2011年-世界发展银行全球_Philippines_Quarterly_Update_September_2011___Solid_Macroeconomic_Fundamentals_Cushion_External_Turmoil_40页_9mb

Summary of the Philippines Quarterly Economic Update - September 2011

Core Content

This document presents the Philippines Quarterly Economic Update for September 2011, highlighting the country's solid macroeconomic fundamentals that have helped cushion it from external economic turmoil. It covers recent economic and policy developments, key economic indicators, and provides forecasts for the coming quarters.

Main Points

Economic Growth and Components

• GDP growth slowed to 3.4% year-on-year in Q2 2011, the lowest since Q4 2009.
• Private consumption remained robust, growing at 5.4% in the first half of 2011 and contributing 3.6 percentage points to GDP growth in Q2.
• Net exports subtracted 2.3 percentage points from GDP growth due to declining demand for Philippine exports, especially electronics, and supply chain disruptions in Japan.
• Services sector was the main driver of growth, contributing 5% to GDP and 2.8 percentage points in Q2, with financial and government services showing the highest growth.
• Agriculture expanded for the third consecutive quarter, aided by favorable weather conditions.
• Construction and industry both contracted, with public construction dropping by 51.2% year-on-year and industry declining by 0.6% in Q2.

Employment and Poverty

• Job creation increased by 20% year-on-year, with the services sector being the main source.
• Formal employment rose to 56.3% of total employment in July, while underemployment remained high at 19.1%.
• Poverty and hunger rates declined in June, with self-rated poverty falling to 49% and hunger incidence to 15.1%.
• Median poverty threshold in Metro Manila dropped by over 30% in real terms, suggesting a potential overestimation of poverty reduction in the area.

Balance of Payments and External Debt

• The balance of payments showed a surplus of US$9.0 billion through August, three times the level in the same period in 2010.
• Remittances grew by 6.3% year-on-year to US$11.4 billion in July, but declined in real Peso terms by 3.5%.
• FDI inflows remained low compared to Asian neighbors, averaging 1-2% of GDP.
• Foreign exchange reserves reached record highs of US$75.6 billion in August, providing ample cover for short-term debt and imports.

Financial Markets

• The PSEi showed resilience during the US debt ceiling crisis, recovering faster than the DJIA.
• Sovereign bond spreads narrowed in July but increased by 40 basis points in August due to global pessimism.
• The yield curve steepened in August, driven by increased liquidity and lower short-end rates.

Inflation and Monetary Policy

• Headline inflation eased to a four-month low of 4.8% in August, within the BSP target range.
• Food and FLW inflation dropped due to increased rice supply and lower oil prices, while transport inflation rose.
• The BSP kept policy rates unchanged in June and July, but raised reserve requirements to return to pre-crisis levels.
• Liquidity growth returned to pre-crisis levels, posing an upside risk to inflation.

Fiscal Policy

• The fiscal deficit improved to 0.5% of GDP in January–July 2011, down from 2.6% a year earlier.
• Capital outlays declined by 44% year-on-year due to delayed project implementation and payment schedules.
• The 2012 budget is projected at PhP1.816 trillion, 10.4% higher than 2011, with increased spending on social services and human capital.
• IRA to local governments was reduced due to lower revenue collections in 2009.

Key Information

• Economic Growth Forecast: Revised down to 4.5% for 2011 and 5.0% for 2012 due to weaker global growth and domestic investment slowdown.
• External Shocks: The Philippines has been less affected by global downturns due to strong fundamentals, including a current account surplus and robust remittances.
• Policy Recommendations: Accelerate public spending to improve infrastructure and human capital, enhance tax administration, and boost revenue collection to support the budget.
• Risk Factors: Downside risks include global demand uncertainty, continued slowdown in domestic investment, and potential disruptions in remittance flows.

Special Focus

• External Spillovers: The Philippines' economy is less vulnerable to external shocks due to its strong current account surplus and high remittance inflows.
• 2012 Budget: Emphasizes higher spending on human capital, with increased allocations to education, health, and social welfare, while aiming for higher revenue collection.

Conclusion

The Philippines' macroeconomic stability has allowed it to withstand external economic pressures. While growth remains below target, the resilience of the services sector, strong remittances, and improved fiscal position provide a solid foundation for future development. The key challenge for policymakers is to ensure sustainable growth by addressing infrastructure gaps and improving public spending efficiency.