Daylight in the Philippines
The Philippine Economic Team conducted on 02 February 2011 its Year-end Briefing. Below are the highlights:
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A Resilient and Fast-growing Economy
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The Philippines, one of the few countries that avoided a recession in 2009, staged a strong recovery in 2010 as the economy grew 7.3% - its highest in more than 20 years;
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Healthy economic growth is expected to be sustained in the medium term with better conditions in the global economy and economic outperformance in the Philippines’ key export markets.
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The structure of the Philippine economy is similar to those of advanced economies, with consumption accounting for more than 70% of GDP.
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A Clear Political Commitment to Fiscal Sustainability
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The administration has made fiscal sustainability the cornerstone of its effective governance agenda;
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Intense focus has been placed on improving tax collection as evidenced by the removal of the Philippines from the OECD “grey list”, a recognition that it is now compliant with accepted tax standards;
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Proactive debt management has reduced rollover risk and increased debt carrying capacity while minimizing foreign exchange risk and increasing self-sufficiency of funding.
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A Fortified External Position and a Sound Banking System
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Over the last decade, the Philippines has transformed itself into a country with sustained structural current account surpluses and rapid reserve accumulation;
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Gross international reserve expanded to a record US$62.4 billion at end-December 2010. This large stockpile of international reserves provides a healthy buffer against external shocks – reserve holdings can cover close to 11 times the country’s short-term external debt on original maturity;
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The Business Process Outsourcing (BPO), industry which is growing at an average of 20% annually, is one of the driving factors behind the improvement of net services trade balance annually.
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A More Stable Political and Institutional Environment
The uncontested outcome of the last elections was widely regarded as a positive development for the Philippines and could signal a structural change in political dynamics ushering in more stable political transitions.
