Republic of the Philippines The Philippine Economy: Recent - - PowerPoint PPT Presentation

Republic of the Philippines

The Philippine Economy: Recent Performance and Priority Reforms for Sustained Growth

22 February 2019 Secretary Ernesto M. Pernia National Economic and Development Authority

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PH Economic Growth in Sharp Upward Trajectory

2

%

2.0%

1980-1989

2.8%

1990-1999

4.5%

2000-2009

6.3%

2010-2018

Source: Philippine Statistics Authority (PSA)

6.2%

FY 2018

6.7%

FY 2017

Gross Domestic Product (GDP)

Growth Rates at Constant 2000 Prices (%)

• 8
• 6
• 4
• 2

2 4 6 8 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 2016 2017

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Thailand 4.1% Indonesia 5.2% Vietnam 7.1% Malaysia 4.7%

Philippines 6.2%

China 6.6% India 7.7 %

(Q1-Q3)

PH Among the Fastest Growing Major Economies in Asia

ECONOMIC PERFORMANCE (Growth Rate in % ) FY 2018 GROSS DOMESTIC PRODUCT 6.2 By Industrial Origin Agriculture, Fishery and Forestry 0.8 Industry 6.8 Manufacturing 4.9 Services 6.6 By Expenditure Household Final Consumption 5.6 Gov’t Final Consumption 12.8 Capital Formation 13.9 Fixed Capital Formation 14.0 Construction 15.1 Exports 11.5 Imports 14.5

Private Investment and Government Spending Co-pilot Economic Growth

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Rising Foreign Net Equity Investments in Manufacturing

(Amount in USD mn)

5

[CELLRANGE] 42.1% [CELLRANGE] [CELLRANGE] 35.5% [CELLRANGE] [CELLRANGE] 7.5% [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] 4.1% [CELLRANGE] [CELLRANGE] 5.9% [CELLRANGE]

• 500

500 1,000 1,500 2,000 2,500 3,000 3,500

2016 2017 Jan - Nov 2018

Others Financial and Insurance Activities Construction Real Estate Activities

Manufacturing

Electricity, Gas, Steam and Airconditioning Supply

51.5%

11.5% 15.5% 6.5%

4.9%

3,285.3 2,592.1 1,997.5

13.5%

Net Equity (in USD million)

Percent Share to Net Equity by Industry (%)

Source: Bangko Sentral ng Pilipinas (BSP) Note: Figures may not add up due to rounding

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Despite the uptrend this year, inflation is expected to normalize in the medium term

6

FY 2018 FY 2017

PHILIPPINES

Headline Inflation 5.2 2.9 Food 6.8 3.0 Non-Food 3.4 2.6 NATIONAL CAPITAL REGION Headline Inflation 5.5 3.7 Food 6.9 5.5 Non-Food 4.5 2.8 AREAS OUTSIDE NCR Headline Inflation 5.1 2.7 Food 6.9 2.5 Non-Food 3.2 2.5

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The Outlook: Bright Prospects

The Philippines is expected to remain one of the fastest-growing major economies in Asia

7

3.8 6.7 6.8 6.9 6.7 5.1 5.9 3.9 3.6 3.7 7.3 7.1 6.6 6.2 5.1 4.7 4.6 2.9 3.5 7.5 6.5 6.2 6.6 5.1 4.6 3.9 2.5

World Output India Vietnam China Philippines Indonesia Malaysia Thailand Singapore 2017 2018F 2019F Source: IMF-WEO October 2018, IMF-WEO Update, January 2019; Actual 2018 GDP for Philippines, China, and Vietnam

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Potential Risks to Growth

E X T E R N A L

Normalizing monetary policy

• f advanced

economies Inward looking policies leading to tariff increases and trade tensions Negative investor sentiment towards emerging markets Build up of financial sector risks and excessive credit growth

DOMESTIC

Natural hazards Restrictive employment protection legislation Security risks Delays in infra projects and logistics bottleneck

EXTERNAL

Easing of global growth Weak consumer sentiment Delayed passage of 2019 national budget Agricultural supply bottlenecks

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Sustaining/Accelerating Economic Growth

Filipinos are among the youngest in Asia

Source: United Nations *Demographic window is defined as the period when population under 15 years old drops below 30% and population over 65 years old is less than 15%

Japan Singapore South Korea Thailand Vietnam Indonesia Malaysia India Myanmar Cambodia Philippines 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070

2070

Demographic Windows in Asia

2015 2050 2055 2055 2025 2025 2035 2010 2010 2055 2045 2015 1990 2015 2020 1995 2005 1965 1995 1980 2015

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Sustaining/Accelerating Economic Growth

Fully implement Responsible Parenthood and Reproductive Health Law Further trim Foreign Investment Negative List Fully implement Ease of Doing Business Law Put in place the National ID system Rice Tariffication

10

Push for Key Policy Reforms

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Updated Public Investment Program 2017-2022*

[CATEGORY NAME] [VALUE] ([PERCENTAGE]) [CATEGORY NAME], [VALUE] ([PERCENTAGE]) [CATEGORY NAME] [VALUE] ([PERCENTAGE]) [CATEGORY NAME] [VALUE] ([PERCENTAGE]) [CATEGORY NAME] [VALUE] ([PERCENTAGE]) [CATEGORY NAME][VALUE] ([PERCENTAGE])

By Theme (PhP Billion)

9,581

Programs and Projects

PHP9.26 trillion

T

• tal Investment

Requirement

*Based on the submission of Agencies in the PIPOL System, validated by NEDA Secretariat as of December 14, 2018, and for confirmation by appropriate inter-agency bodies .

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Estimated Impact of Increased Public Infrastructure Spending

Employment, in hundred thousands

1 2 3 4 5 6 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2017 2018 2019 2020 2021 2022 Additional Employment, in hundred thousands Contribution to Economic Growth (%)

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Accelerating Infrastructure Development of the Updated Public Investment Program (PIP) 2017- 2022*

Number of Infrastructure Projects by Region (As of December 2018)

Nationwide 170 Interregional 68

Legend

Region I 491 Region III 418 NCR 743 Region IV-A 302 Region IV-B 371 Region VI 506 Nationwide 170 Interregional 68 Region X 282 Region II 221 CAR 255 Region V 359 Region VIII 384 Region VII 211 Region XIII 259 Region XI 322 Region XII 142 Region IX 244

ARMM 1,845

Republic of the Philippines

The Philippine Economy: Recent Performance and Priority Reforms for Sustained Growth

22 February 2019 Secretary Ernesto M. Pernia National Economic and Development Authority