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P HIL IP P IN E E MBA S S Y
U P DA T E S
Issue 01-2010
1 5 J an u a ry 2 0 1 0
ISSUE FOCUS: THE PHILIPPINE ECONOMY
Key Statistics
SOUND POLICIES AND STRINGENT REFORMS: KEY TO
THE PHILIPPINE ECONOMY’S RESILIENCE AMID CRISIS
GNP: 3.5% (3rd Qtr 2009)
GDP: 0.8% (3rd Qtr 2009)
Projected GDP Growth Rate:
2009: 1.4% (World Bank)
2010: 3.1% (World Bank)
3.7% (The Economist)
Exports: US$3.693 Bn (Nov.
2009)
Imports: US$3.671 Bn (Aug.
2009)
Trade
Balance:
million (May 2009)
US$529
Philippine reforms have generated 34 consecutive quarters of growth, the fastest growth in 30 years,
creating 8 million jobs, and allowing the country to maintain the lowest inflation in a generation.
Balance of Payments (BOP):
US$506 million (July 2009)
Interest
2009)
Rate:
4.1%
(Oct.
Peso per US$: Php46.42 (Dec.
2009)
Unemployment
(July 2009)
Population:
(Aug. 2007)
Rate:
88.57
7.6%
million
Projected Population: 92.2
million (2009)
Simple Literacy Rate: 93.4%
(2003)
“A
midst
the global economic
downturn which stemmed from
the spiral of the US economy in early 2008, the
Philippines’ quick recovery reflects fully the resilience of the Philippine domestic economy resulting from the stringent reform program of President Gloria Macapagal Arroyo,” a recent World
Bank report said on the Philippine economy.
President Arroyo announced that the peso
has remained stable and strong even amidst the
global financial downturn. “The growth of remittances from our overseas workers still defy expectations, a good indicator and reflection of the
stability of our economy,” the President
stressed.
Staving off adverse effects to the Philippine
economy during the tumultuous economic crisis
of 2009, was primarily due to the domestic nature of the Philippine economy -- the limited
exposure to foreign demand, the conservative
nature of banks, and prompt and forceful fiscal
and monetary stimuli.
The strong and timely fiscal stimulus undertaken by the Government helped ease the adverse effects of these challenges. Real GDP
growth is projected to rise from 1.4% in 2009 to
3.1% in 2010, even though, the World Bank
predicts, the pace of expansion will be lower
than before the crisis.
Exports of Philippines products have also
started to increase in November 2009, growing by
5.1 percent year-on-year at US$3.7 billion, according
to preliminary reports of the National Statistics Office. The US remained as the Philippines’ biggest
export market in November 2009 with a 17.7 percent share in total merchandise exports for the
month.
Last year posed a number of difficult challenges
to the Philippine economy, i.e., an impending rice
shortage and catastrophic natural calamities
(Typhoons Ondoy and Pepeng).
Philippine reforms have generated 34 consecutive quarters of growth, the fastest growth in 30
years, created 8 million jobs, and allowed the country to maintain the lowest inflation in a generation.
Even the Bertelsmann Foundation based in
Germany recognized, in its Bertelsmann Transformation Index (BTI) 2010 Report, the Philippines’ continuous economic growth and observed that President Arroyo has adeptly managed the rise and fall in
prices for rice and oil and has diligently prepared for
the onslaught of the global economic crisis.
“The country, even though considered as an
emerging country, is ever prepared to withstand the
challenges of global downturn,” President Arroyo
declared during a Congress of the Philippine Government (Kongreso ng Pamahalaan) last 16 November
2009. 
Page 2
UP D A TE S
‘DEVELOPED COUNTRIES NEED TO LEAD IN REDUCING
EMISSIONS’ – PRESIDENT ARROYO
Speaking at the United Nations Climate Change Conference in Copenhagen last December 17, 2009, President
Arroyo emphasized the need to
find a way to meet the harsh
impacts of climate change. The
Philippines has been at the
forefront in urging industrialized
nations to commit to substantial reductions in greenhouse
gas emissions.
The President discussed the
vulnerability of the Philippines
to the effects of climate change
as manifested by the destruction brought about by two typhoons in late 2009. In addition, the President also said
that global warming has affected the country’s agriculture,
fishing stocks and forests.
President Arroyo also highlighted the need to establish a
robust financial mechanism to
address the cost of adaptation
for developing countries and for
development and transfer of
technologies.
While in Denmark, the President was able to secure $310
million worth of programs and
projects. A Clean Technology
Ambassador Willy C. Gaa
FROM THE CORNER OF
BATAAN AND MASSACHUSETTS
The Philippines, one of very
few economies that escaped recession, continued to post positive
GDP growth in the third quarter of
2009. Official economic performance of the Philippines in 2009
will be released in February.
The global economic crisis
continued to define the past year.
The crisis that started in financial
markets hit the developing world
where it is most painful, taking
away jobs and pushing families to
further poverty.
The Philippine economy demonstrated great resiliency and did
not fall into recession. Posting
Fund of $250 million from the
Asian
Development
Bank
(ADB) and the World Bank will
help the Philippines mitigate
the impact of climate change.
The grant will leverage about
$2.75 billion of investments
needed to reduce greenhouse
gas emissions and fast track
the implementation of other
projects.
This is in recognition of the
Philippines’ leadership in tackling the issue of climate
change. A leading country in
terms of renewable energy, the
country uses renewable energy
applications in 43% of total
primary energy supply.
The Global Environment
Facility (GEF) also awarded
$50 million to the Philippine
Government, while $10 million
to support local water utilities
came from the international
investment fund of Denmark.
While the world average per
capita carbon dioxide equivalent emission is six tons, the
Philippines’ carbon footprint is
only 1.6 tons, well below the
ideal average of three tons.
In October 2009, the President signed the Climate
Change Act of 2009, which
aims to mainstream climate
change into policy formulation,
development planning, and
poverty reduction programs. 
uninterrupted growth for more
than thirty quarters since 2001,
the Philippines enjoyed the confidence of the international business community and upgrades
from credit rating agencies.
The sound economic policies
implemented by the Philippine
government, while difficult and
largely unpopular, prepared the
economy to withstand serious
external shocks.
Philippine unemployment rate
remained in the single-digit figure.
The Philippine Central Bank also
reported that Philippine banks’
lending went up 6.6% in November
2009 from November 2008.
Bangko Sentral ng Pilipinas
(Central Bank) Governor Amando
Tetangco Jr. said that, “With lending activity gaining momentum,
prospects for a self-sustainable
economic recovery are improving.”
The United States remained
the Philippines’ top export destination in November 2009 generating
$654.17 million in revenue, from
$608.74 million in November
2008.
The performance of the economy is remarkable given that in
September and October 2009, two
typhoons hit the Philippines and
the impact to the economy was
valued at $4 billion or 2.7% of
GDP.
Why has the Philippines weathered the global crisis? We took our
economic medicine years ago
through fundamental economic
reforms. Our fiscal stimulus program – the “Philippine Economic
Resiliency Plan” – allocated almost $7.0 billion for high-impact
projects. For instance, our investments in infrastructure expanded
by 11.7 percent, from 1.0 percent
in 2008.
The fiscal stimulus program
will continue our unprecedented
investments in the infrastructures
we need to enhance our competitiveness, expand social protection
programs, and ensure sustainable
growth.
Another big boost to the Philippine economy is the flow of remittances from Overseas Filipinos
(OF). As of November 2009, remittances amounted to $US15.8
billion, posting the highest year-onyear expansion since October
2008 at 11.3 percent.
The Philippines remains as
one of the best bargains in Asia
and continues to pursue opportunities for productive partnerships
based on common interests and
common goals. 
President Gloria Macapagal Arroyo
delivers her statement during the
high level segment of COP and
CMP National statement
intergovernmental and nongovernmental organization on
behalf of their constituents at the
B e l l a C e nt e r C o p e nh ag e n
Denmark during the UN Climate
Change Conference. op.gov.ph
“The best buffer we have to
external vulnerability is our
own
domestic
internal
strength.”
President Gloria Macapagal
Arroyo
“The Philippine government
has pursued a series of
structural reforms to improve
the
entrepreneurial
environment and develop a
stronger private sector that
generates more dynamic job
growth…some fiscal reforms
have been established.”
2010 Index of Economic
Freedom
The Heritage Foundation
“The Philippines has the
lowest macro-economic risk.”
Credit Suisse
Office of the Ambassador
Embassy of the Philippines
1600 Massachusetts Ave NW
Washington DC 20036
Tel 202-467-9363
Fax 202-467-9417
[email protected]
www.philippineembassyusa.org