Introduction

 The Philippine economy has been performing well. In 2015, its strong

economic growth was backed by robust domestic demand, which outweighed the negative

effects of a fall in exports. Low commodity prices and an increase in job opportunities

will continue to strengthen household demand. This along with a modest rebound in

exports will support economic growth;

 The Philippines is a fairly well-diversified economy with large manufacturing

and services sectors. The country is a global hub for business process outsourcing (BPO),

such as call centres, information technology support and accounting;

 However, there has not been much change in the country’s high poverty level,

which has contributed to emigration. A large proportion of its population continues to

work in the informal sector, due to scarce job opportunities and the country still suffers

from an inadequate infrastructure, due to underinvestment;

 In order to enhance the effectiveness of its monetary policy, from June 2016

onwards, the BSP made a shift to an interest rate corridor (IRC) system. Under this new

system, the BSP’s key policy rates have been set at between 2.5% and 3.5%. This will

help bring stability and enhance liquidity in the banking system;

 Foreign direct investment (FDI) inflows into the Philippines grew by 246% in

real terms over 2010-2015, thanks to the numerous pro-business reforms implemented by

the government, which included the easing of FDI norms. In 2014, the government

allowed the full entry of foreign banks into the country with the right to own up to a 100%

stake in local banks;

 The public-debt-to-GDP ratio in the Philippines continuously declined since

2010 and was sustainable in 2015. This was due to high growth in real GDP, manageable

inflation, prudent fiscal policies, and low interest payments.

 Despite the faster economic growth enjoyed during the past few years, the
poverty rate in the Philippines will still be high as the gap between the poor and the
rich widens, according to the Economist Intelligence Unit (EIU).
By 2019, “the Philippines will remain one of Southeast Asia’s poorest economies, with a
lower level of GDP (gross domestic product) per head than the majority of the region’s
other major economies,” the EIU said in a special report titled “An Outlook for Key
Emerging Asian Markets” released this month, which also tacked economic
developments in China, India and Indonesia.
Based on 2014 EIU data, the country remained a “small market” despite a
medium-sized population of about 100 million as the GDP per head or the value of the
economy divided by the population stood at only $2,843 at market exchange rates and
$6,914 at purchasing power parity (PPP) rates.
Read more: http://business.inquirer.net/195516/poverty-to-linger-despite-robust-
growth#ixzz57GahNkFb

Body/Discussion