Philippine Economy

Topics: Poverty, Economy, Philippines Pages: 8 (2649 words) Published: May 4, 2013
Philippines Economics

Table of contents

1. General Information

2. Agrarian Economy

3. Industrial Economy

4. Services Industries

5. Conclusion

1. General information
The Philippines are located in Southeast Asia in the Western Pacific Ocean. 7,107 Islands are part of the republic. The islands are divided into three major groups: Luzon, Visayas, and Mindanao. The South China Sea defines its western borders and the Pacific Ocean its eastern limits. The country- Area covers 300,000 sq. km. The Philippines’ neighbouring countries include Taiwan, Hong Kong, China, Japan, Singapore, Malaysia, Vietnam; and Indonesia in the south (Universitet Gen, 2010). The population in 2012 was 103,775,002 (world population review, 2013).  The Philippines is a representative republic, where the president takes the role of the head of state and government as well as the commander-in-chief of the armed forces (SEA Economic IBSN). The current president of the Philippines as the follower of Gloria Macapagal Arroyo is Benigno Aquino (BBC, 2013). The president is elected by popular vote every 6 years. The country is a democratic and republican state with the three branches of government executive, legislative and judicial. The Philippines are more over divided into 16 regions, where one of them is an autonomous region – the Autonomous Region of Muslim Mindanao (ARMM). In Manila the seat of power is settled (Universitet Gent, 2010). The GDP of the Philippines in 2010 was $382.5 billion with a growths rate of 7.6% caused by consumer demand, a rebound in exports and investments, and election-related spending. In 2011 there was a 3.9% decrease and an increase in 2012 to $416.7 billion, which is a growth of 4,8%. The economic growth had an average of 4,5% during the time frame of 2001 and 2010 when Macapagal Arroyo used to be president (CIA World Factbook, 2013). Unfortunately the unemployment rate in the Philippines is with a number of 11,4% twice as high as of their neighbouring countries. This is a result of the Asia crisis and the competitors that came after allowing import to the Philippines. Firstly the local companies could not compete with the low prices from outside and secondly the growth rate of the population increased about 2,32% a year. Consequently it is said that there are more than 40% living under poverty boundary. For instance in Manila 3,5 million people live in slums, 42% of the people are defined as poor, 32% live under poverty boundary and 10% are even poorer than that. In order to improve the economic situation in a long term view the population growth needs to be reduced, minimum wages have to be moderated and economic stability due to political engagement must be reached (SEA Economic IBSN)

2. Agriculture
The products that are produced in the agricultural sector of the Philippines are rice, coconuts, corn, sugarcane, pineapples, mangoes, pork, beef and fish. Agriculture is a very important sector for the Philippines as it plays a big role in reducing the number of people living in extreme poverty. The agricultural sector is crucial for reaching the Millennium Development Goals , which include reducing the extreme poverty by 50% by 2015, starting from 1990. Contrary to that is the fact, that although the economy is growing, the biggest poverty is in the agricultural sector. At that point, it is also noticeable that many investments in modernizing the agriculture were made by the former administrations of the Philippines, but that they failed to lift the farmers out of their poverty. However, the importance of agriculture for the Philippines has shrunken drastically. Whereas in 1946 almost 30% of its economy consisted of agriculture, nowadays merely 11 % are contributed by agriculture (National Statistical Coordination Board, 2012). In the table below one can see the development of the share of agriculture to the GDP for the last 25 decades.

Considering the Gross Regional Domestic...
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