PHILIPPINE ECONOMIC PROFILE
Source: World Bank in the Philippines
The Philippines is one of the most dynamic economies in the East Asia Pacific region. With increasing urbanization, a growing middle class, and a large and young population, the Philippines’ economic dynamism is rooted in strong consumer demand supported by a vibrant labor market and robust remittances. Business activities are buoyant with notable performance in the services sector including the business process outsourcing, real estate, and finance and insurance industries.
Sound economic fundamentals and a globally recognized competitive workforce reinforce the growth momentum. Having sustained average annual growth of 6.4% between 2010-2019 from an average of 4.5% between 2000-2009, the country is on its way from a lower middle-income country with a gross national income per capita of US$3,850 in 2019 to an upper middle-income country (per capita income range of US$4,046–$12,535) in the near term.
Real economic growth, however, has been challenged by the COVID-19 (coronavirus) outbreak and the strict community quarantine measures imposed in the country. Growth is now projected to contract in 2020, driven by significant declines in consumption and investment growth, and exacerbated by the sharp slowdown in exports, tourism, and remittances.
Nevertheless, economic growth is expected to rebound gradually in 2021-2022 assuming a containment of the virus domestically and globally, and with more robust domestic activity bolstered by greater consumer and business confidence and the public investment momentum.
In recent years, the Philippine economy has made progress in delivering inclusive growth, evidenced by a decline in poverty rates and its Gini coefficient. Poverty declined from 23.3% in 2015 to 16.6% in 2018 while the Gini coefficient declined from 44.9 to 42.7 over the same period. The ongoing increasing trend in real wages, which is expected to have a positive impact on household incomes—particularly those from the lower income groups—will be hampered by the impact of the COVID-19, with negative consequences also for poverty reduction in the Philippines.
Last Updated: Oct 16, 2020