The Philippine Economy

Transcription

1 The Philippine Economy RECENT PERFORMANCE & PRIORITY REFORMS FOR SUSTAINED GROWTH ADORACION M. NAVARRO Undersecretary, Regional Development Office National Economic and Development Authority 1

2 8 6 4 PH economic growth in sharp upward trajectory 6.7% (2017) % (S1 2018) Source: Philippine Statistics Authority (PSA) 1 st Semester 2018 GDP growth remains stable PARTICULARS FY st Sem st Sem GROSS DOMESTIC PRODUCT By Industrial Origin Agri, Fishery and Forestry Industry o.w. Manufacturing Services By Expenditure Household Final Consumption Exp Gov t Final Consumption Exp Capital Formation o.w. Fixed Capital Formation Exports Imports Source: PSA 2

3 Thailand 4.6% Malaysia 4.5% China 6.7% Singapore 3.9% Vietnam 6.8% Indonesia 5.3% In Q2 2018, the Philippines was among the fastestgrowing economies in the region Philippines 6.0% Rising contribution of INDUSTRY and INVESTMENT Demand Side Supply Side 2.8% % % % % 4.5% 6.4% 6.8% Q Household Consumption Government Investment Net Exports Q Agriculture Industry Services Source: Philippine Statistics Authority 3

4 Our stronger fiscal position has been recognized, investment-grade sovereign credit rating sustained Fiscal side: Modest fiscal deficit; Declining Public debt & interest payments; Increasing reliance on domestic financing, which contributed to a more resilient fiscal position Share of expenditures allocated to interest payments Fiscal Position as of S Int. Payments to Disbursement Primary Exp to GDP (rhs) National gov t outstanding debt (% of GDP) (2.0) (7.0) as of S Fiscal Position Revenue Effort Tax Effort National Government Borrowing Program (%) Domestic Foreign This follows the GFSM 2014 concept External position is supportive of economic growth Current Account & External Debt External Debt to GDP ratio - LHS Current Account to GDP Ratio - RHS 2017 Q Q OF Remittances and OFW Deployment Cash Remittances (US$bn), LHS OF Deployment ('000), RHS Jan-May '17 Jan-May ' Merchandise Foreign Trade (US$ billion) Exports Imports Net FDI (US$ billion) H1 H Source: Bangko Sentral ng Pilipinas, PSA 4

5 The recent inflation uptrend is expected to normalize in the medium term in percent, % Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Headline Inflation Low Target High Target 9 Tourism performance continues to support growth Visitor Arrivals to the Philippines (in millions) % 34.1% 39.1% 35.0% 4.0% 9.0% 4.3% 4.7% 9.3% 4.2% 14.9% % 9.3% 11.7% 9.5% 38.1% 12.6% 14.8% 15.1% 15.1% 4.0% 9.1% 14.8% 13.8% 26.0% 25.5% 24.8% 15.2% 20.1% 19.8% Visitor Receipts (in PhP billion) Jan-May 2018 Jan-May Korea USA China Japan Australia Others Note: Excludes OFs and OFWs Jan- May 2018 Jan- May 5

6 Our vibrant economy is producing more and better jobs Unemployment and Underemployment Rate, FY (in %) Summary of Labor and Employment Indicators, April 2017 and April 2018 (in 000 except rates) Indicators April 2018 p April 2017 Underemployment Underemployment (%) Unemployment (%) a/ 2015b/ 2016c/ 2017d/ Unemployment Population 15 years & over 71,014 69,605 Labor Force Participation Rate (%) Employment Level 40,896 40,271 Employment Rate (%) Employment Generation Unemployment Level 2,360 2,443 Unemployment Rate (%) Underemployment Level 6,934 6,468 Underemployment Rate (%) a/ starting 2004, LFS results used the 2000 Census of Population and Housing (CPH); b/ FY 2015 exclude Leyte; c/ starting April 2016, LFS results used the 2013 Master Sample and 2010 CPH); p preliminary Source: Labor Force Survey, PSA The Outlook: Bright Prospects The Philippines is expected to remain one of the fastest-growing economies in Asia World Output India Philippines China Vietnam Malaysia Indonesia Thailand Singapore F 2019F Source: Forecasts are from IMF-WEO April 2018 for World, China, India, Indonesia, Malaysia, Philippines, and Singapore; IMF-WEO July 2018 updated forecasts for India; latest Article IV reports for Thailand, and Vietnam; Actual values are based on country statistics offices/ bureaus 6

7 The Outlook: Bright Prospects Expected Drivers of Growth Demand side Household consumption: Higher disposable income due to tax reform, manageable inflation, lifting of QR on rice, improving labor market Government spending: Expansion of social programs (i.e, UCT, CCT, K-12, NHIP, free tertiary education, etc) Investment: Public construction; private construction; reduction in cost of doing business; proposed reduction in foreign investment restrictions (RFINL) Exports: Full implementation of export development plan; closer ASEAN economic integration; good prospects for tourism Supply side Industry: Construction and infrastructure development; Manufacturing resurgence, and spillover to utilities sector; reductions in policy uncertainty in mining Services: Wholesale and retail trade, transport and communication will benefit from stronger consumption and international and domestic tourism; entry of new telco player, e-commerce; Agriculture: Diversification program towards highvalue crops; infrastructure investment 1 3 Contractionary monetary policy of advanced economies Moderation of growth in the medium-term Natural hazards Potential Risks to Growth Delays in infra projects and logistics bottleneck E X T E R N A L Inward looking policies leading to tariff increases and trade tensions DOMESTIC Rising inflation Restrictive employment protection legislation Build up of financial sector risks and excessive credit growth Geopolitical tensions Peace and security risks 7

8 Philippine Development Plan GDP Growth Target 7.0% to 8.0% annual average from 2018 to Key Policy Reform Agenda Sustaining/Accelerating Economic Growth 1 Improve government processes dealing with business 4 Ensure the timely execution of the budget 2 3 Ease restrictions on foreign investments Pursue tax reform towards a simple, fair, and equitable tax system to boost consumption spending and investments 5 Seek out new export markets to further diversify export destinations 8

9 Key Policy Reform Agenda Sustaining/Accelerating Economic Growth 6 Lift the quantitative restrictions (QR) on rice 8 Invest in disaster resiliency 7 Diversify to high-value crops 9 Ensure timely restoration of normalcy in affected areas in Mindanao Key Policy Reform Agenda Sustaining/Accelerating Economic Growth Sustain and enhance programs that target the vulnerable population Strengthen S&T and Innovation Ecosystem to Face up to Disruptive Technologies Implement a National ID System Accelerate infrastructure development 9

10 Infrastructure Flagship Projects Status per Milestone Milestone No. of Projects As of June Development Pre-investment Study (Pre-FS/ FS) Implementation Budgeting/Financing DED/Procurement Procurement Detailed Eng g Design (DED) Construction Ongoing Completed 1 3. For Review 7 TOTAL Sep-18 Infrastructure Flagship Projects 1 Nationwide 45 in Luzon 2 Inter-island Connectivity 10 in Visayas 17 in Mindanao 10

11 Infrastructure Flagship Projects in the Visayas Region Air Transport The government will exhaust all possible means to improve the operational efficiency of airports and to address constraints to optimal capacity utilization (PDP ) Project IA Cost (PhP M) Implementation Period Approval Status Iloilo International Airport Project DOTr 30, NEDA Board Approved Bacolod-Silay International Airport Project New Bohol Airport - O&M Concession DOTr 20, NEDA Board Approved DOTr 2, TBD NEDA Board Approved 11

12 Water Transport Port facilities will be improved to ensure that inter-island shipping will remain a viable option for transporting people and cargo (PDP ) Project New Cebu International Container Port IA DOTr Cost (PhP M) 9, Implementation Period Approval Status NEDA Board Approved Inter-island Bridges adequate, accessible, reliable, and safe access for people and goods across the country, neighboring regions, and the world Inter-island bridges and bridges across smaller bodies of water will form part of the road network (PDP ) Project Panay-Guimaras-Negros (PGN) Island Bridge Project Cebu - Bohol Link Bridge (included in the Nationwide Island Provinces Link Bridges) Bohol - Leyte Link Bridge (included in the Nationwide Island Provinces Link Bridges) Cebu - Negros Link Bridge (included in the Nationwide Island Provinces Link Bridges) Leyte - Surigao Link Bridge (included in the Nationwide Island Provinces Link Bridges) Luzon - Samar Link Bridge (included in the Nationwide Island Provinces Link Bridges) IA Cost (PhP M) Implementation Period Approval Status DPWH 27, TBD To be submitted DPWH 56, TBD To be submitted DPWH 72, TBD To be submitted DPWH 14, TBD To be submitted DPWH 47, TBD To be submitted 24 DPWH 57, TBD To be submitted 12

13 Water Resources toward(s) achieving adequate access and sustainable water resources (PDP ) Project Bohol Northeast Basin Multipurpose Project Panay River Basin Integrated Development Project IA Cost (PhP M) Implementation Period Approval Status NIA 4, To be submitted NIA 19, To be submitted Thank you and Mabuhay! pdp.neda.gov.ph 2040.neda.gov.ph 13