrone Marcos serves as basis for the potential of your great country.



Maganda talaga ang espiritong Pilipino. Ganda na ganda ang posibilidad sayo.

 

[Beidou2020]

PH economy is highly depended on the global banana price

There is another price the Pinoys are depended on

 

[Genesis]

On one side, Binay already stated his foreign policy, which is similar to the Arroyo-administration - diplomatic solution with China. While this would lead to more Mainland investments going here, we cannot guarantee that we would still have an EEZ west of the Philippines.

If you are completely honest, you don't have one now. We have already gotten defacto control over it. With the completion of the new islands, it's all but over, if not in name.

The question you have to ask, is it better to fight for something that's already lost against an opponent you cannot hope to win, or to do the smart thing and work together, then maybe get something in the future.

That's what we did with Taiwan and Diaoyu and South China Sea, we worked with the US, tabled all our grievances, and hit back only when we could. Now we are back with a vengeance, this would not have been possible had we remained in the the Soviet camp or stayed the way we are, or be proud of being poor and backward instead of facing reality.

As for other candidates, I dunno if it is appopriate to elect someone who has been in politics for only three years, and was likely voted by people due to their "last name/ surname", and as for Roxas, I am not sure about him; when he took helm of the transportation department of the Philippines, nothing improved and actually, everything deteriorated.

As to the other candidates, realistically, if their main goal is to fight China, what can they possibly do that would have any effect or isn't being done now. If they were to do this, how would this improve the Philippine's position in Asia.