Some facts about the economy of the Philippines

According to World Bank country director Motoo Konishi, the Philippines "is no longer the sick man of East Asia, but the rising tiger." True as it may seem, PH has registered one of the highest growth rates in Asia since the Aquino administration started.

However, could the issue of 'inclusive' growth several years ago still be the same issue of today? There must be some truth in it. Here are some facts which that economic gains do not trickle down the bottom classes.

1. In 2009, about 25 million Filipinos or 1/4 of the population lived on $1 dollar a day or less.

2. In 2011, the 40 richest families in the Forbes wealthy list accounted for 76 percent of the total gross domestic product (GDP) of the Philippines. That's very high compared to Thailand's 33.7 petcent, Malaysia's 5.6 percent, and Japan's 2.8 percent.

3. In 2012, the two wealthiest people in the Philippines were worth a combined $13.6 billion, which is approximately six percent of the Philippine economy.

4. Minimum wages have not been increased to a point that could significantly impact the lives on the lowest social strata, despite corporate gains obtained by owners of profitable Philippine companies and corporations. Hence, the owners get increases, yet the workers don't.

5. Politics is a game-changer, with regards to effectiveness of public policy that negatively impacts PH capitalists and business owners.

6. Some sectors of the Philippine economy are under monopoly or duopoly; thus, prices of commodities (may it be goods or services) can easily be controlled and eventually directly affect the customer base - a big portion of which is powered up by the middle class.

Philippines economic growth likely to surpass target 5-6%

In an Interaksyon report, the National Economic and Development Authority (NEDA) said Monday that the full-year economic growth of the Philippines will likely exceed the government's target of 5-6%.

In the first half of the year, economic growth averaged 6.1% bulked up by remittance-led consumer spending and the services sector including the business process outsourcing (BPO) industry.

The second half of the year will possibly reach at least 6% as more Filipino consumers will engage into extravagant shopping spree and other social gatherings, speeding up domestic spending, in the gift-giving and reunion months fed up especially by the release of Christmas bonuses and extra-month pays. 

Last month, credit ratings firm Standard & Poor's hiked its growth forecast for the Philippines while it cut or retained the outlook of the other Asian economies.

Biggest SM mall in Mindanao, SM Lanang Premier, opens

The biggest mall in Mindanao under Sy-led SM Prime Holdings, the country's largest mall developer, has been opened Friday (September 28) with 144,000 square meters retail space. Crowds of people trooped to the mall's opening day.

Photo Courtesy: SM Lanang Premier FB Page

SM Lanang Premier, the second SM mall in Davao City, is located at J.P. Laurel Avenue in Barangay (village) Lanang. The first one is SM City Davao, 9 kilometers away from SM Lanang Premier which opened in November 2001. 

Approximately 88 percent of the retail space now has contractual tenants. With its celebrated opening, SM Lanang Premier becomes the biggest and first premier mall development in the south.

Some of the stores which will be found in SM Lanang Premier are:

• SM Department Store
• SM Supermarket
• SMX Davao Convention Center
• Watsons
• Ace Hardware
• Forever 21
• Kultura
• Vikings
• Cha Time
• KFC
• Jollibee
• Mesa

SM Lanang Premier houses five cinemas, a 2,200-seater IMAX theater, a Science Discovery Center, a bowling center, and more than 1,500 parking spaces. The longest fountain in the country will be found in SM Lanang Premier.

Here are some of the gigs to look forward to in SM Lanang Premier's opening weekend! Images credits go to SM Lanang Premier and PWD World.

Japan manufacturers transfer to the Philippines

Japanese manufacturers transfer to the Philippines due to the country's young, English-speaking workforce following rising business risks that lower their confidence at home such as disasters and a rising yen.

Latest to invest are electronics firm Furukawa Electric Co. Ltd. and adhesive maker Cemedine Co. Ltd who injected $12.9 million or almost P500 million in initial capitalization alone.

Also building new facilities Power Rangers and Gundam toy maker Bandai (more than P350 million), camera and projector optical lens maker Fujifilm Corp. (approx. P1.1 billion), and electronics component maker Murata Manufacturing Co. Ltd. (no less than P300 million).

Companies expanding their presence in the Philippines include Canon Inc., and Brother Industries Ltd. with estimated initial investments of P3 billion and P2 million, respectively. 

Japan remains the biggest investor in the Philippines with total investments of P77.4 billion in 2011

Philippines economy more competitive

The Philippines did it again! 

The Philippines's economic competitiveness improved, as the country jumps 10 places  from no. 75 to 65 out of 144 countries in the World Economic Forum's 2012/2013 Global Competitiveness Report.

The Philippines is said to be one out of two countries to make a double-digit jump, a  twice-in-a-row 10-notch jump to be particular, in the last two years. This year, the country entered the upper 50 percent of the competitiveness rank. 

It can be recalled that the nation once entered the bottom 25 percent rank of economies - the least competitive ones.

Cooperation between the National Competitiveness Council and other government agencies led to improvements in 11 out of 12 pillars or factors that the report measures and compares.

These include government institutions, higher education and training, infrastructure, financial market development, technological readiness, macroeconomic environment,  goods market efficiency, labor market efficiency, market size, business sophistication, and innovation.

However, the country failed to gather pace in the areas of health and primary education where it lost 6 places to 98th.

15,000 businesses gave insights to this year's competitiveness survey, and out of these, 132 came from the Philippines. The country's great performance this year can be attributed to the increasing business confidence in the Philippines - a signal that the Philippines PNoy administration must be doing something right and efficient particularly in governance and implementation.

The announcement came after the Philippines registered a 6.1-percent increase in its Gross Domestic Product in the first half. The complete Global Competitiveness Report can be viewed below.

The Global Competitiveness Report 2012-2013

PH economy at its fastest pace in 24 years

MANILA, Philippines—The Philippine economy grew at its fastest pace last year since the 1986 Edsa People Power Revolution, expanding 7.3 percent due to strong domestic demand fueled by the billions of dollars overseas Filipino workers sent home.

Government data showed gross domestic product (GDP)—the total value of goods and services produced in the country—rose a seasonally adjusted 3.0 percent in the final quarter of 2010, more than double market expectations and a turnaround of a third-quarter contraction.

The National Statistical Coordination Board (NSCB) said the strong performance of the Philippine economy—coming off growth of just 0.9 percent in 2009—was achieved on the back of the world recovery from the global financial crisis.

“The global economic recovery which resulted in record growth rates of foreign trade … contributed to an economic performance in 2010 that well surpassed the government’s target of 5.0 percent to 6.0 percent,” the NSCB said.

Also boosting growth were higher remittances from the millions of Filipinos working abroad and the extra money that was pumped into the economy by politicians who campaigned in the national and local elections held in the middle of last year.

“Remittances have been pretty healthy and that has really helped to support private consumption in the Philippines,” said HSBC economist Sherman Chan. Remittances from overseas Filipino workers are expected to top $20 billion this year.

The NSCB said industry delivered its best seasonally adjusted quarterly growth in at least 15 years, rising 6.7 percent in October to December from the previous three months, with food manufacturers and mining leading the way.

“This shows the economy is not losing steam yet. That is in large part due to accommodative monetary policy, which has helped to sustain investments even though the government is pursuing fiscal consolidation,” Chan said.

Strong growth from industry and recovery by the farm sector more than offset falling government spending, which fell an annual 7.6 percent in the quarter.

NSCB Secretary General Romulo Virola said the 7.3-percent full-year GDP expansion was the highest since 1986 when the dictator Ferdinand Marcos was toppled in the Edsa Revolution.

Growth by sector

Private sector investment in construction, machinery and equipment resulted in a robust 17-percent growth in gross domestic capital formation. This supported the healthy pace of growth in manufacturing and services, according to the NSCB.

Industry contributed 3.9 percentage points to total GDP growth on the back of brisk manufacturing, particularly electrical machinery, petroleum and coal products, and food—thanks to a strong pick-up in domestic demand and the rebound in external trade.

The services sector contributed 3.5 percentage points to GDP growth, boosted by the strong performance of trade and private services. This was complemented by flourishing domestic investment, robust expansion in business process outsourcing, hotels and restaurants, wholesale and retail trade, and import and export trade.

Due to fewer typhoons, the agriculture sector managed to grow 5.4 percent in the fourth quarter. “Only two typhoons hit the country compared to seven in the last quarter of 2009,” Socioeconomic Planning Secretary Cayetano Paderanga noted.

Nonetheless, full-year growth in agriculture, fishery and forestry was subdued due to the lingering effects of the El Niño weather phenomenon in the first half of 2010.

Inflation, interest rates

Robust domestic demand, and rising global food and fuel prices, however, are adding to concerns about inflation.

“We were expecting the central bank to hike rates by the second quarter. But given these strong growth numbers, I think there’s scope for the central bank to normalize its monetary policy as early as the first quarter,” said Euben Paracuelles, an economist at Nomura in Singapore.

The Philippines is one of only two countries in Southeast Asia—the other is Indonesia—not to have raised interest rates since the end of the global financial crisis. The policy rate has been at a record low of 4 percent since July 2009.

The Bangko Sentral ng Pilipinas (BSP), however, said inflation was manageable.

“Not necessarily inflationary because the economy has expanded, its absorptive capacity has grown,” BSP Deputy Governor Diwa Guinigundo said in a text message to reporters.

Inflation is expected to rise up to the third quarter before stabilizing toward 2012, the BSP said on Friday. Annual inflation was 3.0 percent in November and December, after hitting a one-year low of 2.8 percent in October.

Exciting prospects

“We are looking toward exciting growth prospects,” Guinigundo said.

Likewise brimming with optimism, Paderanga said “the 2010 economic performance bolsters confidence that the economy is on a path of strong recovery.”

Arsenio M. Balisacan, dean of the University of the Philippines School of Economics, agreed that the rate of economic expansion in 2010 could provide momentum for future growth. But he added the challenges were many.

“Government has to raise revenue to sustain support for infrastructure development, investment in the social sector, particularly education and health, and institution building,” Balisacan said.

John Forbes, an investment adviser with the local American Chamber of Commerce, said the promise of further political stability during President Benigno Aquino III’s six-year term offered hope for a sustained period of strong growth.

He cited Mr. Aquino’s anticorruption campaign, social welfare spending and multibillion-dollar infrastructure upgrade plans as factors the Philippines could finally start to match its dynamic Asian neighbors.

“The Philippines is an economy in the world’s fastest-growing region and it is surrounded by economies that have grown at very high rates for a very long period of time,” Forbes said.

He said average GDP growth for the Philippines had been below 5.0 percent for the past decade.

“What this figure (2010 GDP growth) demonstrates is the potential of the Philippine economy to grow almost twice as fast (as 5.0 percent),” he said. With reports from Agence France-Presse and Reuters

Source: Riza T. Olchondra, Philippine Daily Inquirer

Oil up in Asia on demand hopes

SINGAPORE - Oil rose in afternoon Asian trade on Monday on expectations that an improving US economy will lead to higher demand for crude, analysts said.

New York's main contract, light sweet crude for February delivery, rose 34 cents to 91.72 dollars per barrel.

Brent North Sea crude for February was up 28 cents at 95.03 dollars.

The two contracts closed 2010 at a two-year high, buoyed by hopes that improved US economic momentum will bolster global growth and translate into higher oil demand, analysts said.

"A stronger US dollar means that the US economy is gaining momentum, which increases the future demand in oil," said Ong Yi Ling, an investment analyst from Phillip Futures in Singapore.

In afternoon Asian trade, the dollar was unchanged from Friday at 81.28 yen, while the euro was at 1.3298 to the dollar, down slightly from 1.3381.

The United States is the world's biggest oil consuming nation and the recent cold winter spell in its northeast region also boosted crude prices.

Source: Inquirer.net

Philippine stocks rise at start of 2011

With a high expectation for a gracious, saving year for equities, investors snapped up stocks leading to a New Year rise in Asian indexes, including that of the Philippine Stock Exchange (PSE) on Monday, this year's first trading day.

PSE's index rose up 14.07 points or 0.33 percent ending a good 4,215.21. The biggest gaining sector was the industrial sector, firming up with 2.54 percent. Value turnover was relatively low at 3.825 billion due to the holiday hangover.

Meanwhile, 79 advancers beat 54 decliners and 30 stocks remain unchanged.

In-demand stocks came from Manila Electric Co., Metro Pacific Investments Corp., Cyber Bay Corp., Aboitiz Power Corp., San Miguel Corp., Metropolitan Bank & Trust Co., SM Investments Corp., Nickel Asia Corp., Petron Corp., First Philippine Holdings Corp., Cebu Air Inc., San Miguel Corp. preferred shares and Megaworld Corp.

Dealers said investors hastily took up shares of Meralco and MPIC, the two most actively traded stocks for this day, on expectations that the First Pacific group could extract more values out of Meralco.

The decliners include Alliance Global Group Inc., DMCI Holdings Inc., Atlas Consolidated Mining & Development Corp., Energy Development Corp., Philippine Long Distance Telephone Co., Philex Mining Corp. and Ayala Land Inc.

RP Economy at Record High 7.3%

Arroyo's presidency has bear fruits, bringing in an economic pouring of 7.3% in its national growth from outrageous election spending, an okay-rise in remittances from abroad, and improved business and consumer confidence.

Both the GDP and GNP of the country outpaced expectations.

Augusto Santos, director general of NEDA, stated that “the improvement in the global economy, brighter economic outlook, increased business and consumer confidence, and election-related spending all contributed to the resurgence in economic activities."

The industrial sector, which embraces the fields of manufacturing, utilities, mining and quarrying, grew 15.7% during the first quarter, way better than last year's contraction of 2.6%. The services sector, which includes the growing business process outsourcing sub-sector, also increased to 6.1% in the first quarter. However, the agriculture, forestry and fisheries sector was hit largely due to the dry spell, contracting at 2.5%.

Santos suggested that to prevent stagnant growth or probable decline, the government has to increase spending on infrastructure, social services and education.

For more information, click on this link.