Growth has been robust in the past five years, registering an average 6.2 percent from 2010-2015, significantly higher than average 4.5 percent annual growth in 2000-2009.
A new administration entered office on June 30, at a time when the economy grew at the fastest pace among its East Asian peers. The Philippine economy grew at an annual rate of 6.9 percent in the first half of 2016, up from 5.5 percent during the same period in 2015, exceeding growth of China, Malaysia, Thailand and Vietnam.
On the production side, the services and industry sectors remained the main engines of growth, while agriculture further weakened due to the lingering effects of El Niño.
On the demand side, growth was driven by robust private consumption and capital formation. This was further supported by more than 10 percent expansion in public spending in the first half of 2016. Net exports, however, caused a drag on growth due to weak external demand.
Growth in real household income, partly due to effective social protection programs, is gradually improving the welfare of the poor. Recent estimates suggest that extreme poverty in the Philippines, measured by the international poverty line of 1.9 dollars a day (2011 purchasing power parity), decreased from 10.6 percent in 2012 to 8.4 percent in 2015.
Household income in real terms reported continuous growth. However, natural calamities including the highest number of typhoons ever witnessed during the period of 2013-2015 have muted some of welfare gains. The government’s social protection programs, in particular the Pantawid Pamilya conditional cash transfer program, successfully buffered some impacts of the shocks.
The poorer segment of the population reported faster growth in household income than the average figure, showing that income inequality is easing downward.
The new administration has reassured businesses and investors by continuing existing macroeconomic policies while reforming the tax collection system. Now there is a need to institutionalize reforms and clearly assess what remains necessary to fulfil the economic reform agenda.
The new administration’s 10-point socio-economic agenda emphasizes equitable tax reform, enhanced public spending, greater transparency and accountability, improved ease of doing business, and continued investment in education, skills, health and social assistance to the poor.
Source: http://www.worldbank.org/en/country/philippines/overview
World Bank - PH is one of the most dynamic economies in East Asia
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