The Philippine economy is projected to be the fourth largest in Asia and 19th largest in the world by 2050.[37] By 2035, the Filipino economy is predicted to be the 22nd largest in the world.[38]
Historical growth of the Philippine economy from 1961 to 2015
The Philippine economy has been growing steadily over decades and the International Monetary Fund in 2014 reported it as the 39th largest economy in the world. The Philippines posted a high GDP growth rate of 7.6 percent in 2022.[39] However, the country is not a part of the Group of 20 nations; instead, it is grouped in a second tier for emerging markets or newly industrialized countries. Depending on the analyst, this second tier can go by the name the Next Eleven or the Tiger Cub Economies.
A chart below outlines selected statistics showing trends in the gross domestic product of the Philippines using data taken from the International Monetary Fund.[40][41]
^As a result of shutdown of businesses imposed by the lockdowns to contain the COVID-19 pandemic.
Composition by sector
Filipino men at work in Brunei
As a newly industrialized country, the Philippines is still an economy with a large agricultural sector; however, the country's service industry has expanded recently.[48] Much of the industrial sector is based on processing and assembly operations in the manufacturing of electronics and other high-tech components, usually from foreign multinational corporations.
Filipinos who go abroad to work–-known as Overseas Filipino Workers or OFWs—are a significant contributor to the economy but are not reflected in the below sectoral discussion of the domestic economy. OFW remittances is also credited for the Philippines' recent economic growth resulting in investment status upgrades from credit ratings agencies such as the Fitch Group and Standard & Poor's.[49] From more than US$2 billion worth of remittance from Overseas Filipinos sent to the Philippines in 1994,[50] this significantly increased to a record US$36.14 billion in 2022.[51][52]
As of 2022[update], agriculture employs 24 percent of the Filipino workforce[53] accounting for 8.9 percent of the total GDP.[54] The type of activity ranges from small subsistence farming and fishing to large commercial ventures with significant export focus.
The Philippines is one of the largest producers of sugar in the world.[62] At least 17 provinces located in eight regions of the nation have grown sugarcane crops, of which the Negros Island Region accounts for half of the country's total production. As of Crop Year 2012–2013, 29 mills are operational divided as follows: 13 mills in Negros, 6 mills in Luzon, 4 mills in Panay, 3 mills in Eastern Visayas and 3 mills in Mindanao.[63] A range from 360,000 to 390,000 hectares (890,000 to 960,000 acres) are devoted to sugarcane production. The largest sugarcane areas are found in the Negros Island Region, which accounts for 51 percent of sugarcane areas planted. This is followed by Mindanao which accounts for 20 percent; Luzon with 17 percent; Panay with 7 percent and Eastern Visayas with 4 percent.[64]
The ABS used in Mercedes-Benz, BMW, and Volvo cars are made in the Philippines. Automotive sales in the Philippines increased to 352,596 units in 2022 from 268,488 units a year prior.[65]Toyota sells the most vehicles in the country;[65][66] this is followed by Mitsubishi, Ford, Nissan, and Suzuki.[65]Honda and Suzuki produce motorcycles in the country.[67] Since around the 2010s, several Chinese car brands have entered the Philippine market; these include Chery and Foton Motor.[68][69]
Aerospace products in the Philippines are mainly for the export market and include manufacturing parts for aircraft built by both Boeing and Airbus. Moog is the biggest aerospace manufacturer with base in Baguio; the company produces aircraft actuators in their manufacturing facility.[70] Total export output of aerospace products in the Philippines reached US$780 million in 2019.[71]
The Philippine Electronics Industry is classified into (73%) Semiconductor Manufacturing Services (SMS) and (27%) Electronics Manufacturing Services (EMS) according to SEIPI, the largest organization of foreign and Filipino electronics companies in the Philippines.[78] Electronic products continued to be the country's top export with total earnings of US$45.66 billion and accounted for 57.8 percent of the total export of goods in 2022.[20]
About 60 percent of total mining production are accounted for by non-metallic minerals, which contributed substantially to the industry's steady output growth between 1993 and 1998, with the value of production growing 58 percent.[citation needed] Philippine mineral exports amounted to US$4.22 billion in 2020.[83] Low metal prices, high production costs, lack of investment in infrastructure, and a challenge to the new mining law have contributed to the mining industry's overall decline.[citation needed]
The industry rebounded starting in late 2004 when the Supreme Court upheld the constitutionality of an important law permitting foreign ownership of Philippines mining companies.[84] In 2019, the country was the 2nd largest world producer of nickel[85] and the 4th largest world producer of cobalt.[86] According to Philippine Statistics Authority, the total monetary value of four key metallic minerals which were appraised to Class A namely: copper, chromite, gold and nickel were valued at US$9.01 billion in 2022.[87] Class A mineral resources are commercially recoverable that could contribute to economy annually.
Business process outsourcing (BPO) and the call center industry contribute to the Philippines' economic growth resulting in investment status upgrades from credit ratings agencies such as Fitch and S&P.[49] In 2008, the Philippines has surpassed India as the world leader in business process outsourcing (BPO).[88][89] The industry generated 100,000 jobs, and total revenues were placed at US$960 million for 2005. In 2011, BPO sector employment ballooned to over 700,000 people[90] and is contributing to a growing middle class; this increased to around 1.3 million employees by 2022.[91] BPO facilities are concentrated in IT parks and centers in economic zones across the Philippines—[92] mainly in six "centers of excellence": Metro Manila, Metro Cebu, Metro Clark, Bacolod, Davao City, and Iloilo City; other areas considered as "next wave cities" for BPO include Baguio, Cagayan de Oro, Dasmariñas, Dumaguete, Lipa, Naga, and Santa Rosa, Laguna.[93] The majority of the top ten BPO firms of the United States operate in the Philippines.[94]
Call centers began in the Philippines as plain providers of email response and managing services and is a major source of employment. Call center services include customer relations, ranging from travel services, technical support, education, customer care, financial services, online business to customer support, and online business-to-business support. The Philippines is considered as a location of choice due to its many outsourcing benefits such as less expensive operational and labor costs, the high proficiency in spoken English of a significant number of its people, and a highly educated labor pool.[95][96]
The growth in the BPO industry is promoted by the Philippine government. The industry is highlighted by the Philippines Development Plan as among the 10 high potential and priority development areas. To further entice investors, government programs include different incentives such as tax holidays, tax exemptions, and simplified export and import procedures. Additionally, training is also available for BPO applicants.[97]
The Philippines has significant potential in solar energy; however, as of 2021[update], most of the domestically produced electricity is based on fossil fuel resources, particularly coal.[98][99] The country produced 7,399 megawatts (9,922,000 hp) of renewable energy in 2019.[79]
On November 15, 2022, the renewable energy (RE) sector has been granted to operate in 100 percent foreign ownership from the current 40 percent cap to allow the entry of foreign capital to RE industries, as the Department of Energy were targeting the renewable energy's share in the country's power generation mix from the current 22 to 35 percent by 2030 and 50 percent by 2040.[100] Danish firm Copenhagen Infrastructure Partners (CIP) is investing US$5 billion to develop three offshore wind energy projects with a potential capacity of 2,000 megawatts (2,700,000 hp); it will be located in Camarines Norte and Camarines Sur (1000 MW), Northern Samar (650 MW), Pangasinan and La Union (350 MW).[101] In 2022, the share of RE in the energy mix was at 22.8 percent.[102]
The Philippines is a major player in the global shipbuilding industry[103] with 118 registered shipyards in 2021[104] distributed in Subic, Cebu,[105]Bataan, Navotas and Batangas.[106][107] It has been the fourth largest shipbuilding nation since 2010.[108][109] Subic-made cargo vessels are exported to countries where shipping operators are based. South Korea's Hanjin started production in Subic in 2007 of the 20 ships ordered by German and Greek shipping operators.[110]Bulk carriers, container ships and big passenger ferries are built in the country's shipyards. General Santos' shipyard is mainly for ship repair and maintenance.[111]
Surrounded by waters, the country has abundant natural deep-sea ports ideal for development as production, construction and repair sites. In the ship repair sector, the Navotas complex in Metro Manila is expected to accommodate 96 vessels for repair.[112] Shipbuilding is part of Philippines' maritime heritage;[113] it contributed almost 30 percent[114] of revenues in the portion of ocean-based industries that account for 3.6 percent of the total GDP in 2021.[115]
Tourism is an important sector for Philippine economy. The travel and tourism industry contributed 6.2%% to the country's GDP in 2022;[116] this was lower than the 12.7% recorded in 2019 prior to the COVID-19 lockdowns.[117] Popular destinations among tourists include Boracay, Palawan, Cebu and Siargao. While the Philippines has encountered political and social challenges that have affected its tourism industry, the country has also taken steps to address these issues.[118] Over the past years, there have been efforts to improve political stability, enhance security measures, and promote social inclusivity, all of which contribute to creating a more favorable environment for tourism, such as the Boracay rehabilitation.[119]
As of 2022, 5.23 million Filipinos were employed in the tourism industry, and the Philippine government received ₱208.96 billion (equivalent to $3.68 billion) in revenue from foreign tourists, about 25% of whom came from Boracay.[120] The country attracted a total of 5,360,682 foreign visitors in 2015 through its tourism campaign of It's More Fun in the Philippines![121] In 2019, foreign arrivals peaked at 8,260,913.[122]
According to the Philippine Statistics Authority (PSA), gross regional domestic product (GRDP) is GDP measured at regional levels. Figures below are for the year 2019.
Industries: electronics assembly, aerospace, agribusiness, automotive, IT and business process outsourcing, shipbuilding, garments, footwear, pharmaceuticals, chemicals, wood products, financial services, food processing, petrochemical, metalcasting and mining, real estate, textile, tourism[15][16]
^International Monetary Fund. (October 2010).
The Philippine Stock Exchange, It is one of the oldest stock exchanges in Southeast Asia, having been in continuous operation since its inception in 1927. It currently maintains two trading floors, one at the Ayala Tower One in the Makati Central Business District, and one at its headquarters in Pasig. The PSE is composed of a 15-man Board of Directors, chaired by Jose T. Pardo.
World Economic Outlook Data, By Country – Philippines: [selected annual data for 1980–2015]. Retrieved 2011-01-31 from the World Economic Outlook Database.
^"Homepage |". Semiconductor and Electronics Industries in the Philippines Foundation.
^ abPower Planning and Development Division, Electric Power Industry Management Bureau. 2019 Power Situation Report(PDF). Department of Energy (Report). p. 7. Archived(PDF) from the original on April 2, 2023. Retrieved February 19, 2023.
Hawes, Gary, And Ruth T. Mcvey. (2018) "Marcos, His Cronies, and the Philippines' Failure to Develop." Southeast Asian Capitalists (Cornell University Press, 2018) pp. 145–160.
Yang, Lan, et al. "Can an island economy be more sustainable? A comparative study of Indonesia, Malaysia, and the Philippines." Journal of Cleaner Production 242 (2020): 118572.
109,035,343 (13th)[3][4]
4.7% (July 2023)[9]
95th (easy, 2020)[17]
