Philippines Economic Forecast

June 21, 2010Philippinesby EW Content Team

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Philippines is the 33rd largest economy in the world,12th in Asia and 4th in South East Asia with a GDP (PPP) of US$188.719 billion in 2010. It is also classified as one of the 150 emerging economies listed by the International Monetary Fund. According to Goldman Sachs, by 2050, Philippines will be the 14th largest economy in the world.

During the 2008 global financial crisis, Philippines is one of the countries in Southeast Asia that managed to avoid recession partly due to minimal exposure to the toxic securities, and large amount of remittance from the five million Filipino working overseas. GDP growth slowed down to 1.1 percent during the crisis, but rebounded to 7.3 percent in 2010, a 34-year high in the Philippines economic history.

Philippines' GDP Forecast

Philippines is the 47 largest economy in the world according to GDP (Current prices, US dollars) and the 33 largest according to GDP (PPP). In 2010, Philippines' GDP(Current Prices, US dollars) was US$188.719 and with a GDP (PPP) of US$351.37 billion. By 2011, Mexico's economy GDP (PPP) will grow by 6.10 percent to US$372.81. After which, Philippines' GDP (PPP) is expected to grow annually by 6.3-6.89 percent from 2012 to 2016. By the end of 2016, Philippines' GD P (PPP) will reach US$513.073

Similarly, Philippines's GDP (PPP) per capita is expected to see consistent growth. In 2010, Philippines GDP (PPP) per capita was US$3737.46. From 2011 to 2016, Philippines GDP (PPP) per capita will grow annually by 4.26-4.79 percent to US$4852.04. However, despite the growth, Philippines will still remain number 123 in world rankings according to GDP (PPP) per capita.

Philippines' Unemployment Forecast

Philippines has the highest unemployment rate in Southeast Asia, and one of the highest in the whole of Asia. In 2010, the unemployment rate in Philippines is 7.2 percent. However, at this rate, it is at a record-low unemployment rate of more than 3 decades in the history of Philippines' economy. The unemployment rate expects to drop to 7 percent in 2013 and remain the same until 2016.

Philippines has a large labor export market, with more than 2,500 Filipinos leaving the country daily to seek better job prospects overseas. The high migration rate has generated a large amount of remittance from Filipinos working overseas, amounting as high as US$18.7 billion in 2010, contributing to 10 percent of nation's GDP.

High population growth rate is another factor for the high unemployment rate in Philippines. The country's population growth rate of 2.04 is one of the highest in Asia. The country's job market cannot supply enough jobs for the 400,000 fresh graduates which entered the labour force every year, on top of the retrenched and unemployed workers.

Philippines's Inflation Rate & Current Account

In 2010, Philippines has an inflation rate (Average Consumer Price Change %) of 3.797 percent. This is a significant low inflation rate compared to the 9.299 percent inflation rate in 2008, the year when the financial crisis occurred. The inflation rate expects to rise by 29.31 percent, to 4.91 percent in 2011. From 2013 to 2016, the inflation is expected to remain at 4 percent level.

Philippines posted a current account surplus of US$8.465 billion in 2010. This shows a progressive recovery of the export market since 2008, when it posted a current account surplus of US$3.627 billion. The export market expects to shrink in the next few years with decking current account surplus. In 2011, current account surplus expects to decline by 30.15 percent to US$5.91 billion. From 2013 to 2016, current account surplus is expected to decline by 11.3 to 30 percent every year. By end of 2016, the current account surplus will reach US$2.733 billion.