The Philippine Economy
World's 38th Freest Economy
A survey conducted by Canada-based Fraser Institute (FI) has tagged the Philippines, along with six other countries, as the world's 38th "freest economy", a term referring to the country's practice of free trade. The 2002 "Economic Freedom of the World" (EFW) survey gauged 123 countries' level of economic freedom or liberties enjoyed by foreigners and citizens to engage in trade or business. Among the factors measured were each country's observance of free trade, rule of law, property rights, freedom to trade and access to sound money.
The Philippines was ranked at 38th along with France, South Korea, Botswana and two other countries. On top of the list were Hong Kong, Singapore and the United States in that order. (Source: Businessworld)
40th Most Competitive Economy
In its 2002 World Competitiveness Year Book, Swiss agency Institute for Management Development (IMD) ranked the Philippines as the 40th most competitive economy in the world. The Philippines was ranked ahead of Indonesia but behind other East Asian countries such as Singapore, Hong Kong, Taiwan, Malaysia, South Korea, Japan, China and Thailand.
In a separate report also in 2002, the Philippines was ranked as 61st among 80 countries in the global growth competitiveness ranking of the World Economic Forum (WEF), which is a project of the US-based Harvard Business School.
The local partner of WEF is the Makati Business Club (MBC) while the local partner of IMD is the Makati-based Asian Institute of Management (AIM). These two organizations supplied most of the data used in the country's ranking based on the results of surveys conducted among businessmen and investors.
77th in Standard of Living
The United Nations Development Program (UNDP) has ranked the Philippines 77th among 173 countries in terms of human development index (HDI), a gauge of standard of living. The Philippines got a score of 0.754 in 2002, slightly up from 0.749 that it received in 2001. Norway topped the list with an HDI of 0.942 and was followed by Sweden, with 0.941 and Canada, 0.940. Singapore bested all East Asian countries with an HDI of 0.885. (Source: Businessworld)
Philippine GDP Expands 4.6 Percent in 2002
The Philippine gross domestic product (GDP) grew 4.6 percent YoY in 2002. The gross national product (GNP) – the sum of GDP and income from overseas, posted an even more impressive annual growth rate of 5.2 percent in 2002, powered by a 15.5 percent increase in net factor income from abroad (NFIA).
The population grew by 2.12 percent from 80.08 million in December 2001 to 81.78 million in December 2002, per capita GDP increased by 2.4 percent while per capita GNP moved up by 3 percent. The per capita PCE also increased by 1.7 percent YoY.
For 2002, GNP was estimated at P4.233 trillion (approx. US$79 billion) at current prices while GDP was valued at P3.977 trillion (approx. US$74 billion). Total services were valued at P2.127 trillion (US$40 billion) while total industrial output was placed at P1.258 trillion (US$23.5 billion). Combined output of agriculture, fishery and forestry was estimated at P592 billion (US$11 billion).
Real Growth, 1.3 Percent in 2001
According to the National Economic Development Authority (NEDA), the three major segments of the Philippine economy – agriculture, industry and services – posted an average growth of 3.4 percent in 2001. However, real per capita income rose by only 1.3 percent as the Philippine population increased by about 2.1 percent.
GDP: P3.6 Trillion
In 2001 prices, the gross domestic product (GDP) amounted to P3.643 while the gross national product (GNP) reached P3.860 trillion. GNP is the sum of the GDP and earnings from abroad such as dollar remittances by overseas Filipino workers and income by Philippine companies in other countries. GDP is the total value of products and services produced in the country in a given year.
Personal Spending: P2.56 Trillion
Total output of agriculture, fishery and forestry sectors grossed P554.4 billion while industrial production amounted to P1.149 trillion. All services for the year were valued at P1.939 trillion. Total personal spending grossed P2.561 trillion while government expenses amounted to P444.5 billion.
Average Filipino Spent P33,590 in 2002
The average Filipino spent around P33,590 (US$630) at 2002 value, higher by 4.9 percent than P32,031 in 2001 (US$600). At constant value, the personal consumption expenditure (PCE) per capita grew by only 1.7 percent YoY in 2002. Constant value is based on 1985 prices and is not supposed to reflect inflationary trends. At current value, the PCE per capita accounted for around 65 percent of the GNP per capita estimated at P51,758 (US$977) and around 69 percent of the GDP per capita estimated at P48,635 (US$918) in 2002.
Per Capita Income: P45,490
Per capita income was valued at P45,490 while per capita GNP was placed at P48,205. The average Filipino spent P31,983 last year.
Budget Deficit Reaches P212.7 Billion in 2002
The country's budget deficit reached an all-time high of P212.7 billion, representing about 5.3 percent of the gross domestic product (GDP) in 2002. In 2001, the national government incurred a budget gap of P147 billion or only 4 percent of the GDP. At current prices, the country's GDP is estimated at P3.6 to P3.8 trillion (around US$72 billion).
Data from the Bureau of Treasury show that government expenditures reached P778.7 billion while revenue collections amounted to only P566 billion in 2002.
In particular, the Bureau of Internal Revenue (BIR), the government's main tax collection arm, missed its original target by P53.4 billion and collected only PP393.6 billion while the Bureau of Customs, which is in charge of tariff and import duties, missed its target by P18.9 billion and hauled in only P96.25 billion in 2002.
To fund the deficit, the government borrowed a total of PhP264.176 billion from domestic and foreign sources for the year. This was higher than the PhP111.807 billion in borrowings the government programmed for 2002.
For 2003, the government set the budget deficit ceiling at P147 billion or around 4.7 percent of the GDP.
Four Filipino Billionaires
While Filipinos had a per capita income of less than US$1,000, four of them were listed among the world's 497 billionaires (in US dollars) in 2001. Ironically, Finland and Austria, two European countries where per capita income exceeded US$24,000, had no representative in the billionaires' list.
Lucio Tan, Richest Filipino
In its latest list of world's billionaires, US-based Forbes Magazine identified the four Filipino billionaires as Lucio Tan, with a net worth of US$1.7 billion; Henry Sy, US$1.5 billion; George Ty, US$1.1 billion; and Jaime Augusto Zobel de Ayala and family, US$1 billion. The combined wealth of these Filipino billionaires amounted to about US$5.3 billion or almost 7 percent of the country's GDP of US$75.2 billion in 2001. The first three billionaires wer