Abstract
Context: The Philippine economy is expected to grow in line with potential, at around 61/2 percent per annum. Inflation is projected to remain within the BSP's target band (3±1 percent). The external position is strong and fiscal policy is prudent, with a declining public debt ratio. Its small, bank-centric financial system has strong buffers, and risks associated with bank-corporate-real estate linkages are currently contained. Poor infrastructure has constrained private investment and job creation. Public investment continues to be low due to weak implementation capacity despite an increase in the investment budget and progress on fiscal transparency. Investment in human capital has been raised but needs to be stepped up. Financial development and inclusion, as well as structural reforms to foster competition and diversification, are essential for inclusive growth. Risks: Tilted to the downside; tighter global financial conditions and a surge in financial volatility leading to sharp capital outflows; continuing weak budget execution; and severe El Niño conditions.
Context
1. Addressing the large infrastructure gap is needed to raise potential growth and reduce poverty and external imbalances, supported by financial deepening while safeguarding financial stability. This necessitates revenue mobilization and capital market development. The latter is important to provide an alternative source of financing for Public Private Partnership (PPP) projects, and private investments including small- to medium-sized enterprises (SMEs). Monetary and macroprudential policies should aim at avoiding excessive credit growth and balance sheet mismatches. All this comes at a time of heightened global financial uncertainty that could spill over to emerging market economies (EMEs) like the Philippines.
Growth and Inflation
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: CEIC Data Co., Ltd.
Growth and Inflation
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: CEIC Data Co., Ltd.Growth and Inflation
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: CEIC Data Co., Ltd.2. The remarkable improvement in the Philippine economy since 2010 reflects prudent macroeconomic policies, as well as the favorable global financial cycle. Achieving the authorities’ growth target of 7–8 percent per annum will require tackling long-standing barriers to investment and broad-based growth.
Current Account Balance and Foreign Reserves
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: CEIC Data Co, Ltd.
Current Account Balance and Foreign Reserves
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: CEIC Data Co, Ltd.Current Account Balance and Foreign Reserves
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: CEIC Data Co, Ltd.
Public and External Debt
(In percent of GDP, end of period)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: CEIC Data Co., Ltd.
Public and External Debt
(In percent of GDP, end of period)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: CEIC Data Co., Ltd.Public and External Debt
(In percent of GDP, end of period)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: CEIC Data Co., Ltd.3. The current administration, whose term ends in June 2016, should continue to institutionalize governance reforms and fiscal transparency and initiate economic reforms that the next government can take forward to lift the country’s growth potential. In particular, economic policy should focus on scaling up infrastructure and human capital investment and spending for social needs to reduce poverty. This would help ensure that the Philippines’ young and growing population has adequate job opportunities at home, reducing labor migration, especially of skilled labor.
4. At the conclusion of the 2014 Article IV consultation, Executive Directors commended the authorities’ prudent policies that had delivered strong macroeconomic outcomes and set the stage for favorable growth prospects. However, they noted potential risks from tighter global financial conditions, and therefore stressed the importance of continued prudent macroeconomic policies while stepping up reforms to sustain strong growth and reduce poverty.
Recent Developments, Outlook, and Risks
A. Recent Developments
5. Real GDP grew by 6.1 percent in 2014 but slowed to 5.2 percent in the first quarter of 2015. The main growth drivers in 2014 were household consumption, private construction, and exports of goods and services. The first quarter 2015 slowdown was due mainly to temporary factors, including the effects of dry weather on agricultural production, weak global demand, and slow budget execution.
6. Inflation fell below the bottom of the BSP’s target band (3±1 percent) in May 2015, led by lower fuel and food prices. After reaching 4.9 percent (y/y) in August 2014, inflation fell to 1.2 percent in June 2015. As the economy is growing broadly at potential, there is no evidence of price or wage pressures, and considerable slack in the labor market remains. The current dry weather associated with El Niño has not yet resulted in higher inflation.
Contributions to GDP Growth
(Year-on-year percent change)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: CEIC Data Company Ltd.; and IMF staff estimates.
Contributions to GDP Growth
(Year-on-year percent change)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: CEIC Data Company Ltd.; and IMF staff estimates.Contributions to GDP Growth
(Year-on-year percent change)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: CEIC Data Company Ltd.; and IMF staff estimates.
Consumer Price Inflation: Headline and Core
(In percent)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Philippines authorities; and IMF staff estimates.
Consumer Price Inflation: Headline and Core
(In percent)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Philippines authorities; and IMF staff estimates.Consumer Price Inflation: Headline and Core
(In percent)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Philippines authorities; and IMF staff estimates.
National Government Balance
(In percent of GDP)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Philippine authorities; and IMF staff estimates.
National Government Balance
(In percent of GDP)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Philippine authorities; and IMF staff estimates.National Government Balance
(In percent of GDP)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Philippine authorities; and IMF staff estimates.7. The fiscal deficit was smaller than the 2 percent of GDP target in 2014 due to slow budget execution. Revenue increased as a share of GDP due to improvements in tax administration. Expenditures, especially capital spending, fell short of the budget largely due to weak implementation capacity and slow adjustment to reforms in some line ministries, and delayed post-typhoon reconstruction. A Supreme Court ruling that made aspects of the administration’s Disbursement Acceleration Program unconstitutional further slowed budget execution in 2014. Budget execution remained slow in the first quarter of 2015, particularly for capital spending. However, momentum is building on the implementation of PPP projects.
8. Credit growth was strong in 2014 but slowed and became more balanced in the first five months of this year. While broad based, the slowdown was sharper for those sectors that saw faster credit growth in the recent past, including construction and real estate. Banks remain well capitalized, with low levels of nonperforming loans and abundant liquidity.
9. The current account surplus rose in 2014 against the backdrop of lower oil prices, subdued import volumes, and robust export growth. Gross foreign reserves were US$81 billion in June 2015. While the peso has remained stable vis-à-vis the U.S. dollar since early 2014, it has appreciated significantly in effective terms along with the U.S. dollar.
Bank Credit Growth and Credit to GDP
(In percent of four-quarter rolling GDP)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: CEIC Data Company Ltd; and IMF staff estimates.
Bank Credit Growth and Credit to GDP
(In percent of four-quarter rolling GDP)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: CEIC Data Company Ltd; and IMF staff estimates.Bank Credit Growth and Credit to GDP
(In percent of four-quarter rolling GDP)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: CEIC Data Company Ltd; and IMF staff estimates.
Balance of Payments 1/
(In percent of GDP)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: CEIC Data Company Ltd.1/ BPM6 basis.
Balance of Payments 1/
(In percent of GDP)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: CEIC Data Company Ltd.1/ BPM6 basis.Balance of Payments 1/
(In percent of GDP)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: CEIC Data Company Ltd.1/ BPM6 basis.B. Outlook and Risks
10. Economic growth is expected to pick up slightly in 2015, with credit growth and inflation remaining moderate and the current account surplus rising. Real GDP is projected to grow by 6.2 percent in 2015 as lower commodity prices lift household consumption and improved budget execution raises public spending. Consistent with projected investment growth, credit is expected to grow at about 15 percent (or about 2 percentage points of GDP) in 2015, in line with what appears to be a sustainable pace of financial deepening, although this warrants close monitoring on an ongoing basis. Lower oil prices, partly offset by somewhat higher food prices deriving from El Niño conditions, should keep inflation near the bottom of the BSP’s target band. The current account surplus is expected to widen to 5.0 percent of GDP in 2015 due to lower oil prices and continued inflows from Business Process Outsourcing (BPO) and remittances.
11. Over the medium term, economic growth is projected at 6.5 percent, in line with potential growth (Box 1). Public and private investments are projected to lead the growth, as increased public infrastructure spending and implementation of PPP projects should crowd in private investment. Inflation is expected to increase as oil prices rise but is projected to remain within the BSP’s target range. The pickup of public and private investments, together with a trend real effective appreciation of the peso, is expected to narrow the current account surplus and relieve pressure on domestic capacity constraints going forward, with higher U.S. interest rates tending to tighten lending conditions consistent with moderate credit growth going forward.
12. Risks to the outlook are tilted to the downside (Appendix 1). An upside risk is a stronger lift to demand from lower oil prices. On the downside, tighter global financial conditions and a surge in financial volatility, amplified by low market liquidity, could lead to sharp capital outflows and tightening of domestic financing conditions, with significant macrofinancial spillovers on the economy, but the Philippines’ strong macroeconomic fundamentals should provide a cushion (Box 2). Continued weak budget execution could slow down needed improvements in public infrastructure, while the risk of a larger than budgeted deficit due to election spending is limited given the government’s strong commitment. Finally, there is a downside risk associated with severe El Niño conditions, leading to a poor harvest regionally and a rapid run-up in food prices. This could induce inflation to rise sharply and breach the target band, affecting the poor quite severely. The Philippine authorities are well equipped to respond as needed with suitable policies should any of these risk scenarios materialize, particularly given the strong fundamentals, ample policy space, and strong foreign reserve position.
C. External Sector Assessment
13. The Philippines’ external position strengthened significantly since 2010. The current account has moved to a structural surplus and gross international reserves increased to US$80 billion (28 percent of GDP) or 217 percent of the IMF’s metric of reserve adequacy at end-2014, well in excess of the 100–150 percent suggested range. The external sector is moderately stronger than warranted by fundamentals and desired policies, consistent with moderate currency undervaluation, reflecting mainly the low level of investment.
Current account: The IMF External Balance Assessment (EBA) model places the predicted current account at 7.8 percent of GDP below the actual current account in 2014, although Philippines specific factors such as natural disaster risk and remittances could explain up to 4 percentage points of GDP of the residual (see Appendix 2). The recent appreciation of the peso could help narrow the current account gap over time, but lower oil prices are likely to more than offset this effect in 2015.
Addressing imbalances: The Philippines’ current account gap is attributable to its low level of investment compared with other EMEs. Raising the investment rate and thus boosting potential growth, by improving the business environment and infrastructure, would help reduce external imbalances. The current account gap would also decrease as budget execution improves.
International reserves. Reserve accumulation since 2010 has reflected current and financial account surpluses. The BSP accumulated sizable reserves in 2010–12 when ultra accommodative monetary policies in the advanced economies (AEs) stimulated large capital flows into the Philippines and other EMEs. Since the taper tantrum in mid-2013, there have been large capital outflows triggered in part by a tightening of eligibility for the Special Deposit Account (SDA) facility, which led to an exodus of foreign funds; however, foreign reserves have remained broadly stable supported by current account surpluses. Staff continues to recommend that the exchange rate be allowed to move freely in line with market forces with intervention limited to smoothing excessive volatility in both directions.
Investment
(In percent of GDP)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF, World Economic Outlook.
Investment
(In percent of GDP)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF, World Economic Outlook.Investment
(In percent of GDP)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF, World Economic Outlook.Authorities’ Views
14. The authorities emphasized the structural causes of the current account surplus and unique role of worker remittances, which are not well captured in the EBA model. They observed that the peso has been broadly unchanged vis-à-vis the U.S. dollar since early-2014 while the gross international reserves have been broadly stable. The problem of low investment is likely to be addressed going forward given the large pipeline of infrastructure projects. The exchange rate continues to be market determined, with foreign exchange intervention limited to smoothing excessive volatility.
Policies for Macroeconomic and Financial Stability
A. Fiscal Policy
15. Fiscal policy should focus on supporting infrastructure investment and inclusive growth. Returning to the authorities’ medium-term deficit target of 2 percent of GDP by increasing public infrastructure spending and implementing much-needed post-typhoon reconstruction and social spending in the 2015 budget is appropriate given the needs in these priority areas and on the back of expenditure under-execution in 2014. It is also consistent with debt sustainability as the 2 percent of GDP deficit target would steadily reduce the general government debt-to-GDP ratio over the medium term to below 30 percent (from 36.4 percent of GDP in 2014). Staff’s fiscal projections are in line with this, but less ambitious than the authorities’ in 2015 in light of limitations in current execution capacity. Going forward, the authorities plan to increase infrastructure spending from 3 percent of GDP in 2014 to 5 percent by 2016, including by facilitating PPP projects. Staff projects public capital expenditure at 3.8 percent of GDP in 2016, while PPP projects could amount to 1 percent of GDP, bringing overall infrastructure investment to 4.8 percent of GDP in that year. An increase in public investment, combined with improvement in efficiency, would contribute to higher economic growth in the medium term (Box 3).
16. Public expenditure management needs to be strengthened further. Sustained efforts to improve the investment selection and implementation processes will be required. Moreover, a better system for projecting and tracking spending is needed to strengthen budgeting and cash management. Staff urges the passage of the Public Financial Management (PFM) bill to further strengthen the overall PFM governance framework and supports the authorities’ continuing effort to improve PFM, as acknowledged in the Fund’s Fiscal Transparency Evaluation (FTE). Regarding the PPPs, amendments to the Build Operate Transfer (BOT) law and Right of Way Bill will institutionalize the progress that has been made so far and further strengthen the legal framework, which will in turn help ensure robust implementation of projects.
17. There is limited scope to cut other expenditure to support budgetary spending on infrastructure and social needs. At less than 20 percent of GDP for the general government, total expenditure is lower than the average for the ASEAN-5 and much lower than the emerging and developing countries average. Moreover, the Philippines does not have energy subsidies, the public wage bill is small, and key public services like tax collections and customs enforcement are facing large manpower shortages.
18. The authorities’ initiative to strengthen revenue collections is welcome. Additional revenue will be needed to support higher spending on infrastructure and social needs. Congress has already passed the Tax Incentives Management and Transparency Act (TIMTA), which would provide for regular reviews of tax incentives and make them more transparent. Staff supports ongoing tax administration reform that has improved arrears collection, VAT compliance including through targeted audits, and filing rates for large taxpayers. These gains should more than offset the negative effects from the lower oil prices and slightly increase the tax revenue-to-GDP ratio in 2015.
19. Staff strongly encourages a tax reform package that is net revenue enhancing. This would entail, for instance, rationalization of tax incentives, reducing certain VAT exemptions, and increases in fuel excises, that more than compensate for any revenue-losing measures in the corporate and personal income tax reform.1 The authorities are crafting a tax reform package that appears to be net revenue enhancing and have requested Fund TA on some aspects. Even in the current pre-election context, staff strongly urges the authorities to avoid any tax package that would entail a net revenue loss. In this regard, it is encouraging that Congressional leaders have vowed not to reduce taxes before compensatory measures are enacted. Staff also supports the Department of Finance’s efforts to amend the bank secrecy law to allow the tax authorities’ access to individual bank deposit information and make tax evasion a predicate crime for money laundering in order to improve the efficiency and equity of revenue collection. Staff simulations indicate that a tax-financed public investment increase would result in a more favorable public debt trajectory, which would translate into superior output growth over the medium term (Box 3).
Authorities’ Views
20. The authorities acknowledged the sizeable challenges involved in getting the spending agencies to accelerate infrastructure project implementation. Their own investigation shows that capacity constraints had played a major role in implementation delays in 2014. The authorities are addressing the procurement issues by requiring strengthening of procurement units at spending agencies and revising operational regulations. A Presidential order has been issued to create a Delivery Unit in major departments to monitor closely, trouble shoot, and report on implementation delays. The authorities noted their commitment to improving infrastructure, including by increasing the share of infrastructure in the budget and the implementation of several PPP projects. Revenue targets are challenging but they provide incentives for increased collections and administrative reforms as shown by the steady increase in revenue under the current administration. There is a need for comprehensive tax reform to widen the tax base. Allowing tax collectors access to bank deposits and making tax evasion a predicate crime are needed to improve compliance. The authorities value IMF TA highly and hope to benefit from additional TA going forward.
B. Monetary Policy
21. Current monetary settings are appropriate judging from: inflation projections within the target band; estimates of the output gap near zero even with financial variables added (Box 1); and credit growth within normal metrics. Credit growth was strong in 2014, including in the construction and real estate sectors, spurring concerns about rising macrofinancial imbalances. The BSP’s tightening measures last year (the banks’ required reserve ratio was increased by 200 basis points, to 20 percent, and policy rates were increased by 50 basis points), and autonomous tightening since then due to rising real interest rates and an appreciating REER, has succeeded in moderating credit growth, making it more balanced, and bringing inflation down, by the first half of 2015. One-off effects of lower oil prices are expected to dissipate by late 2015, following which inflation is still expected to remain comfortably within the target band. Moreover, significant slack remains in the labor market.
22. Nevertheless, the BSP should remain vigilant and be ready to tighten policy if signs of rising inflation pressure and accelerating broad-based credit growth were to emerge going forward. However, rapid food price increases due to El Niño related drought should be addressed by allowing food imports in a timely manner and would not justify monetary tightening unless second round effects were to appear.
Real Interest Rate and Change in the REER
(In percent)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: CEIC Data Co., Ltd.; and IMF staff estimates.
Real Interest Rate and Change in the REER
(In percent)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: CEIC Data Co., Ltd.; and IMF staff estimates.Real Interest Rate and Change in the REER
(In percent)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: CEIC Data Co., Ltd.; and IMF staff estimates.23. Monetary transmission has improved as the structural liquidity overhang has been reduced but more work is needed given that the pass-through from policy rates to retail rates remains weak. A liquidity overhang persists, although this has declined significantly from last year, reflecting the BSP’s preemptive tightening in 2014 and capital outflows. Staff supports the BSP’s efforts to improve the effectiveness of monetary policy transmission through the implementation of an interest rate corridor, following up on Fund TA, and supported by implementing deposit auctions and reforming the reverse repo auction mechanism, and passage of the BSP charter that authorizes the issuance of central bank bills and a minimum capital level. With the greater use of open market operations to manage liquidity, the required reserve ratio can be lowered over the medium term to reduce intermediation cost and improve efficiency.
Authorities’ Views
24. The BSP views the current monetary policy stance as appropriate. The authorities see no need to adjust monetary policy at the moment as inflation is in the lower end of the target band, credit growth is moderating, and economic growth is still robust, but agree that they will remain vigilant.
25. The BSP shared the staff’s assessment that El Niño effects could pose a major risk to food prices in 2015. The National Food Authority council has authorized an additional 500 thousand metric tons of rice imports in 2015, which should mitigate the effects of El Niño conditions on rice prices and inflation.
C. Financial Cycles, Systemic Risks, and Macroprudential Policies
26. Given the Philippines’ bank-centric financial system and high concentration of conglomerates, macrofinancial linkages have largely taken the form of corporate leverage cycles financed by banks. In the boom phase of the global financial cycle, this led to leveraged investment in the construction and real estate sectors, with rising capital market issuances, although banks were constrained by their 25 percent single borrower limits in some cases. As the BSP tightened monetary policy and used its macroprudential tools to target risky activities, credit has moderated and the sectoral composition has become more balanced. Wholesale bank funding from abroad is minimal and subject to strict limits. At 7 percent of GDP, household debt does not appear to pose systemic risks.
27. Credit growth since 2010 has been rapid but has been below typical metrics of credit booms. In 2014, credit growth came close to exceeding some of these metrics but prompt BSP action brought it back down (Box 1). Going forward, credit is expected to increase by about 2 percentage points of GDP per year, a rate of financial deepening that appears to be sustainable based on cross-country studies. However, its sustainability will need to be assessed carefully on an ongoing basis in view of concentration and other risks identified below. Credit growth to real estate and construction has moderated. As noted above, projected credit growth is consistent with investment and economic growth.
28. Nonfinancial corporates appear broadly resilient to shocks but a definitive assessment requires finer data. Staff encourages the authorities to work further on filling these data gaps, particularly concerning intra-group linkages. Nonfinancial corporate debt is low but rising and leverage is unevenly distributed, making some firms vulnerable to a rise in interest rates (Box 2). Foreign exchange exposure appears low given moderate foreign exchange debt and existing natural hedges.
29. Bank and nonfinancial corporate exposure to real estate has risen but risks are still moderate. Nonbank financial institutions (NBFIs) remain small but are growing rapidly. Existing data on the exposure of NBFIs to real estate are scarce but a plan has been developed to fill data gaps with IMF TA.2 An official residential price index is currently under construction by the BSP and Philippines Statistical Agency, while the few commercially available measures show modest price growth in most segments.
30. Macroprudential policies should continue to play an important role by limiting any buildup of systemic vulnerabilities, including due to excessive credit growth in specific sectors.3 In light of the acceleration in credit growth in 2014 and risks of domestic asset price booms, the BSP conducted stress tests on banks’ real estate loan exposures and required corrective actions, enhanced monitoring of banks’ exposures to all types of real estate, and provided guidance on real estate mortgage loans, setting their maximum loan value at 60 percent of the appraised value. These measures have helped to restrain credit growth to the real estate sector. Single borrower limits (set at 25 percent of core capital) should be strictly enforced with the additional 25 percent allowance for exposures to PPPs allowed to lapse. Staff encourages ongoing efforts to strengthen the financial stability supervisory framework, including by capacity building and enhanced coordination among the stakeholders of the Financial Stability Coordinating Council. In particular, staff supports the draft bill broadening the BSP’s financial stability mandate and providing it with greater access to nonbank financial information that is currently being discussed in Congress. The SEC has taken steps to enhance its corporate data collection efforts and promote capital market development, and staff encourages further efforts in this direction.
Authorities’ Views
31. The BSP views credit expansion by banks, in concert with other forms of financial deepening and inclusion, as needed to support growth over the medium term. They welcomed the recent shift in credit growth away from real estate into productive areas like manufacturing. The Philippines cannot rely solely on banking to finance its ambitious infrastructure investment. Financial market development is needed to help finance large forthcoming PPP projects. The BSP had already liberalized entry for foreign banks and five foreign banks have been approved for entry, which is a major step because it increases competition, reduces concentration risks, and eases the constraints that single borrower limits impose on aggregate financing of infrastructure investment.
Investment, Financial Development, and inclusive Growth
A. Investment and Social Needs
32. Boosting the level of investment is a major structural challenge. Public and private investment rates in the Philippines are well below regional peers, as reflected in its low capital stock and infrastructure quality. The main impediments to private investment are inadequate infrastructure, a weak investment climate, and restrictions on foreign direct investment. Immediate priorities include implementation of the transport system in Manila (Manila Dream Plan approved by NEDA) and improvements in airports, road connectivity, and seaports across the country.
Overall Quality of Infrastructure
(Scale, 1-7; higher score indicates better infrastructure)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF, World Economic Outlook.
Overall Quality of Infrastructure
(Scale, 1-7; higher score indicates better infrastructure)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF, World Economic Outlook.Overall Quality of Infrastructure
(Scale, 1-7; higher score indicates better infrastructure)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF, World Economic Outlook.33. Another key structural challenge is to make growth more inclusive. Although poverty has fallen, it remains high (see selected issues paper, Chapter 6). Given that rice is an important item in household consumption, staff urges the authorities to proceed with the reform of the National Food Authority and ease quantitative rice import restrictions to lower rice prices. Faster employment creation would also help alleviate poverty, including by developing the agribusiness, tourism and mining sectors, which can be labor intensive and have a comparative advantage. Addressing the uncertainty and non-transferability of property rights on agricultural land would support its use as collateral for bank loans and improve access to financing. The recent amendments to the cabotage law (that reduces the high cost of inter-island shipping) and enactment of a competition law would help spur a level playing field but the costs of doing business would need to be reduced particularly for micro- and small- and medium-sized enterprises (MSMEs). Expanded education and training programs, such as those conducted by the Technical Education and Skills Development Authority, would address skills mismatches. Job opportunities would be created through the further expansion of BPOs by moving to higher value added segments, and promotion of light manufacturing for under-skilled workers.
Authorities’ Views
34. The government has augmented a number of growth-inclusive budgetary expenditures. This includes expansion of the Conditional Cash Transfer (CCT) program to high school students, indigenous peoples, homeless itinerants, and families; strengthening of kindergarten and high school education as part of the K to 12 program; and expanding the health insurance program to cover the poor and the informal sectors, hiring and assignment of doctors and nurses to rural areas, and the construction and equipping of rural and barangay health stations. Many of these initiatives have been financed by revenue from “sin taxes.”
35. The government agreed that the phasing out of quota restrictions on rice importation with adequate support for farmers is important for poverty reduction. The worsening of poverty indicators in 2014, despite income growth among the low income segments, was attributable to the sharp rice price increase caused by the delay in rice imports and distribution. By allowing the market to determine the level of rice importation, rice prices are expected to become less susceptible to supply shocks, and in turn, more favorable to the poor.
B. Financial Development and Inclusion
36. There is a tension between the important goals of financial deepening and inclusion and financial stability. Financial development in the Philippines is progressing broadly in line with its income level but considerable growth potential remains. Recent efforts to advance financial development as a means of promoting faster and more inclusive growth should be encouraged and focused on expanding the role of the capital markets, with particular emphasis on long-term financing for infrastructure investment (PPPs), and expanding the existing set of financial inclusion initiatives. World Bank and other metrics underscore the need for financial deepening and inclusion (see selected issues paper, Chapter 5).
37. The capital markets could facilitate better risk sharing and open up new sources of long-term financing for both SMEs and infrastructure development projects (see selected issues paper, Chapter 5). The latter function is especially relevant given the low investment rate in the Philippines and the banking sector’s preference for financing working capital and short-term loans. More generally, the development of a broader set of long-term financial securities (project bonds, asset backed securities, etc.) would better allow issuers to align funding needs with the duration, income, and diversification needs of investors like pension funds and insurers.
38. A more stable macroeconomic environment has supported capital market development in recent years but more can be done. Key policy priorities include developing an organized market for repo and risk management instruments, a smoother liquidity profile across the government yield curve, establishing guidelines for structured credit issuance, and revitalizing the ‘second board’ for SME equity listings by lowering listing and transaction costs. The enabling environment could be made even more conducive to capital market development if taxation policy incentivizes greater activity from both issuers and investors.4 Full engagement by regulators and industry participants in the ASEAN Capital Markets Forum would also be welcome as a means of better integrating and deepening the Philippines’ securities markets over time.
39. A new national financial inclusion strategy, focused on access, education and consumer protection, was recently released. There is a strong need to increase the provision of banking and payment services, particularly outside the heavily urbanized regions. Formal micro-lending initiatives should also be encouraged. The notable increase in micro-insurance penetration in recent years should continue given that coverage in the Philippines remains low.
Authorities’ Views
40. Capital market development and financial inclusion are essential to promote financing for PPPs and wider access to finance. The BSP agreed that capital market development is needed given the inherent difficulty that banks have in providing long-term financing for PPPs while mitigating concentration risk. Integration with ASEAN capital markets should be pursued. The new national financial inclusion strategy provides a framework for bringing much-needed financial services to all. Policy frameworks in the areas of micro health insurance and agriculture micro insurance are under consultation, while the blueprint for a movable collateral registry covering an expanded list of financial assets is being finalized.
Staff Appraisal
41. The Philippine economy has continued to perform strongly. Sound macroeconomic policies and prudent financial sector supervision, combined with strong macroeconomic fundamentals, have delivered solid economic growth, low inflation, and financial stability.
42. The macroeconomic outlook is expected to remain favorable. Despite the temporary slowdown in the first quarter of this year, the economy is expected to grow at a robust 6.2 percent in 2015, with credit growing at a moderate pace, and inflation in the lower half of the target range.
43. This favorable outlook faces several downside risks. Tighter global financial conditions and a surge in financial volatility could lead to sharp capital outflows, continued weak budget execution could slow down much needed improvements in infrastructure, and more severe El Niño conditions could lead to higher inflation and affect the poor severely.
44. Staff supports the government’s plan to raise infrastructure investment and return to its medium-term fiscal deficit target of 2 percent of GDP. The increase in public spending in the 2015 budget is appropriate from a cyclical and development perspective, given the low inflation environment, large infrastructure and social needs, low and declining public debt, low long-term interest rates, and post-typhoon reconstruction needs.
45. Public expenditure management should be strengthened further. Staff urges the passage of the PFM bill, more efficient expenditure tracking and cash management, and amendments to the BOT law and Right of Way bill to strengthen the implementation of PPPs.
46. Additional revenue is needed to finance large infrastructure and social needs. The authorities are urged to ensure net revenue enhancement in their tax reform package by rationalizing tax incentives, streamlining VAT exemptions, and raising fuel excises, to offset the losses from the proposed reductions in corporate and personal income taxes. To strengthen tax collection, the tax authorities should be given access to individual bank deposit information and tax evasion should be made a predicate crime.
47. Monetary policy is currently appropriate. Nonetheless, the BSP should remain vigilant and be ready to tighten if inflation or credit growth were to accelerate and there are signs of overheating. The BSP is encouraged to implement the interest rate corridor to improve monetary policy transmission, to be supported by the passage of the BSP charter that authorizes the issuance of central bank bills and a minimum capital level. With official reserves more than adequate, the exchange rate should continue to be allowed to move freely in line with market forces, while smoothing excessive volatility in both directions.
48. Macroprudential policies should be used to guard against systemic risks to financial stability, including in specific sectors. Staff supports the authorities’ use of targeted prudential policies to tame financial excesses and strengthen resilience. More stringent prudential regulations may be needed if any systemic risks become apparent. Broadening the BSP’s financial stability mandate remains a priority, and staff supports the draft law being discussed in Congress. Staff also supports the authorities’ efforts to be allowed better access to information on conglomerates’ finances.
49. The authorities are encouraged to focus on key medium-term priorities to allow the country reap the dividends from its young and growing population. This will involve increasing infrastructure spending, facilitating PPPs, and improving the investment climate. Staff supports the government’s plans to improve human capital and social services for the poor.
50. Financial deepening and inclusion are also essential elements of the authorities’ inclusive growth strategy. While expanded bank lending in productive sectors will facilitate growth, the composition of credit growth should be closely monitored on an ongoing basis to avoid risks from credit booms. Staff believes that further development of alternative forms of financing and hedging, such as corporate bond and equity markets, is needed to support infrastructure investment, and welcomes the recent release of the national strategy for financial inclusion.
51. The Philippines’ strong growth performance in recent years is attributable to prudent macroeconomic policies, strong capital inflows from the expansion phase in the global financial cycle, and the boom in the BPO industry, but it has the potential to perform even more strongly. Poverty incidence needs to fall more, infrastructure quality and financial market access for poor households and SMEs need to improve, and the financial sector needs further development. With the strengthened governance structure, the government is advised to push economic reforms firmly to reach its growth targets in the context of a turn in the global financial cycle while maintaining macroeconomic and financial stability.
52. It is recommended that the next Article IV consultation take place on the standard 12-month cycle.
Philippines: Real and Financial Cycles
The output gap is near zero in 2015 even if measures are augmented by financial variables. Following the tightening of monetary policy in 2014, the credit gap is also near zero in 2015, with credit growth below typical metrics of credit booms.
Staff estimates of the real cycle indicate that the output gap is near zero in 2015. The Hodrick-Prescott filter, a multivariate filter, and a production function were used to estimate the Philippine output gap (see the selected issues paper, Chapter 2). Actual data up to 2014 and staff projections for 2015–20 were used. All approaches yield remarkably similar results, with potential output growth accelerating to 6.5 percent in 2015–16, and the output gap closing in 2015.
Potential Growth: Different Methodologies
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF staff estimates.
Potential Growth: Different Methodologies
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF staff estimates.Potential Growth: Different Methodologies
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF staff estimates.
Output Gap: Different Methodologies
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF staff estimates.
Output Gap: Different Methodologies
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF staff estimates.Output Gap: Different Methodologies
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF staff estimates.Alternative estimates of the financial cycle suggest that, after the tightening of monetary policy in 2014, the credit gap is zero or slightly positive in 2015. The approach of Mendoza and Terrones (2008), which looks at cycles in real credit per capita compared to its trend, suggests a slightly positive credit gap in 2015–16, but below the credit boom threshold. Dell’Aricia and others (2012) look at deviations of credit-to-GDP from a backward looking trend. A credit boom is identified when the deviation from trend is larger than a threshold and growth of credit-to-GDP is larger than 10 percent, or when the latter is larger than 20 percent. This approach shows that the deviation of credit-to-GDP from trend was zero in 2014, below the threshold for credit booms, but growth of credit-to-GDP was close to 10 percent.
Credit Gap: Different Methodologies
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF staff estimates.
Credit Gap: Different Methodologies
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF staff estimates.Credit Gap: Different Methodologies
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF staff estimates.
Growth in Credit-to-GDP
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF staff estimates.
Growth in Credit-to-GDP
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF staff estimates.Growth in Credit-to-GDP
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF staff estimates.Financial variables contain useful information concerning the business cycle position. Expansions that coincide with rapid credit and asset price growth are stronger, while recessions coinciding with credit and asset price busts are longer and deeper. We used the BIS approach to integrate financial variables (real credit and stock prices), into a broader measure of the output gap. Results indicate that the output gap in the Philippines in 2015–16 is slightly larger when financial variables are included, consistent with a slightly positive credit gap. However, even in this case the output gap is very small.
Credit Neutral Output Gap: BIS Approach
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF staff estimates.
Credit Neutral Output Gap: BIS Approach
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF staff estimates.Credit Neutral Output Gap: BIS Approach
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Source: IMF staff estimates.Global Financial Cycle and Nonfinancial Corporate Sector Vulnerabilities
Higher U.S. interest rates would likely tighten financial conditions in the Philippines significantly, particularly if accompanied by higher volatility. Despite recent borrowing, nonfinancial corporates appear resilient.
Staff analysis suggests that the surge in capital inflows between 2010 and mid-2013 can largely be explained by global financial factors such as the VIX and U.S. short-term interest rates, with exchange rate expectations and domestic fundamentals playing a supporting role. Moreover, local bond yields and retail bank rates seem to be driven largely by the same global factors and U.S. term premia.
Higher U.S. bond yields coupled with bouts of global volatility could tighten domestic financial conditions and lower Philippine growth. A BVAR model shows that the VIX affects domestic demand via capital flows and asset re-pricing, whereas U.S. 10-year T-bond yields affect bank credit and investment (see selected issues paper, Chapter 1).
Accumulated Response to One Cholesky S.D. Shock to U.S. LT Interest Rate (Blue) and VIX (Red)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Accumulated Response to One Cholesky S.D. Shock to U.S. LT Interest Rate (Blue) and VIX (Red)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Accumulated Response to One Cholesky S.D. Shock to U.S. LT Interest Rate (Blue) and VIX (Red)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Given expected tighter financial conditions and resulting balance sheet effects, staff found moderate but concentrated leverage (see selected issues paper, Chapter 2). Nonfinancial corporate debt grew substantially since 2007 yet total debt is still low compared to peers. Turning away from aggregated data, which potentially masks pockets of vulnerability, and using firm-level data reveals that leverage and debt-at-risk vary significantly across sectors and that small firms, although more leveraged, do not pose systemic risks given their small debt share.
Selected Asia: Total Debt-to-GDP, 2014
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Mckinsey (2015); and IMF staff estimates.
Selected Asia: Total Debt-to-GDP, 2014
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Mckinsey (2015); and IMF staff estimates.Selected Asia: Total Debt-to-GDP, 2014
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Mckinsey (2015); and IMF staff estimates.
Philippines: Debt by Sector, 2014
(In percent points of GDP)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Mckinsey (2015); and IMF staff estimates.
Philippines: Debt by Sector, 2014
(In percent points of GDP)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Mckinsey (2015); and IMF staff estimates.Philippines: Debt by Sector, 2014
(In percent points of GDP)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Mckinsey (2015); and IMF staff estimates.The Philippine nonfinancial sector seems resilient to large shocks compared to other EMEs. Firms are more sensitive to interest rate shocks compared to FX shocks, due to low FX debt and natural hedges. Some real estate developers may be more vulnerable, in particular those involved in the rising unregulated shadow banking activity. Thus, firm-level developments should be closely monitored.
Philippines: Change in Debt by Sector, 2007-14
(In percent points of GDP)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Mckinsey (2015); and IMF staff estimates.
Philippines: Change in Debt by Sector, 2007-14
(In percent points of GDP)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Mckinsey (2015); and IMF staff estimates.Philippines: Change in Debt by Sector, 2007-14
(In percent points of GDP)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Mckinsey (2015); and IMF staff estimates.
Leverage Across Firm Size, 2013
(Frequency of debt-to-equity)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Orbis; and IMF staff estimates.
Leverage Across Firm Size, 2013
(Frequency of debt-to-equity)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Orbis; and IMF staff estimates.Leverage Across Firm Size, 2013
(Frequency of debt-to-equity)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Orbis; and IMF staff estimates.
Philippines: Debt-at-Risk Under Different Shocks 1/
(In percent of total debt)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Orbis; and IMF staff estimates.1/ Large FX shock”: 20% earnings, 30% FX and 30% interest payment, economy-wide natural hedge; “Sect. NH”: sector-level natural hedge; “Large IR shock”: 20% earnings, 10% FX and 50% interest payment.2/ Median of a group of 16 EMEs, Corporate Vulnerability Exercise, 4/22/15.
Philippines: Debt-at-Risk Under Different Shocks 1/
(In percent of total debt)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Orbis; and IMF staff estimates.1/ Large FX shock”: 20% earnings, 30% FX and 30% interest payment, economy-wide natural hedge; “Sect. NH”: sector-level natural hedge; “Large IR shock”: 20% earnings, 10% FX and 50% interest payment.2/ Median of a group of 16 EMEs, Corporate Vulnerability Exercise, 4/22/15.Philippines: Debt-at-Risk Under Different Shocks 1/
(In percent of total debt)
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Sources: Orbis; and IMF staff estimates.1/ Large FX shock”: 20% earnings, 30% FX and 30% interest payment, economy-wide natural hedge; “Sect. NH”: sector-level natural hedge; “Large IR shock”: 20% earnings, 10% FX and 50% interest payment.2/ Median of a group of 16 EMEs, Corporate Vulnerability Exercise, 4/22/15.Philippines: Improving Public Infrastructure
Improving public infrastructure would result in a sustained output increase and external rebalancing. Tax financed infrastructure yields better results in the long run. The effect is augmented when combined with increased efficiency.
While a need to increase public investment spending is clear, its efficiency should also be enhanced. Reflecting the persistently low level of public investment, public capital in the Philippines remains among the lowest in ASEAN, at about 35 percent of GDP (Figure 1). Thus there is a clear need to increase public investment. Better planning, better budget allocation, and more efficient implementation should improve public investment efficiency, as it would translate the same level of public investment into higher access to quality public infrastructure services (see selected issues paper, Chapter 4).
ASEAN: Public Investment and Public Capital Stock
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
ASEAN: Public Investment and Public Capital Stock
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
ASEAN: Public Investment and Public Capital Stock
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Model simulations suggest that improving public infrastructure would result in a sustained output increase (Figure 2). Two scenarios are considered using the IMF’s Global Integrated Monetary and Fiscal Model (GIMF): (i) a permanent increase in public investment from 3 percent to 5 percent of GDP in all subsequent years, financed by borrowing; (ii) the same increase in public investment, financed by an increase in consumption taxes. Then, each is divided into sub scenarios, with and without a gradual improvement in public investment efficiency.1/ All scenarios exhibit sustained output increases because the public infrastructure improvement amounts to a permanent improvement in the general productivity of the economy, which crowds in private investment.
Main Simulation Results
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Main Simulation Results
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Main Simulation Results
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Each scenario affects the economy differently. The debt-financed scenario results in a substantial increase in the public debt-to-GDP ratio, increasing the borrowing cost and constraining investment. In contrast, consumption is initially subdued in the tax-financed scenario because of the lower disposal income. Both scenarios benefit from increased efficiency.
Public infrastructure improvement influences the current account and inflation as well. It worsens the current account, helping with external rebalancing. It also generates additional domestic demand initially and thus creates inflationary pressures. Over time, the increase in supply capacity alleviates the inflationary pressures.
1/ The initial level of public investment efficiency is set according to the Public Investment Management Index (PIMI) developed in Dabla-Norris and others (2012).
Philippines: Real Sector
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Philippines: Real Sector
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Philippines: Real Sector
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Philippines: Monetary and Financial Conditions
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Philippines: Monetary and Financial Conditions
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Philippines: Monetary and Financial Conditions
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Philippines: Financial Market Comparisons
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Philippines: Financial Market Comparisons
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Philippines: Financial Market Comparisons
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Philippines: Cross-Country Financial Market Developments
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Philippines: Cross-Country Financial Market Developments
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Philippines: Cross-Country Financial Market Developments
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Philippines: External Sector
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Philippines: External Sector
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Philippines: External Sector
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Philippines: Banking Sector
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Philippines: Banking Sector
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Philippines: Banking Sector
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Emerging Markets: Social Conditions and Income Distribution
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Emerging Markets: Social Conditions and Income Distribution
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Emerging Markets: Social Conditions and Income Distribution
Citation: IMF Staff Country Reports 2015, 246; 10.5089/9781513591728.002.A001
Philippines: Selected Economic Indicators, 2010–16
Fund definition. Excludes privatization receipts and includes deficit from restructuring of the previous central bank (Central Bank-Board of Liquidators).
Includes the national government, 14 government-owned enterprises, social security institutions, and local governments.
Universal and Commercial Banks, May 2015 (year-on-year).
Secondary market rate, the latest data point is May 2015.
In BPM6. An increase in either assets or liabilities is always positive and a decrease is always negative. Net investment is assets minus
Includes external debt not registered with the central bank, and private capital lease agreements.
In percent of exports of goods and nonfactor services.
Reserves as a percent of short-term debt (including medium- and long-term debt due in the following year).
January - May 2015.
Philippines: Selected Economic Indicators, 2010–16
| Nominal GDP (2014): P 12,643 billion ($285 billion) | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Population (2013): 98.2 million | |||||||||
| GDP per capita in nominal terms: $2,772 | |||||||||
| Poverty headcount ratio at $1.25 a day at PPP (2012): 19 percent | |||||||||
| IMF quota: SDR 1,019.3 million | |||||||||
| Main products and exports: electronics, agriculture products, and business process outsourcing | |||||||||
| Unemployment rate (Q2:2015): 6.4 percent | |||||||||
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | |||
| Staff proj. | |||||||||
| GDP and prices (percent change) | |||||||||
| Real GDP | 7.6 | 3.7 | 6.7 | 7.1 | 6.1 | 6.2 | 6.5 | ||
| CPI (annual average) | 3.8 | 4.7 | 3.2 | 2.9 | 4.2 | 2.1 | 3.5 | ||
| CPI (end year) | 3.6 | 4.2 | 3.0 | 4.1 | 2.7 | 3.4 | 2.7 | ||
| Investment and saving (percent of GDP) | |||||||||
| Gross investment | 20.5 | 20.5 | 18.2 | 20.0 | 20.9 | 22.0 | 22.3 | ||
| National saving | 24.1 | 23.0 | 21.0 | 24.2 | 25.4 | 27.1 | 26.7 | ||
| Public finances (percent of GDP) | |||||||||
| National government balance (authorities’ definition) | −3.5 | −2.0 | −2.3 | −1.4 | −0.6 | −1.5 | −2.0 | ||
| National government balance 1/ | −3.6 | −2.1 | −2.4 | −1.5 | −0.6 | −1.5 | −2.0 | ||
| Nonfinancial public sector balance 2/ | −3.3 | −0.8 | −0.6 | 0.6 | 0.9 | 0.0 | −0.5 | ||
| Revenue and grants | 18.5 | 18.6 | 19.4 | 20.1 | 20.1 | 20.6 | 20.7 | ||
| Expenditure | 21.7 | 19.4 | 20.0 | 19.5 | 19.2 | 20.6 | 21.2 | ||
| Nonfinancial public sector debt | 54.8 | 55.3 | 53.0 | 51.3 | 47.8 | 45.5 | 42.5 | ||
| Monetary sector (percent change, end of period) | |||||||||
| Broad money (M3) 3/ | 10.0 | 7.1 | 9.4 | 31.8 | 11.2 / | 9.3 | … | ||
| Interest rate (91-day treasury bill, end of period, in percent) 4/ | 1.3 | 1.7 | 0.5 | 0.5 | 2.5/ | 2.1 | … | ||
| Credit to the private sector (in percent) 3/ | 8.9 | 19.3 | 16.2 | 16.4 | 19.9 / | 14.5 | … | ||
| External sector | |||||||||
| Export value, goods (percent change) | 26.2 | 4.1 | 21.2 | −4.0 | 7.3 | 3.5 | 5.5 | ||
| Import value, goods (percent change) | 24.7 | 9.5 | 11.3 | −4.8 | 2.3 | 1.6 | 7.1 | ||
| Current account (percent of GDP) | 3.6 | 2.5 | 2.3 | 4.2 | 4.4 | 5.0 | 4.5 | ||
| Capital account (US$ billions) | 0.1 | 0.2 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | ||
| Financial account (US$ billions) 5/ | −11.5 | −5.3 | −6.8 | 2.2 | 10.1 | 7.1 | 6.1 | ||
| Direct investment (net) 5/ | 1.6 | 0.3 | 1.0 | −0.1 | 0.8 | 0.0 | −0.7 | ||
| Errors and omissions (US$ billions) | −3.5 | 0.3 | −4.6 | −4.2 | −5.5 | −5.2 | −4.9 | ||
| Overall balance (US$ billions) | 15.2 | 11.4 | 9.2 | 5.1 | −2.9 | 3.1 | 4.3 | ||
| Total external debt (percent of GDP) 6/ | 36.9 | 33.7 | 32.0 | 28.9 | 27.3 | 25.6 | 23.1 | ||
| Debt service ratio 7/ | 13.6 | 13.6 | 9.9 | 11.1 | 8.7 | 7.8 | 10.6 | ||
| Reserves(US$ billions) | 62.4 | 75.3 | 83.8 | 83.2 | 79.5 | 81.7 | 84.5 | ||
| Reserves/short-term liabilities 8/ | 403.3 | 482.5 | 387.9 | 405.5 | 406.5 | 361.2 | 366.8 | ||
| Exchange rate (period averages) | |||||||||
| Pesos per U.S. dollar | 45.1 | 43.3 | 42.2 | 42.4 | 44.4 | 44.5 9/ | n.a. | ||
| Nominal effective exchange rate (2005 =100) | 100.0 | 99.0 | 102.6 | 105.4 | 102.7 | 109.6 9/ | n.a. | ||
| Real effective exchange rate (2005 =100) | 100.0 | 100.7 | 105.6 | 109.8 | 109.5 | 117.9 9/ | n.a. | ||
Fund definition. Excludes privatization receipts and includes deficit from restructuring of the previous central bank (Central Bank-Board of Liquidators).
Includes the national government, 14 government-owned enterprises, social security institutions, and local governments.
Universal and Commercial Banks, May 2015 (year-on-year).
Secondary market rate, the latest data point is May 2015.
In BPM6. An increase in either assets or liabilities is always positive and a decrease is always negative. Net investment is assets minus
Includes external debt not registered with the central bank, and private capital lease agreements.
In percent of exports of goods and nonfactor services.
Reserves as a percent of short-term debt (including medium- and long-term debt due in the following year).
January - May 2015.
Philippines: Selected Economic Indicators, 2010–16
| Nominal GDP (2014): P 12,643 billion ($285 billion) | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Population (2013): 98.2 million | |||||||||
| GDP per capita in nominal terms: $2,772 | |||||||||
| Poverty headcount ratio at $1.25 a day at PPP (2012): 19 percent | |||||||||
| IMF quota: SDR 1,019.3 million | |||||||||
| Main products and exports: electronics, agriculture products, and business process outsourcing | |||||||||
| Unemployment rate (Q2:2015): 6.4 percent | |||||||||
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | |||
| Staff proj. | |||||||||
| GDP and prices (percent change) | |||||||||
| Real GDP | 7.6 | 3.7 | 6.7 | 7.1 | 6.1 | 6.2 | 6.5 | ||
| CPI (annual average) | 3.8 | 4.7 | 3.2 | 2.9 | 4.2 | 2.1 | 3.5 | ||
| CPI (end year) | 3.6 | 4.2 | 3.0 | 4.1 | 2.7 | 3.4 | 2.7 | ||
| Investment and saving (percent of GDP) | |||||||||
| Gross investment | 20.5 | 20.5 | 18.2 | 20.0 | 20.9 | 22.0 | 22.3 | ||
| National saving | 24.1 | 23.0 | 21.0 | 24.2 | 25.4 | 27.1 | 26.7 | ||
| Public finances (percent of GDP) | |||||||||
| National government balance (authorities’ definition) | −3.5 | −2.0 | −2.3 | −1.4 | −0.6 | −1.5 | −2.0 | ||
| National government balance 1/ | −3.6 | −2.1 | −2.4 | −1.5 | −0.6 | −1.5 | −2.0 | ||
| Nonfinancial public sector balance 2/ | −3.3 | −0.8 | −0.6 | 0.6 | 0.9 | 0.0 | −0.5 | ||
| Revenue and grants | 18.5 | 18.6 | 19.4 | 20.1 | 20.1 | 20.6 | 20.7 | ||
| Expenditure | 21.7 | 19.4 | 20.0 | 19.5 | 19.2 | 20.6 | 21.2 | ||
| Nonfinancial public sector debt | 54.8 | 55.3 | 53.0 | 51.3 | 47.8 | 45.5 | 42.5 | ||
| Monetary sector (percent change, end of period) | |||||||||
| Broad money (M3) 3/ | 10.0 | 7.1 | 9.4 | 31.8 | 11.2 / | 9.3 | … | ||
| Interest rate (91-day treasury bill, end of period, in percent) 4/ | 1.3 | 1.7 | 0.5 | 0.5 | 2.5/ | 2.1 | … | ||
| Credit to the private sector (in percent) 3/ | 8.9 | 19.3 | 16.2 | 16.4 | 19.9 / | 14.5 | … | ||
| External sector | |||||||||
| Export value, goods (percent change) | 26.2 | 4.1 | 21.2 | −4.0 | 7.3 | 3.5 | 5.5 | ||
| Import value, goods (percent change) | 24.7 | 9.5 | 11.3 | −4.8 | 2.3 | 1.6 | 7.1 | ||
| Current account (percent of GDP) | 3.6 | 2.5 | 2.3 | 4.2 | 4.4 | 5.0 | 4.5 | ||
| Capital account (US$ billions) | 0.1 | 0.2 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | ||
| Financial account (US$ billions) 5/ | −11.5 | −5.3 | −6.8 | 2.2 | 10.1 | 7.1 | 6.1 | ||
| Direct investment (net) 5/ | 1.6 | 0.3 | 1.0 | −0.1 | 0.8 | 0.0 | −0.7 | ||
| Errors and omissions (US$ billions) | −3.5 | 0.3 | −4.6 | −4.2 | −5.5 | −5.2 | −4.9 | ||
| Overall balance (US$ billions) | 15.2 | 11.4 | 9.2 | 5.1 | −2.9 | 3.1 | 4.3 | ||
| Total external debt (percent of GDP) 6/ | 36.9 | 33.7 | 32.0 | 28.9 | 27.3 | 25.6 | 23.1 | ||
| Debt service ratio 7/ | 13.6 | 13.6 | 9.9 | 11.1 | 8.7 | 7.8 | 10.6 | ||
| Reserves(US$ billions) | 62.4 | 75.3 | 83.8 | 83.2 | 79.5 | 81.7 | 84.5 | ||
| Reserves/short-term liabilities 8/ | 403.3 | 482.5 | 387.9 | 405.5 | 406.5 | 361.2 | 366.8 | ||
| Exchange rate (period averages) | |||||||||
| Pesos per U.S. dollar | 45.1 | 43.3 | 42.2 | 42.4 | 44.4 | 44.5 9/ | n.a. | ||
| Nominal effective exchange rate (2005 =100) | 100.0 | 99.0 | 102.6 | 105.4 | 102.7 | 109.6 9/ | n.a. | ||
| Real effective exchange rate (2005 =100) | 100.0 | 100.7 | 105.6 | 109.8 | 109.5 | 117.9 9/ | n.a. | ||
Fund definition. Excludes privatization receipts and includes deficit from restructuring of the previous central bank (Central Bank-Board of Liquidators).
Includes the national government, 14 government-owned enterprises, social security institutions, and local governments.
Universal and Commercial Banks, May 2015 (year-on-year).
Secondary market rate, the latest data point is May 2015.
In BPM6. An increase in either assets or liabilities is always positive and a decrease is always negative. Net investment is assets minus
Includes external debt not registered with the central bank, and private capital lease agreements.
In percent of exports of goods and nonfactor services.
Reserves as a percent of short-term debt (including medium- and long-term debt due in the following year).
January - May 2015.
Philippines: National Government Cash Accounts, 2010–16
(In billions of pesos, unless otherwise indicated)
Projections include possible gains from tax administrative measures for 2015 and 2016.
Includes other percentage taxes, documentary stamp tax, and noncash collections. Noncash collections are also reflected as tax expenditures under current expenditures.
Includes privatization receipts as revenue and excludes the operations of the Central Bank-Board of Liquidators (CB-BOL).
Philippines: National Government Cash Accounts, 2010–16
(In billions of pesos, unless otherwise indicated)
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | ||||
|---|---|---|---|---|---|---|---|---|---|---|
| Budget | Proj. | Proj. | ||||||||
| Revenue and grants | 1,208 | 1,359 | 1,527 | 1,713 | 1,907 | 2,337 | 2,082 | 2,314 | ||
| Tax revenue | 1,094 | 1,202 | 1,361 | 1,536 | 1,720 | 2,194 | 1,877 | 2,090 | ||
| Net income and profits | 489 | 572 | 643 | 718 | 785 | … | 872 | 966 | ||
| Excises | 88 | 88 | 98 | 146 | 166 | … | 177 | 194 | ||
| VAT | 330 | 383 | 451 | 490 | 558 | … | 603 | 688 | ||
| Tariffs | 81 | 42 | 41 | 35 | 56 | … | 61 | 62 | ||
| Other 1/2/ | 106 | 117 | 129 | 146 | 155 | … | 164 | 181 | ||
| Nontax revenue | 114 | 157 | 166 | 178 | 187 | 141 | 206 | 224 | ||
| Expenditure and net lending | 1,529 | 1,561 | 1,781 | 1,881 | 1,984 | 2,621 | 2,291 | 2,618 | ||
| Current expenditures | 1,237 | 1,293 | 1,394 | 1,521 | 1,619 | 1,927 | 1,824 | 2,028 | ||
| Personnel services | 469 | 500 | 543 | 582 | 604 | … | 666 | 756 | ||
| Maintenance and operations | 182 | 201 | 237 | 283 | 309 | … | 361 | 397 | ||
| Allotments to local government units | 216 | 230 | 219 | 242 | 273 | … | 313 | 360 | ||
| Subsidies | 21 | 46 | 42 | 66 | 80 | … | 87 | 96 | ||
| Tax expenditure | 47 | 34 | 38 | 23 | 30 | … | 32 | 35 | ||
| Interest | 301 | 282 | 316 | 324 | 324 | 375 | 366 | 384 | ||
| Capital and equity expenditure | 283 | 250 | 359 | 344 | 351 | 668 | 448 | 569 | ||
| Capital expenditure | 281 | 237 | 338 | 333 | 350 | 639 | 446 | 566 | ||
| Equity | 2 | 13 | 21 | 11 | 2 | 29 | 2 | 2 | ||
| Net lending | 9 | 18 | 27 | 17 | 13 | 27 | 20 | 21 | ||
| Balance | −321 | −201 | −254 | −168 | −77 | −284 | −209 | −303 | ||
| On the authorities’ presentation 3/ | −314 | −198 | −243 | −164 | −73 | −284 | −206 | −299 | ||
Projections include possible gains from tax administrative measures for 2015 and 2016.
Includes other percentage taxes, documentary stamp tax, and noncash collections. Noncash collections are also reflected as tax expenditures under current expenditures.
Includes privatization receipts as revenue and excludes the operations of the Central Bank-Board of Liquidators (CB-BOL).
Philippines: National Government Cash Accounts, 2010–16
(In billions of pesos, unless otherwise indicated)
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | ||||
|---|---|---|---|---|---|---|---|---|---|---|
| Budget | Proj. | Proj. | ||||||||
| Revenue and grants | 1,208 | 1,359 | 1,527 | 1,713 | 1,907 | 2,337 | 2,082 | 2,314 | ||
| Tax revenue | 1,094 | 1,202 | 1,361 | 1,536 | 1,720 | 2,194 | 1,877 | 2,090 | ||
| Net income and profits | 489 | 572 | 643 | 718 | 785 | … | 872 | 966 | ||
| Excises | 88 | 88 | 98 | 146 | 166 | … | 177 | 194 | ||
| VAT | 330 | 383 | 451 | 490 | 558 | … | 603 | 688 | ||
| Tariffs | 81 | 42 | 41 | 35 | 56 | … | 61 | 62 | ||
| Other 1/2/ | 106 | 117 | 129 | 146 | 155 | … | 164 | 181 | ||
| Nontax revenue | 114 | 157 | 166 | 178 | 187 | 141 | 206 | 224 | ||
| Expenditure and net lending | 1,529 | 1,561 | 1,781 | 1,881 | 1,984 | 2,621 | 2,291 | 2,618 | ||
| Current expenditures | 1,237 | 1,293 | 1,394 | 1,521 | 1,619 | 1,927 | 1,824 | 2,028 | ||
| Personnel services | 469 | 500 | 543 | 582 | 604 | … | 666 | 756 | ||
| Maintenance and operations | 182 | 201 | 237 | 283 | 309 | … | 361 | 397 | ||
| Allotments to local government units | 216 | 230 | 219 | 242 | 273 | … | 313 | 360 | ||
| Subsidies | 21 | 46 | 42 | 66 | 80 | … | 87 | 96 | ||
| Tax expenditure | 47 | 34 | 38 | 23 | 30 | … | 32 | 35 | ||
| Interest | 301 | 282 | 316 | 324 | 324 | 375 | 366 | 384 | ||
| Capital and equity expenditure | 283 | 250 | 359 | 344 | 351 | 668 | 448 | 569 | ||
| Capital expenditure | 281 | 237 | 338 | 333 | 350 | 639 | 446 | 566 | ||
| Equity | 2 | 13 | 21 | 11 | 2 | 29 | 2 | 2 | ||
| Net lending | 9 | 18 | 27 | 17 | 13 | 27 | 20 | 21 | ||
| Balance | −321 | −201 | −254 | −168 | −77 | −284 | −209 | −303 | ||
| On the authorities’ presentation 3/ | −314 | −198 | −243 | −164 | −73 | −284 | −206 | −299 | ||
Projections include possible gains from tax administrative measures for 2015 and 2016.
Includes other percentage taxes, documentary stamp tax, and noncash collections. Noncash collections are also reflected as tax expenditures under current expenditures.
Includes privatization receipts as revenue and excludes the operations of the Central Bank-Board of Liquidators (CB-BOL).
Philippines: National Government Cash Accounts, 2010–16
(In percent of GDP, unless otherwise indicated)
Projections include possible gains from tax administrative measures for 2015 and 2016.
Includes other percentage taxes, documentary stamp tax, and noncash collections. Noncash collections are also reflected as tax expenditures under current expenditures.
Includes privatization receipts as revenue and excludes the operations of the Central Bank-Board of Liquidators (CB-BOL).
Consolidated (net of national government debt held by the sinking fund) and excluding contingent/guaranteed debt.
Defined as the deficit, plus amortization of medium- and long-term debt, plus the stock of short-term debt at the end of the last period.
Includes the national government, 14 government-owned enterprises, social security institutions, and local governments. Debt is consolidated (net of intra-nonfinancial public sector holdings of debt). Balance is cash basis.
Includes nonfinancial public sector, government financial institutions, and BSP. Balance is cash basis.
Using the nominal GDP in the authorities’ budget.
Philippines: National Government Cash Accounts, 2010–16
(In percent of GDP, unless otherwise indicated)
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Budget 8/ | Proj. | Proj. | |||||||||
| Revenue and grants | 13.4 | 14.0 | 14.5 | 14.8 | 15.1 | 16.7 | 15.3 | 15.4 | |||
| Tax revenue | 12.1 | 12.4 | 12.9 | 13.3 | 13.6 | 15.7 | 13.8 | 13.9 | |||
| Net income and profits | 5.4 | 5.9 | 6.1 | 6.2 | 6.2 | … | 6.4 | 6.4 | |||
| Excises | 1.0 | 0.9 | 0.9 | 1.3 | 1.3 | … | 1.3 | 1.3 | |||
| VAT | 3.7 | 3.9 | 4.3 | 4.2 | 4.4 | … | 4.4 | 4.6 | |||
| Tariffs | 0.9 | 0.4 | 0.4 | 0.3 | 0.4 | … | 0.4 | 0.4 | |||
| Other 1/2/ | 1.2 | 1.2 | 1.2 | 1.3 | 1.2 | … | 1.2 | 1.2 | |||
| Nontax revenue | 1.3 | 1.6 | 1.6 | 1.5 | 1.5 | 1.0 | 1.5 | 1.5 | |||
| Expenditure and net lending | 17.0 | 16.1 | 16.9 | 16.3 | 15.7 | 18.7 | 16.8 | 17.4 | |||
| Current expenditures | 13.7 | 13.3 | 13.2 | 13.2 | 12.8 | 13.8 | 13.4 | 13.5 | |||
| Personnel services | 5.2 | 5.2 | 5.1 | 5.0 | 4.3 | … | 4.9 | 5.0 | |||
| Maintenance and operations | 2.0 | 2.1 | 2.2 | 2.4 | 2.4 | … | 2.6 | 2.6 | |||
| Allotments to local government units | 2.4 | 2.4 | 2.1 | 2.1 | 2.2 | … | 2.3 | 2.4 | |||
| Subsidies | 0.2 | 0.5 | 0.4 | 0.6 | 0.6 | … | 0.6 | 0.6 | |||
| Tax expenditure | 0.5 | 0.3 | 0.4 | 0.2 | 0.2 | … | 0.2 | 0.2 | |||
| Interest | 3.3 | 2.9 | 3.0 | 2.3 | 2.6 | 2.7 | 2.7 | 2.6 | |||
| Capital and equity expenditure | 3.1 | 2.6 | 3.4 | 3.0 | 2.3 | 4.3 | 3.3 | 3.3 | |||
| Capital expenditure | 3.1 | 2.4 | 3.2 | 2.9 | 2.3 | 4.6 | 3.3 | 3.3 | |||
| Equity | 0.0 | 0.1 | 0.2 | 0.1 | 0.0 | 0.2 | 0.0 | 0.0 | |||
| Net lending | 0.1 | 0.2 | 0.3 | 0.1 | 0.1 | 0.2 | 0.1 | 0.1 | |||
| Balance | −3.6 | −2.1 | −2.4 | −1.5 | −0.6 | −2J0 | −1.5 | −2.0 | |||
| On the authorities’ presentation 3/ | −3.5 | −2.0 | −2.3 | −1.4 | −0.6 | −2.0 | −1.5 | −2.0 | |||
| Memorandum items: | |||||||||||
| National government | |||||||||||
| Primary balance | −0.2 | 0.8 | 0.6 | 1.4 | 1.9 | 0.7 | 1.2 | 0.5 | |||
| Debt 4/ | 46.2 | 44.9 | 44.2 | 42.7 | 39.7 | … | 38.5 | 36.6 | |||
| (In percent of national government revenues) | 344.3 | 320.9 | 306.0 | 287.9 | 263.4 | … | 252.2 | 238.0 | |||
| Gross financing requirement 5/ | 14.9 | 12.1 | 9.1 | 5.9 | 4.7 | … | 7.1 | 8.5 | |||
| Nonfinancial public sector (NFPS) 6/ | |||||||||||
| Balance | −3.3 | −0.8 | −0.6 | 0.6 | 0.9 | … | 0.0 | −0.5 | |||
| Debt | 54.8 | 55.3 | 53.0 | 51.3 | 47.8 | … | 45.5 | 42.5 | |||
| (In percent of NFPS revenues) | 296.3 | 297.6 | 273.1 | 254.8 | 237.7 | … | 221.4 | 205.0 | |||
| Consolidated public sector balance 7/ | 4.7 | 2.9 | 2.6 | 1.4 | 1.1 | … | 1.7 | 2.2 | |||
Projections include possible gains from tax administrative measures for 2015 and 2016.
Includes other percentage taxes, documentary stamp tax, and noncash collections. Noncash collections are also reflected as tax expenditures under current expenditures.
Includes privatization receipts as revenue and excludes the operations of the Central Bank-Board of Liquidators (CB-BOL).
Consolidated (net of national government debt held by the sinking fund) and excluding contingent/guaranteed debt.
Defined as the deficit, plus amortization of medium- and long-term debt, plus the stock of short-term debt at the end of the last period.
Includes the national government, 14 government-owned enterprises, social security institutions, and local governments. Debt is consolidated (net of intra-nonfinancial public sector holdings of debt). Balance is cash basis.
Includes nonfinancial public sector, government financial institutions, and BSP. Balance is cash basis.
Using the nominal GDP in the authorities’ budget.
Philippines: National Government Cash Accounts, 2010–16
(In percent of GDP, unless otherwise indicated)
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Budget 8/ | Proj. | Proj. | |||||||||
| Revenue and grants | 13.4 | 14.0 | 14.5 | 14.8 | 15.1 | 16.7 | 15.3 | 15.4 | |||
| Tax revenue | 12.1 | 12.4 | 12.9 | 13.3 | 13.6 | 15.7 | 13.8 | 13.9 | |||
| Net income and profits | 5.4 | 5.9 | 6.1 | 6.2 | 6.2 | … | 6.4 | 6.4 | |||
| Excises | 1.0 | 0.9 | 0.9 | 1.3 | 1.3 | … | 1.3 | 1.3 | |||
| VAT | 3.7 | 3.9 | 4.3 | 4.2 | 4.4 | … | 4.4 | 4.6 | |||
| Tariffs | 0.9 | 0.4 | 0.4 | 0.3 | 0.4 | … | 0.4 | 0.4 | |||
| Other 1/2/ | 1.2 | 1.2 | 1.2 | 1.3 | 1.2 | … | 1.2 | 1.2 | |||
| Nontax revenue | 1.3 | 1.6 | 1.6 | 1.5 | 1.5 | 1.0 | 1.5 | 1.5 | |||
| Expenditure and net lending | 17.0 | 16.1 | 16.9 | 16.3 | 15.7 | 18.7 | 16.8 | 17.4 | |||
| Current expenditures | 13.7 | 13.3 | 13.2 | 13.2 | 12.8 | 13.8 | 13.4 | 13.5 | |||
| Personnel services | 5.2 | 5.2 | 5.1 | 5.0 | 4.3 | … | 4.9 | 5.0 | |||
| Maintenance and operations | 2.0 | 2.1 | 2.2 | 2.4 | 2.4 | … | 2.6 | 2.6 | |||
| Allotments to local government units | 2.4 | 2.4 | 2.1 | 2.1 | 2.2 | … | 2.3 | 2.4 | |||
| Subsidies | 0.2 | 0.5 | 0.4 | 0.6 | 0.6 | … | 0.6 | 0.6 | |||
| Tax expenditure | 0.5 | 0.3 | 0.4 | 0.2 | 0.2 | … | 0.2 | 0.2 | |||
| Interest | 3.3 | 2.9 | 3.0 | 2.3 | 2.6 | 2.7 | 2.7 | 2.6 | |||
| Capital and equity expenditure | 3.1 | 2.6 | 3.4 | 3.0 | 2.3 | 4.3 | 3.3 | 3.3 | |||
| Capital expenditure | 3.1 | 2.4 | 3.2 | 2.9 | 2.3 | 4.6 | 3.3 | 3.3 | |||
| Equity | 0.0 | 0.1 | 0.2 | 0.1 | 0.0 | 0.2 | 0.0 | 0.0 | |||
| Net lending | 0.1 | 0.2 | 0.3 | 0.1 | 0.1 | 0.2 | 0.1 | 0.1 | |||
| Balance | −3.6 | −2.1 | −2.4 | −1.5 | −0.6 | −2J0 | −1.5 | −2.0 | |||
| On the authorities’ presentation 3/ | −3.5 | −2.0 | −2.3 | −1.4 | −0.6 | −2.0 | −1.5 | −2.0 | |||
| Memorandum items: | |||||||||||
| National government | |||||||||||
| Primary balance | −0.2 | 0.8 | 0.6 | 1.4 | 1.9 | 0.7 | 1.2 | 0.5 | |||
| Debt 4/ | 46.2 | 44.9 | 44.2 | 42.7 | 39.7 | … | 38.5 | 36.6 | |||
| (In percent of national government revenues) | 344.3 | 320.9 | 306.0 | 287.9 | 263.4 | … | 252.2 | 238.0 | |||
| Gross financing requirement 5/ | 14.9 | 12.1 | 9.1 | 5.9 | 4.7 | … | 7.1 | 8.5 | |||
| Nonfinancial public sector (NFPS) 6/ | |||||||||||
| Balance | −3.3 | −0.8 | −0.6 | 0.6 | 0.9 | … | 0.0 | −0.5 | |||
| Debt | 54.8 | 55.3 | 53.0 | 51.3 | 47.8 | … | 45.5 | 42.5 | |||
| (In percent of NFPS revenues) | 296.3 | 297.6 | 273.1 | 254.8 | 237.7 | … | 221.4 | 205.0 | |||
| Consolidated public sector balance 7/ | 4.7 | 2.9 | 2.6 | 1.4 | 1.1 | … | 1.7 | 2.2 | |||
Projections include possible gains from tax administrative measures for 2015 and 2016.
Includes other percentage taxes, documentary stamp tax, and noncash collections. Noncash collections are also reflected as tax expenditures under current expenditures.
Includes privatization receipts as revenue and excludes the operations of the Central Bank-Board of Liquidators (CB-BOL).
Consolidated (net of national government debt held by the sinking fund) and excluding contingent/guaranteed debt.
Defined as the deficit, plus amortization of medium- and long-term debt, plus the stock of short-term debt at the end of the last period.
Includes the national government, 14 government-owned enterprises, social security institutions, and local governments. Debt is consolidated (net of intra-nonfinancial public sector holdings of debt). Balance is cash basis.
Includes nonfinancial public sector, government financial institutions, and BSP. Balance is cash basis.
Using the nominal GDP in the authorities’ budget.
Philippines: General Government Operations, 2010–16 1/
(In percent of GDP)
Based on GFSM2001. General government includes the national government, social security institutions, and local governments.
National government only, The expense item related to SSIs and local governments are not separately available and are included in the amount for expense not elsewhere classified.
Philippines: General Government Operations, 2010–16 1/
(In percent of GDP)
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 Proj. | 2016 Proj. | |||
|---|---|---|---|---|---|---|---|---|---|
| Revenue | 16.8 | 17.6 | 18.6 | 18.8 | 19.3 | 19.5 | 19.6 | ||
| Taxes | 12.9 | 13.2 | 14.1 | 14.5 | 14.8 | 14.9 | 15.1 | ||
| Taxes on income, profits, and capital gains | 5.4 | 5.9 | 6.1 | 6.2 | 6.2 | 6.4 | 6.4 | ||
| Taxes on goods and services | 5.5 | 5.8 | 6.2 | 6.6 | 6.7 | 6.7 | 6.8 | ||
| Taxes on international trade and transactions | 0.9 | 0.4 | 0.4 | 0.3 | 0.4 | 0.4 | 0.4 | ||
| Taxes not elsewhere classified | 1.1 | 1.1 | 1.4 | 1.4 | 1.4 | 1.4 | 1.4 | ||
| Social contributions | 1.9 | 1.9 | 2.0 | 2.0 | 2.2 | 2.2 | 2.2 | ||
| Grants | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||
| Other revenue | 2.0 | 2.5 | 2.5 | 2.3 | 2.3 | 2.3 | 2.3 | ||
| Total expenditure | 19.2 | 18.0 | 18.9 | 18.6 | 18.4 | 19.6 | 20.2 | ||
| Expense | 15.6 | 15.1 | 15.3 | 15.3 | 15.1 | 15.7 | 15.8 | ||
| Compensation of employees 2/ | 5.2 | 5.2 | 5.1 | 5.0 | 4.8 | 4.9 | 5.0 | ||
| Purchases/use of goods and services 2/ | 2.0 | 2.1 | 2.2 | 2.4 | 2.4 | 2.6 | 2.6 | ||
| Interest 2/ | 3.0 | 2.6 | 2.6 | 2.5 | 2.2 | 2.4 | 2.2 | ||
| Social benefits | 1.7 | 1.8 | 1.8 | 1.9 | 2.1 | 2.3 | 2.4 | ||
| Expense not elsewhere classified | 3.6 | 3.5 | 3.4 | 3.4 | 3.5 | 3.5 | 3.5 | ||
| Net acquisition of nonfinancial assets | 3.5 | 2.9 | 3.6 | 3.3 | 3.3 | 3.9 | 4.5 | ||
| Net lending/borrowing | −2.4 | −0.4 | −0.3 | 0.2 | 0.9 | −0.1 | −0.6 | ||
| National government | −3.4 | −1.8 | −1.9 | −1.2 | −0.5 | −1.4 | −1.9 | ||
| Local government units | 0.6 | 0.7 | 0.7 | 0.7 | 0.7 | 0.7 | 0.8 | ||
| Social security institutions (SSIs) | 0.5 | 0.7 | 0.9 | 0.7 | 0.7 | 0.5 | 0.5 | ||
| Net acquisition of financial assets | 1.7 | 0.8 | 4.6 | 3.0 | 2.1 | 2.2 | 1.7 | ||
| Net incurrence of liabilities | 4.0 | 1.2 | 4.9 | 2.7 | 1.2 | 2.3 | 2.3 | ||
| Memorandum items: | |||||||||
| National government cash holdings | 3.0 | … | … | … | … | … | … | ||
| Consolidated general government debt | 43.5 | 41.4 | 40.6 | 39.2 | 36.4 | 35.2 | 33.3 | ||
Based on GFSM2001. General government includes the national government, social security institutions, and local governments.
National government only, The expense item related to SSIs and local governments are not separately available and are included in the amount for expense not elsewhere classified.
Philippines: General Government Operations, 2010–16 1/
(In percent of GDP)
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 Proj. | 2016 Proj. | |||
|---|---|---|---|---|---|---|---|---|---|
| Revenue | 16.8 | 17.6 | 18.6 | 18.8 | 19.3 | 19.5 | 19.6 | ||
| Taxes | 12.9 | 13.2 | 14.1 | 14.5 | 14.8 | 14.9 | 15.1 | ||
| Taxes on income, profits, and capital gains | 5.4 | 5.9 | 6.1 | 6.2 | 6.2 | 6.4 | 6.4 | ||
| Taxes on goods and services | 5.5 | 5.8 | 6.2 | 6.6 | 6.7 | 6.7 | 6.8 | ||
| Taxes on international trade and transactions | 0.9 | 0.4 | 0.4 | 0.3 | 0.4 | 0.4 | 0.4 | ||
| Taxes not elsewhere classified | 1.1 | 1.1 | 1.4 | 1.4 | 1.4 | 1.4 | 1.4 | ||
| Social contributions | 1.9 | 1.9 | 2.0 | 2.0 | 2.2 | 2.2 | 2.2 | ||
| Grants | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||
| Other revenue | 2.0 | 2.5 | 2.5 | 2.3 | 2.3 | 2.3 | 2.3 | ||
| Total expenditure | 19.2 | 18.0 | 18.9 | 18.6 | 18.4 | 19.6 | 20.2 | ||
| Expense | 15.6 | 15.1 | 15.3 | 15.3 | 15.1 | 15.7 | 15.8 | ||
| Compensation of employees 2/ | 5.2 | 5.2 | 5.1 | 5.0 | 4.8 | 4.9 | 5.0 | ||
| Purchases/use of goods and services 2/ | 2.0 | 2.1 | 2.2 | 2.4 | 2.4 | 2.6 | 2.6 | ||
| Interest 2/ | 3.0 | 2.6 | 2.6 | 2.5 | 2.2 | 2.4 | 2.2 | ||
| Social benefits | 1.7 | 1.8 | 1.8 | 1.9 | 2.1 | 2.3 | 2.4 | ||
| Expense not elsewhere classified | 3.6 | 3.5 | 3.4 | 3.4 | 3.5 | 3.5 | 3.5 | ||
| Net acquisition of nonfinancial assets | 3.5 | 2.9 | 3.6 | 3.3 | 3.3 | 3.9 | 4.5 | ||
| Net lending/borrowing | −2.4 | −0.4 | −0.3 | 0.2 | 0.9 | −0.1 | −0.6 | ||
| National government | −3.4 | −1.8 | −1.9 | −1.2 | −0.5 | −1.4 | −1.9 | ||
| Local government units | 0.6 | 0.7 | 0.7 | 0.7 | 0.7 | 0.7 | 0.8 | ||
| Social security institutions (SSIs) | 0.5 | 0.7 | 0.9 | 0.7 | 0.7 | 0.5 | 0.5 | ||
| Net acquisition of financial assets | 1.7 | 0.8 | 4.6 | 3.0 | 2.1 | 2.2 | 1.7 | ||
| Net incurrence of liabilities | 4.0 | 1.2 | 4.9 | 2.7 | 1.2 | 2.3 | 2.3 | ||
| Memorandum items: | |||||||||
| National government cash holdings | 3.0 | … | … | … | … | … | … | ||
| Consolidated general government debt | 43.5 | 41.4 | 40.6 | 39.2 | 36.4 | 35.2 | 33.3 | ||
Based on GFSM2001. General government includes the national government, social security institutions, and local governments.
National government only, The expense item related to SSIs and local governments are not separately available and are included in the amount for expense not elsewhere classified.
Philippines: Depository Corporation Survey, 2010–16 1/
(End of period, in billions of pesos, unless otherwise indicated)
It includes the Bangko Sentral ng Pilipinas (BSP), the accounts of the Central Government arising from its holdings of transactions with the International Monetary Fund, and Other Depository Corporations such as universal and commercial banks, thrift banks, rural banks, non-stock savings and loan associations and non-banks with quasi-banking functions.
Philippines: Depository Corporation Survey, 2010–16 1/
(End of period, in billions of pesos, unless otherwise indicated)
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 Proj. | 2016 Proj. | |||
|---|---|---|---|---|---|---|---|---|---|
| Total | |||||||||
| Net foreign assets | 2,865,080 | 3,242,542 | 3,248,543 | 3,575,054 | 3,752,064 | 4,090,631 | 4,439,959 | ||
| Net domestic assets | 2,663,012 | 2,578,913 | 2,979,116 | 4,479,152 | 5,303,883 | 6,028,250 | 6,973,161 | ||
| Net claims on nonfinancial public sector | 1,367,338 | 1,520,559 | 1,298,189 | 1,287,632 | 1,470,598 | 1,593,362 | 1,814,788 | ||
| Claims on private sector | 2,563,097 | 3,093,882 | 3,528,922 | 4,137,658 | 4,949,747 | 5,673,829 | 6,521,516 | ||
| Net claims on other financial corporations | −410,931 | −894,944 | −767,601 | 178,728 | 274,276 | 321,735 | 382,166 | ||
| Capital accounts | 1,080,747 | 1,258,757 | 1,113,606 | 1,203,888 | 1,462,499 | 1,642,237 | 1,839,653 | ||
| Other items (net) | 124,255 | 118,172 | 33,212 | 79,022 | 71,760 | 81,560 | 94,345 | ||
| Broad money | 5,528,092 | 5,821,454 | 6,227,664 | 8,054,206 | 9,055,947 | 10,118,882 | 11,413,130 | ||
| National currency | 4,462,086 | 4,801,830 | 5,227,220 | 6,915,929 | 7,698,511 | 8,602,117 | 9,702,365 | ||
| Foreign currency | 1,066,007 | 1,019,625 | 1,000,443 | 1,138,277 | 1,357,436 | 1,516,764 | 1,710,765 | ||
| Bangko Sentral ng Pilipinas | |||||||||
| Net foreign assets | 2,657,283 | 3,233,794 | 3,382,382 | 3,643,852 | 3,514,334 | 3,593,027 | 3,695,597 | ||
| Net domestic assets | −1,503,158 | −1,908,654 | −1,886,211 | −1,712,821 | −1,189,662 | −901,068 | −550,717 | ||
| Claims on private sector | 1 | 1 | 1 | 1 | 1 | 1 | 1 | ||
| Net claims on financial corporations | −1,417,254 | −1,846,634 | −1,810,951 | −1,576,264 | −1,072,410 | −812,260 | −496,439 | ||
| Capital accounts | 233,202 | 287,252 | 1,760 | 3,821 | 5,346 | 4,049 | 2,475 | ||
| Other items (net) | −14,953 | −12,445 | −13,655 | −17,763 | −4,837 | −3,664 | −2,239 | ||
| Base money | 1,120,546 | 1,323,000 | 1,475,633 | 1,926,202 | 2,323,905 | 2,691,192 | 3,144,113 | ||
| Currency in circulation | 601,275 | 648,911 | 692,657 | 797,452 | 929,502 | 1,076,407 | 1,257,564 | ||
| Other depository corporations liabilities | 518,755 | 673,511 | 782,647 | 1,128,302 | 1,386,745 | 1,605,916 | 1,876,188 | ||
| Other liquid liabilities | 33,579 | 2,139 | 20,538 | 4,829 | 757 | 757 | 767 | ||
| Other Depository Corporations | |||||||||
| Net foreign assets | 207,797 | 8,748 | −133,834 | −68,798 | 237,731 | 497,605 | 744,372 | ||
| Net domestic assets | 4,807,774 | 5,295,056 | 5,781,849 | 7,477,386 | 8,095,638 | 8,813,665 | 9,757,589 | ||
| Net claims on nonfinancial public sector | 1,205,078 | 1,282,883 | 1,358,035 | 1,402,605 | 1,577,668 | 1,674,456 | 1,864,347 | ||
| Claims on private sector | 2,663,096 | 3,093,881 | 3,528,921 | 4,137,658 | 4,949,746 | 5,673,829 | 6,521,515 | ||
| Net claims on financial corporations | 1,642,090 | 1,751,828 | 1,969,705 | 3,045,147 | 2,955,906 | 3,025,672 | 3,116,800 | ||
| Capital accounts | 847,546 | 971,505 | 1,111,846 | 1,200,066 | 1.457,153 | 1,638,188 | 1,837,178 | ||
| Other items (net) | 145,056 | 137,969 | 37,034 | 92,043 | 69,471 | 77,896 | 92,105 | ||
| Liquid liabilities | 5,015,571 | 5,303,804 | 5,648,015 | 7,408,588 | 8,333,369 | 9,311,270 | 10,501,961 | ||
| Memorandum Items | |||||||||
| Broad Money (percent change) | 10.9 | 5.3 | 7.0 | 29.3 | 12.4 | 11.7 | 12.8 | ||
| Claims on private sector (percent change) | 13.8 | 16.2 | 14.1 | 17.2 | 19.6 | 14.6 | 14.9 | ||
| Broad Money (percent of GDP) | 61.4 | 60.0 | 59.0 | 69.8 | 71.6 | 74.2 | 75.9 | ||
| Claims on private sector (percent of GDP) | 29.6 | 31.9 | 33.4 | 35.8 | 39.2 | 41.6 | 43.4 | ||
| Nominal GDP | 9,003,479 | 9,708,334 | 10,561,086 | 11,542,285 | 12,642,736 | 13,644,813 | 15,038,870 | ||
It includes the Bangko Sentral ng Pilipinas (BSP), the accounts of the Central Government arising from its holdings of transactions with the International Monetary Fund, and Other Depository Corporations such as universal and commercial banks, thrift banks, rural banks, non-stock savings and loan associations and non-banks with quasi-banking functions.
Philippines: Depository Corporation Survey, 2010–16 1/
(End of period, in billions of pesos, unless otherwise indicated)
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 Proj. | 2016 Proj. | |||
|---|---|---|---|---|---|---|---|---|---|
| Total | |||||||||
| Net foreign assets | 2,865,080 | 3,242,542 | 3,248,543 | 3,575,054 | 3,752,064 | 4,090,631 | 4,439,959 | ||
| Net domestic assets | 2,663,012 | 2,578,913 | 2,979,116 | 4,479,152 | 5,303,883 | 6,028,250 | 6,973,161 | ||
| Net claims on nonfinancial public sector | 1,367,338 | 1,520,559 | 1,298,189 | 1,287,632 | 1,470,598 | 1,593,362 | 1,814,788 | ||
| Claims on private sector | 2,563,097 | 3,093,882 | 3,528,922 | 4,137,658 | 4,949,747 | 5,673,829 | 6,521,516 | ||
| Net claims on other financial corporations | −410,931 | −894,944 | −767,601 | 178,728 | 274,276 | 321,735 | 382,166 | ||
| Capital accounts | 1,080,747 | 1,258,757 | 1,113,606 | 1,203,888 | 1,462,499 | 1,642,237 | 1,839,653 | ||
| Other items (net) | 124,255 | 118,172 | 33,212 | 79,022 | 71,760 | 81,560 | 94,345 | ||
| Broad money | 5,528,092 | 5,821,454 | 6,227,664 | 8,054,206 | 9,055,947 | 10,118,882 | 11,413,130 | ||
| National currency | 4,462,086 | 4,801,830 | 5,227,220 | 6,915,929 | 7,698,511 | 8,602,117 | 9,702,365 | ||
| Foreign currency | 1,066,007 | 1,019,625 | 1,000,443 | 1,138,277 | 1,357,436 | 1,516,764 | 1,710,765 | ||
| Bangko Sentral ng Pilipinas | |||||||||
| Net foreign assets | 2,657,283 | 3,233,794 | 3,382,382 | 3,643,852 | 3,514,334 | 3,593,027 | 3,695,597 | ||
| Net domestic assets | −1,503,158 | −1,908,654 | −1,886,211 | −1,712,821 | −1,189,662 | −901,068 | −550,717 | ||
| Claims on private sector | 1 | 1 | 1 | 1 | 1 | 1 | 1 | ||
| Net claims on financial corporations | −1,417,254 | −1,846,634 | −1,810,951 | −1,576,264 | −1,072,410 | −812,260 | −496,439 | ||
| Capital accounts | 233,202 | 287,252 | 1,760 | 3,821 | 5,346 | 4,049 | 2,475 | ||
| Other items (net) | −14,953 | −12,445 | −13,655 | −17,763 | −4,837 | −3,664 | −2,239 | ||
| Base money | 1,120,546 | 1,323,000 | 1,475,633 | 1,926,202 | 2,323,905 | 2,691,192 | 3,144,113 | ||
| Currency in circulation | 601,275 | 648,911 | 692,657 | 797,452 | 929,502 | 1,076,407 | 1,257,564 | ||
| Other depository corporations liabilities | 518,755 | 673,511 | 782,647 | 1,128,302 | 1,386,745 | 1,605,916 | 1,876,188 | ||
| Other liquid liabilities | 33,579 | 2,139 | 20,538 | 4,829 | 757 | 757 | 767 | ||
| Other Depository Corporations | |||||||||
| Net foreign assets | 207,797 | 8,748 | −133,834 | −68,798 | 237,731 | 497,605 | 744,372 | ||
| Net domestic assets | 4,807,774 | 5,295,056 | 5,781,849 | 7,477,386 | 8,095,638 | 8,813,665 | 9,757,589 | ||
| Net claims on nonfinancial public sector | 1,205,078 | 1,282,883 | 1,358,035 | 1,402,605 | 1,577,668 | 1,674,456 | 1,864,347 | ||
| Claims on private sector | 2,663,096 | 3,093,881 | 3,528,921 | 4,137,658 | 4,949,746 | 5,673,829 | 6,521,515 | ||
| Net claims on financial corporations | 1,642,090 | 1,751,828 | 1,969,705 | 3,045,147 | 2,955,906 | 3,025,672 | 3,116,800 | ||
| Capital accounts | 847,546 | 971,505 | 1,111,846 | 1,200,066 | 1.457,153 | 1,638,188 | 1,837,178 | ||
| Other items (net) | 145,056 | 137,969 | 37,034 | 92,043 | 69,471 | 77,896 | 92,105 | ||
| Liquid liabilities | 5,015,571 | 5,303,804 | 5,648,015 | 7,408,588 | 8,333,369 | 9,311,270 | 10,501,961 | ||
| Memorandum Items | |||||||||
| Broad Money (percent change) | 10.9 | 5.3 | 7.0 | 29.3 | 12.4 | 11.7 | 12.8 | ||
| Claims on private sector (percent change) | 13.8 | 16.2 | 14.1 | 17.2 | 19.6 | 14.6 | 14.9 | ||
| Broad Money (percent of GDP) | 61.4 | 60.0 | 59.0 | 69.8 | 71.6 | 74.2 | 75.9 | ||
| Claims on private sector (percent of GDP) | 29.6 | 31.9 | 33.4 | 35.8 | 39.2 | 41.6 | 43.4 | ||
| Nominal GDP | 9,003,479 | 9,708,334 | 10,561,086 | 11,542,285 | 12,642,736 | 13,644,813 | 15,038,870 | ||
It includes the Bangko Sentral ng Pilipinas (BSP), the accounts of the Central Government arising from its holdings of transactions with the International Monetary Fund, and Other Depository Corporations such as universal and commercial banks, thrift banks, rural banks, non-stock savings and loan associations and non-banks with quasi-banking functions.
Philippines: Balance of Payments, 2010–2016 1/
(In billions of U.S. dollars)
In BPM6.
An increase in either assets or liabilities is always positive and a decrease is always negative. Net investment is assets minus liabilities. A negative financial account balance means that the change in liabilities is greater than the change in assets, while a positive financial account balance means that the change in assets is greater than the change in liabilities.
As a percent of short-term debt.
In percent of goods and nonfactor services exports.
Current account deficit, plus amortization on medium- and long-term debt, plus short-term debt at the end of the previous period.
Philippines: Balance of Payments, 2010–2016 1/
(In billions of U.S. dollars)
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | ||||
|---|---|---|---|---|---|---|---|---|---|---|
| Staff proj. | ||||||||||
| Current account balance | 7.2 | 5.6 | 6.9 | 11.4 | 12.7 | 15.3 | 15.2 | |||
| Trade balance of goods and services | −11.1 | −13.9 | −12.7 | −10.6 | −11.0 | −9.4 | −10.6 | |||
| Goods | −16.9 | −20.4 | −18.9 | −17.7 | −15.9 | −15.2 | −17.1 | |||
| Exports, f.o.b. | 36.8 | 38.3 | 46.4 | 44.5 | 47.8 | 49.4 | 52.1 | |||
| Imports, f.o.b. | 53.6 | 58.7 | 65.3 | 62.2 | 63.6 | 64.6 | 69.2 | |||
| Services | 5.8 | 6.6 | 6.2 | 7.0 | 4.9 | 5.8 | 6.5 | |||
| Receipts | 17.8 | 18.9 | 20.4 | 23.3 | 24.8 | 27.2 | 29.8 | |||
| Payments | 12.0 | 12.3 | 14.3 | 16.3 | 20.0 | 21.4 | 23.3 | |||
| Primary income, net | 0.7 | 0.9 | 0.2 | 1.0 | 1.1 | 0.9 | 0.8 | |||
| Receipts, of which: | 6.7 | 7.6 | 8.3 | 8.4 | 9.0 | 9.6 | 10.1 | |||
| Resident workers abroad | 5.1 | 5.9 | 6.5 | 7.0 | 7.5 | 7.9 | 8.4 | |||
| Payments | 6.0 | 6.7 | 8.1 | 7.4 | 8.0 | 8.6 | 9.3 | |||
| Interest payments | 2.7 | 2.9 | 3.1 | 2.8 | 2.6 | 3.4 | 3.3 | |||
| Secondary income, net | 17.6 | 18.6 | 19.5 | 21.1 | 22.6 | 23.8 | 25.0 | |||
| Receipts, of which: | 18.0 | 19.0 | 20.1 | 21.7 | 23.2 | 24.5 | 25.9 | |||
| Nonresident workers remittances | 16.2 | 17.1 | 18.0 | 19.3 | 20.4 | 21.9 | 23.1 | |||
| Payments | 0.4 | 0.5 | 0.6 | 0.6 | 0.7 | 0.8 | 0.9 | |||
| Capital account | 0.1 | 0.2 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | |||
| Financial account 2/ | −11.5 | −5.3 | −6.7 | 2.2 | 10.1 | 7.1 | 6.1 | |||
| Direct investment | 1.6 | 0.3 | 1.0 | −0.1 | 0.8 | 0.0 | −0.7 | |||
| Portfolio investment | −4.9 | −3.7 | −3.2 | −1.0 | 2.5 | 0.7 | 0.6 | |||
| Equity | −0.8 | −1.0 | −1.7 | 0.1 | −1.0 | −1.2 | −1.2 | |||
| Debt | −4.1 | −2.6 | −1.5 | −1.1 | 3.4 | 1.8 | 1.7 | |||
| Financial derivatives | 0.2 | −1.0 | 0.0 | −0.1 | 0.0 | 0.0 | 0.0 | |||
| Other investment, of which: | −8.4 | −1.0 | −4.5 | 3.4 | 6.9 | 6.5 | 6.3 | |||
| Currency and deposits | −0.2 | 2.3 | −1.5 | 1.4 | 4.5 | 3.8 | 3.2 | |||
| Loans | −7.0 | −3.6 | −2.3 | 1.4 | 2.0 | 1.9 | 1.9 | |||
| Errors and omissions | −3.5 | 0.3 | −4.6 | −4.2 | −5.5 | −5.2 | −4.9 | |||
| Overall balance | 15.2 | 11.4 | 9.2 | 5.1 | −2.9 | 3.1 | 4.3 | |||
| Memorandum items: | ||||||||||
| Current account/GDP | 3.6 | 2.5 | 2.8 | 4.2 | 4.4 | 5.0 | 4.5 | |||
| Short-term debt (original maturity) | 10.5 | 12.1 | 16.5 | 16.9 | 16.2 | 16.5 | 16.8 | |||
| Short-term debt (residual maturity) | 15.5 | 15.6 | 21.1 | 20.5 | 19.6 | 22.6 | 23.0 | |||
| Gross reserves | 62.4 | 75.3 | 83.8 | 83.2 | 79.5 | 81.7 | 84.5 | |||
| (in percent of st. debt by res. maturity) 3/ | 403.3 | 482.5 | 397.9 | 405.5 | 406.5 | 361.2 | 366.8 | |||
| External debt (in billions) | 73.6 | 75.6 | 79.9 | 78.5 | 77.7 | 78.0 | 78.4 | |||
| (in percent of GDP) | 36.9 | 33.7 | 32.0 | 28.9 | 27.3 | 25.6 | 23.1 | |||
| Debt service ratio 4/ | 13.6 | 13.6 | 9.9 | 11.1 | 8.7 | 7.8 | 10.6 | |||
| Export value (percent change) | 26.2 | 4.1 | 21.2 | −4.0 | 7.3 | 3.5 | 5.5 | |||
| Import value (percent change) | 24.7 | 9.5 | 11.3 | −4.8 | 2.3 | 1.6 | 7.1 | |||
| Gross external financing needs 5/ | 4.1 | 9.8 | 8.7 | 9.7 | 7.9 | 6.8 | 7.4 | |||
| Cash Remittances (percent change) | 8.2 | 7.2 | 6.3 | 7.4 | 5.9 | 5.6 | 5.6 | |||
In BPM6.
An increase in either assets or liabilities is always positive and a decrease is always negative. Net investment is assets minus liabilities. A negative financial account balance means that the change in liabilities is greater than the change in assets, while a positive financial account balance means that the change in assets is greater than the change in liabilities.
As a percent of short-term debt.
In percent of goods and nonfactor services exports.
Current account deficit, plus amortization on medium- and long-term debt, plus short-term debt at the end of the previous period.