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Philippines

 Flag of Philippines

Last reviewed: 12 October 2009

Country information

Economy

Basic economic facts (2008)

GDP: $ 168.6 billion
GDP Per Capita: $1,871
GNP per capita: $ 2,069
GDP per capita (adjusted for PPP):  $3,546.2
Annual growth: GDP 4.6%, GNP 6.1%
Average rate of inflation: 9.3%
Major industries: Electronic components, Services (including call centres and business process outsourcing), Garments
Major trading partners: United States, Japan, European Union, China, Singapore, Taiwan, Hong Kong
Major investors: United States, Japan, Hong Kong, Singapore, European Union (particularly UK, Germany and Netherlands)
Exchange Rate: £1 = approx. PhP 79.8 (Aug 2009 – rates vary)

After growing at a 31-year high of 7.3% in 2007, the Philippine economy slowed in 2008 due to high oil and food prices in the first semester and the global financial crisis in the second semester. In 2008, annual GDP growth was 4.6%. For 2009, the government projected a 4.2% growth in GDP while independent forecasts predicted a more cautious 2.0 to 2.5% growth in 2009. Actual growth for the first semester is 1 percent.

The Philippines was relatively untouched by the initial financial crisis but has felt the impact of the resulting economic downturn. Exports fell 37% in the first quarter of 2009, primarily due to falling demand for electrical components, which make up 60% of exports.  However trade is a relatively small component of overall GDP because of low value-added in electronics trade.

As a consumption-driven economy, the main concern in 2009 is a slowdown in remittances from Filipinos working overseas. Almost a quarter of the country’s labour force works abroad and remittances (about 11% of GDP) prop up the balance of payments and support consumption and investment growth, particularly in the booming real estate sector.  Following several years of double digit growth for remittances, best-case scenario at the beginning of  2009 was zero-growth. However, first half data surprised at 2.9%. Main sources of remittances are US, Saudi Arabia, Canada, UK, Italy and UAE.

In light of the global financial crisis, the Philippine government has expressed initial commitments to stimulate the economy with an additional 1% of GDP deficit spending in 2008-2010. Monetary policy is expansionary, through a reduction in reserve requirement, and is expected to loosen further in 2009 as inflationary pressures ease. An initial benchmark rate cut was made on 29 January. By end of August, monetary authorities declared that the worst is over, and began to consider monetary expansion anew.

Beyond the immediate crisis, the challenge for the government is to encourage foreign and domestic investment, which have remained stubbornly low, and translate growth into poverty reduction. Despite a sustained period of strong growth since 2004, poverty has actually increased in the Philippines. Unfortunately, the initial success of VAT and corporate tax reforms has not translated into a sustained growth in government revenues.

Potential growth drivers


Infrastructure development
Power sector privatisation
Mining
Booming sectors e.g. BPO/IT outsourcing, tourism, finance

Potential growth challenges

Tax revenue leakage
Slow infrastructure development
Opposition to mining investments
Slow privatisation
High birth rate
Political instability
World fuel and food prices

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Contacts

Philippines

Address:

Embassy of the Republic of the Philippines
8 Suffolk Street
London SW1Y 4HH

Consular
6 Suffolk Street
London SW1Y 4HH

Commercial
1A Cumberland House
Kensington Court
London W8

Defence and Armed Forces
8 Suffolk Street
London SW1Y 4HH

Culture and Tourism
146 Cromwell Road
London SW7 4EF

Labour
8 Suffolk Street
London SW1Y 4HH

Telephone:

(020) 7937 1600
(020) 7361 4641
(020) 7361 4627 (Administration)
(020) 7361 4642 (Legalisation)
(020) 7361 4637 (Passports)
(020) 7361 4642 (Visas)
(020) 7361 4625 (Economic)
(020) 7361 4629 (Political)
(020) 7361 4633 (Defence and Armed Forces)
(020) 7937 1898/7988 Commercial Counsellor
(020) 7835 1100/7361 4626 (Culture and Tourism)
(020) 7361 4643 (Labour)
(020) 7361 4628 (IMO)

Fax:

(020) 7937 2925
(020) 7835 1926 (Culture and Tourism)
(020) 7937 2747 (Commercial)
(020) 7938 4250 (Labour)
(020) 7937 0091 (Defence)


Email: embassy@philemb.co.uk 
Email: infotourism@wowphilippines.co.uk (Culture and Tourism)
Email: visaofficer@philemb.co.uk (Consular)
Email: dtilondon1@aol.com (Commercial)
Email: defence@philemb.co.uk (Defence)
Email: jrasuljr_uk@yahoo.com (Labour)


Website: http://www.philemb.org.uk 

Office hours:

Mon–Fri: 0900-1700