Transcript strategic direction for business and investments in - MASS

PART 1
ECONOMIC BRIEFING: THE PHILIPPINE
ECONOMY AND THE FILIPINO PEOPLE
Cid L. Terosa, Ph.D.
School of Economics
University of Asia and the Pacific
Outline
• Is the economy producing more?
• What type of spending is driving economic
growth?
• Which industries are driving economic
growth?
• Do we have enough dollars to support the
economy?
• Are we paying more for the goods and
services we buy?
Outline
• Is it expensive to borrow money?
• How are Philippine regions performing?
• Which provinces and cities in the Philippines have
good market potential?
• How are Filipinos doing? Are more Filipinos poor?
• What are growth prospects this year?
Is the economy producing more?
Growth of domestic production
went down in 2015.
GROWTH RATE (%)
Gross Domestic Product (GDP) Growth Rate: 2000-2015
(constant 2000 prices, in %)
8
7
6
5
4
3
2
1
0
7.6
6.7
5
4.4
2.9
6.8 7.2
6.6
4.8 5.2
3.6
4.2
6.1 5.9
3.6
1.1
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
YEAR
GDP GROWTH RATE
Source: Philippine Statistics Authority
But growth of domestic production has been above
the historical trend for most of the past 6 years.
GROWTH RATE (%)
Gross Domestic Product (GDP) Growth Rate: 2000-2015
(constant 2000 prices, in %)
8
7
6
5
4
3
2
1
0
7.6
6.7
5
4.4
2.9
6.8 7.2
6.6
4.8 5.2
3.6
4.2
6.1 5.9
3.6
1.1
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
YEAR
GDP GROWTH RATE
Source: Philippine Statistics Authority
Linear (GDP GROWTH RATE)
Weaker quarterly growth in 2015
relative to 2014
QUARTERLY GROWTH RATE (2011-2015Q4)
6.5 6.3
7.3 7.1 7.7 7.6 7
6.8
6.5
6.7
5.7
5.6
4.9
6.5
6.2
5.9
5
YEAR AND QUARTER
Source: Philippine Statistics Authority
2015q4
2015Q3
2015Q2
2015Q1
2014Q4
2014Q3
2014Q2
2014Q1
2013Q4
2013Q3
2013Q2
2013Q1
2012Q4
2012Q3
2012Q2
2012Q1
2011Q4
2011Q3
2011Q2
3.6 3.2 4
2011Q1
9
8
7
6
5
%4
3
2
1
0
But stronger first quarter growth in
2016 relative to 2015.
QUARTERLY GROWTH RATE (2011-2016Q1)
6.5 6.3
7.3 7.1 7.7 7.6 7
6.5
6 6.4
4.9
6.9
5.3
5.2
6.3
5.8 6
6.9
YEAR AND QUARTER
Source: Philippine Statistics Authority
2016Q1
2015Q4
2015Q3
2015Q2
2015Q1
2014Q4
2014Q3
2014Q2
2014Q1
2013Q4
2013Q3
2013Q2
2013Q1
2012Q4
2012Q3
2012Q2
2012Q1
2011Q4
2011Q3
2011Q2
3.6 3.2 4
2011Q1
9
8
7
6
5
%4
3
2
1
0
What type of spending is driving
economic growth?
Growth of domestic production is largely driven by
household consumption spending.
80.00%
60.00%
40.00%
20.00%
Share
0.00%
-20.00%
HFCE
GFCE
CF
EXP
IMP
-40.00%
-60.00%
Demand Drivers of GDP Growth
2012
2013
2014
2015
Note: computed based on data from the Philippine Statistics Authority
SD
Capital formation and exports have consistently
contributed to growth in 2014 and 2015.
80.00%
60.00%
40.00%
2012
20.00%
2013
Share
0.00%
2014
HFCE
GFCE
CF
EXP
IMP
-20.00%
-40.00%
-60.00%
Demand Drivers of GDP Growth
Note: computed based on data from the Philippine Statistics Authority
SD
2015
Which sectors are driving
economic growth?
Growth of domestic production is
service sector-led.
70.00%
60.00%
50.00%
40.00%
2012
30.00%
2013
SHARE
2014
20.00%
2015
10.00%
0.00%
AGRI
INDUSTRY
SECTOR
Source of basic data: Philippine Statistics Authority
SERVICE
Which industries are driving
economic growth?
Industry Drivers of the Growth of Gross
Domestic Product (2014 and 2015)
INDUSTRY
SHARE IN GDP GROWTH
(2014)
SHARE IN GDP GROWTH
(2015)
Agriculture and Forestry
2.84%
0.93%
Fishery
-0.12%
-0.57%
Mining and Quarrying
0.86%
-0.25%
Manufacturing
30.83%
22.98%
Construction
9.19%
9.00%
Electricity, Gas, and Water
1.53%
2.66%
Transportation, Storage, and
Communication
7.52%
10.22%
Trade and Repair
15.44%
19.63%
Financial Intermediation
8.41%
7.11%
Real Estate, Renting and Business
Activities
15.57%
14.03%
Public Admin., Defense
2.44%
0.43%
Other Services
5.49%
13.82%
Note: Computed based on data from the National Statistical Coordination Board-Philippine Statistics Authority..
For the past three years, manufacturing, trade, and
real estate accounted for more than 55% of growth.
SHARE IN GDP GROWTH, %)
70
60
50
40
30
20
10
0
2013
2014
YEAR
MFGTRADEREALESTATE
2015
OTHERS
Source of basic data: National Statistical Coordination Board-Philippine Statistics Authority
The share of manufacturing in growth continues
to fall, but the share of trade continues to rise.
INDUSTRY
SHARE IN GDP
GROWTH (2013)
SHARE IN GDP
GROWTH (2014)
SHARE IN GDP
GROWTH (2015)
AGRICULTURE,
FORESTRY, FISHERY
2.70%
2.72% ↑
0.36% ↓
MANUFACTURING
32.45%
30.83% ↓
22.98% ↓
CONSTRUCTION
AND REAL ESTATE
21.13%
24.76% ↑
23.3% ↓
TRADE AND REPAIR
15.17%
15.44% ↑
19.63% ↑
OTHER SERVICES
7.98%
5.49% ↓
13.82% ↑
Source of basic data: National Statistical Coordination Board-Philippine Statistics Authority
Do we have enough dollars to
support the economy?
We are earning more dollars from
trade through time.
CURRENT ACCOUNT:2000-2015
(IN MILLION US$)
14000
CURRENT ACCOUNT
12000
10000
8000
6000
4000
2000
0
-2000 200020012002 2003200420052006 20072008200920102011 2012201320142015
-4000
YEAR
CURRENT ACCOUNT
Source: Bangko Sentral ng Pilipinas
But dollar earnings from trade fell
below historical trend in 2015.
CURRENT ACCOUNT:2000-2015
(IN MILLION US$)
14000
CURRENT ACCOUNT
12000
10000
8000
6000
4000
2000
0
-2000 200020012002 2003200420052006 20072008200920102011 2012201320142015
-4000
YEAR
CURRENT ACCOUNT
Source: Bangko Sentral ng Pilipinas
Linear (CURRENT ACCOUNT)
Reserves rose in 2015
GROSS INTERNATIONAL RESERVES (in billion US$)
84.25 83.9
90
75.3
80
70
79.8 80.67
62.37
GIR
60
44.24
37.55
33.75
50
40
30
22.97
18.49
17.0616.23
20 15.0615.6916.36
10
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
YEAR
Source: Bangko Sentral ng Pilipinas
But reserves fell below historical trend
in 2015 (for the first time in 6 years).
GROSS INTERNATIONAL RESERVES: 2000-2015
(in billion US$)
100
GIR
80
60
40
20
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
YEAR
Series1
Source: Bangko Sentral ng Pilpinas
Linear (Series1)
Reserves are still more than
enough for our needs.
GROSS INTERNATIONAL RESERVES: 2000-2015
(in billion US$)
100
GIR
80
6-months benchmark
60
40
20
0
YEAR
GIR
Source: Bangko Sentral ng Pilipinas
We have enough reserves even after paying
for short-term debts.
Net International Reserves (in billion US$)
100
6 months benchmark
NIR
80
60
40
20
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
YEAR
NIR
Source: Bangko Sentral ng Pilipinas
More dollars from family and friends
REMITTANCES: 2000-2015
(in billion US$)
REMITTANCES
30
25
20
15
10
7.58 8.55
6.05 6.03 6.89
25.77
24.35
22.98
21.39
18.7620.12
16.4317.35
14.45
12.76
10.69
5
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
YEAR
Series1
Source: Bangko Sentral ng Pilipinas
Inflow of remittances is still consistent
with historical trend.
REMITTANCES: 2000-2015
(in billion US$)
REMITTANCES
30
25
20
15
10
7.58 8.55
6.89
6.05 6.03
25.77
24.35
22.98
21.39
18.7620.12
16.4317.35
14.45
12.76
10.69
5
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
YEAR
REMITTANCES
Source: Bangko Sentral ng Pilipinas
Linear (REMITTANCES)
As reserves increase, the peso-dollar rate
becomes relatively strong and stable.
GIR AND PESO-DOLLAR RATE
GROSS INTERNATIONAL RESERVES (in billion US$) AND
PESO-DOLLAR EXCHANGE RATE (2000-2015)
100
80
60
40
20
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
YEAR
RESERVES
Source: Bangko Sentral ng Pilipinas
EXCHANGE RATE
Are we paying more for the goods
and services we buy?
Inflation rate in 2015 was the lowest
since 2000.
INFLATION RATE, %
INFLATION RATE (IN %, 2006=100)
9
8
7
6
5
4
3
2
1
0
8.3
6.7
6.5
5.3
4.8
2.7 2.3
5.5
4.2 3.8 4.6
2.9
4.1
3.2
3
1.4
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
YEAR
INFLATION RATE
Linear (INFLATION RATE)
Source: National Statistical Coordination Board-Philippine Statistics Authority
As reserves grow and the peso-dollar rate remains
relatively strong, inflation remains stable
90
TREND OF RESERVES, PESO-DOLLAR RATE, AND INFLATION RATE:
2000-2015
80
70
60
50
40
30
20
10
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
INFLATION RATE
PESO-DOLLAR RATE
RESERVES
Source: Bangko Sentral ng Pilipinas and National Statistical Coordination Board
Is it expensive to borrow money?
Falling domestic interest rates
91-DAY TREASURY BILL RATE AND AVERAGE BANK LENDING RATE:
2000-2015 (in %)
INTEREST RATE, IN %
14
12
10
8
6
4
2
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
YEAR
T-BILL RATE (91 DAY)
Source: Bangko Sentral ng Pilipinas
BANK LENDING RATE
Lower inflation rate, lower
domestic interest rates
91-DAY TREASURY BILL RATE, AVERAGE BANK LENDING RATE, AND
INFLATION RATE : 2000-2015 (in %)
INTEREST RATE, IN %
14
12
10
8
6
4
2
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
YEAR
T-BILL RATE (91 DAY)
Source: Bangko Sentral ng Pilipinas
BANK LENDING RATE
INFLATION RATE
How are Philippine regions
performing?
From 2011 to 2014, Mindanao was never the
slowest growing island-region in the country.
GROWTH OF PRODUCTION: 2011-2014 (by region, in %)
PHILIPPINES
NCR
LUZON
VISAYAS
MINDANAO
GROWTH RATE
10
8
6
4
2
0
2011
2012
2013
YEAR
Source: National Statistical Coordination Board-Philippine Statistics Authority
2014
From 2012 to 2014, Mindanao contributed more to
the growth of the national economy than the Visayas.
CONTRIBUTION TO GROWTH
CONTRIBUTION TO GROWTH OF PRODUCTION:
2011-2014 (by region, in %)
NCR
3.5
3
2.5
2
1.5
1
0.5
0
LUZON
VISAYAS
MINDANAO
3.3
2.5 2.4
2.2
1.1 1.2
2.1
1.2
0.7 0.6
2011
0.7
0.7
2012
2013
YEAR
Source: National Statistical Coordination Board-Philippine Statistics Authority
0.9
2.3
1.1
0.7
2014
Which regions in Luzon contributed more to the
growth of domestic production?
REGION
2011 (%)
2012 (%)
2013 (%)
2014(%)
Philippines
(GDP growth
rate, in %)
3.6
6.8
7.1
6.1
NCR
1.1
2.5
3.3
2.1
CAR
0.0
0.0
0.1
0.1
Ilocos Region
0.1
0.2
0.2
0.2
Cagayan
Valley
0.1
0.1
0.1
0.1
Central Luzon
0.6
0.6
0.4
0.8
CALABARZON
0.3
1.3
1.2
0.9
MIMAROPA
0.1
0.1
0.0
0.1
BICOL
0.0
0.1
0.2
0.1
Source: National Statistical Coordination Board – Philippine Statistics Authority
Which region in the Visayas contributed more to
the growth of domestic production?
REGION
2011 (%)
2012 (%)
2013 (%)
2014 (%)
Philippines
(GDP growth
rate, in %)
3.6
6.8
7.1
6.1
Western
Visayas
0.2
0.2
0.1
0.2
Central
Visayas
0.4
0.6
0.5
0.6
Eastern
Visayas
0.1
-0.2
0.1
-0.1
Source: National Statistical Coordination Board-Philippine Statistics Authority
Which regions in Mindanao contributed more to
the growth of domestic production?
REGION
2011 (%)
2012 (%)
2013 (%)
2014(%)
Philippines
(GDP growth
rate, in %)
3.6
6.8
7.1
6.1
Zamboanga
Peninsula
0.0
0.3
0.1
0.1
Northern
Mindanao
0.2
0.3
0.2
0.3
Davao Region
0.1
0.3
0.3
0.4
Soccsksargen
0.1
0.2
0.2
0.2
CARAGA
0.1
0.1
0.1
0.1
ARMM
-0.0
0.0
0.0
0.0
Source: National Statistical Coordination Board-Philippine Statistics Authority
Which regions are growing faster
than the national economy?
AVERAGE GROWTH RATE (2012-2014)
(IN %)
PHILIPPINES
6.5
1. CARAGA
9.9
2. CENTRAL VISAYAS
8.3
3. SOCCSKSARGEN
7.9
4. DAVAO REGION
7.8
5. NORTHERN MINDANAO
7.3
6. NATIONAL CAPITAL REGION
7.1
7. ZAMBOANGA PENINSULA
6.9
8. CAGAYAN VALLEY
6.8
9. CENTRAL LUZON
6.5
Source: National Statistical Coordination Board-Philippine Statistics Authority
Which regions are creating more
jobs than the national economy?
AVERAGE EMPLOYMENT GROWTH
RATE (2012-2014)
(IN %)
PHILIPPINES
1.29
1. ARMM
4.24
2. BICOL
3.42
3. CARAGA
3.27
4. CALABARZON
3.00
5. CENTRAL LUZON
2.45
6. CENTRAL VISAYAS
2.40
7. DAVAO REGION
2.20
8. NCR
2.05
9. NORTHERN MINDANAO
1.63
Source: Bureau of Labor and Employment Statistics
MORE PRODUCTION, MORE JOBS
AVERAGE EMPLOYMENT GROWTH (2012-2014)
AVERAGE
GROWTH RATE
OF GROSS
REGIONAL
DOMESTIC
PRODUCT
(2012-2014)
MORE THAN
AVERAGE
OUTPUT
GROWTH
LESS THAN
AVERAGE
OUTPUT
GROWTH
MORE THAN AVERAGE
EMPLOYMENT GROWTH
LESS THAN AVERAGE
EMPLOYMENT GROWTH
NCR *
CENTRAL LUZON *
CENTRAL VISAYAS *
NORTHERN MINDANAO
DAVAO REGION
CARAGA
CAGAYAN VALLEY *
ZAMBOANGA PENINSULA
SOCCSKSARGEN *
CALABARZON *
BICOL REGION
ARMM
CAR
ILOCOS
MIMAROPA *
WESTERN VISAYAS
EASTERN VISAYAS *
Source of Basic Data: NSCB-PSA and BLES
Distribution of Household
Spending (2014)
SHARE OF REGIONS IN HOUSEHOLD SPENDING(%)
25
23.5
20
SHARE
16.1
15
12.2
10
6.4
4.6
5
1.6
2.8
4.3
6.5
3.4
2.3
2.4
3.5
3.9
0
REGION
Source of Basic Data: National Statistical Coordination Board-Philippine Statistics Authority
3.3
1.6
1.5
In which regions is household spending
growing faster than the national economy?
AVERAGE GROWTH OF HOUSEHOLD
FINAL CONSUMPTION SPENDING
(2012-2014)
(IN %)
PHILIPPINES
5.7
1. MIMAROPA *
7.1
2. ZAMBOANGA PENINSULA *
6.9
3. CENTRAL VISAYAS *
6.9
4. DAVAO REGION
6.7
5. CENTRAL LUZON
6.3
6. NORTHERN MINDANAO *
6.1
7. ILOCOS REGION
5.9
Source: National Statistical Coordination Board-Philippine Statistics Authority
PRODUCING AND SPENDING MORE
AVERAGE GROWTH RATE OF HOUSEHOLD FINAL CONSUMPTION
SPENDING (2012-2014)
AVERAGE
GROWTH RATE
OF GROSS
REGIONAL
DOMESTIC
PRODUCT
(20012-2014)
ABOVE NATIONAL
AVERAGE CONSUMPTION
SPENDING
BELOW NATIONAL
AVERAGE
CONSUMPTION
SPENDING
ABOVE
NATIONAL
AVERAGE
GDP
CENTRAL LUZON
CENTRAL VISAYAS *
NORTHERN MINDANAO *
ZAMBOANGA PENINSULA
DAVAO REGION
NCR
CAGAYAN VALLEY *
CARAGA *
SOCCSKSARGEN *
BELOW
NATIONAL
AVERAGE GDP
ILOCOS REGION
MIMAROPA *
CALABARZON
CAR *
BICOL REGION
WESTERN VISAYAS
EASTERN VISAYAS *
ARMM *
Source of Basic Data: National Statistical Coordination Board- Philippine Statistics Authority
Regions that grew faster than the national economy in
terms of production, employment, and spending
(2012-2014)
CENTRAL LUZON
CENTRAL VISAYAS
NORTHERN
MINDANAO
DAVAO REGION
Which provinces and cities in the
Philippines have good market
potential?
TOP PROVINCES IN TERMS OF
MARKET POTENTIAL
TOP TEN PROVINCES
NEXT TEN PROVINCES
1. CEBU
2. CAVITE
3. BATANGAS
4. BULACAN
11. NEGROS OCCIDENTAL
12. NUEVA ECIJA
13. ILOILO
14. SOUTH COTABATO
5. LAGUNA
6. PAMPANGA
7. DAVAO DEL SUR
15. BATAAN
16. ZAMBOANGA DEL SUR
17. QUEZON
8. RIZAL
18. BOHOL
9. MISAMIS ORIENTAL
10. PANGASINAN
19. LEYTE
20. NEGROS ORIENTAL
TOP REGIONAL PROVINCES
REGION
TOP PROVINCE(S)
CORDILLERA
AUTONOMOUS REGION
BENGUET
ILOCOS REGION
PANGASINAN, LA UNION
CAGAYAN
CAGAYAN, ISABELA
CENTRAL LUZON
BULACAN, PAMPANGA
CALABARZON
CAVITE, BATANGAS
MIMAROPA
PALAWAN, OCCIDENTAL MINDORO
BICOL
CAMARINES SUR, ALBAY
TOP REGIONAL PROVINCES
REGION
TOP PROVINCE(S)
WESTERN VISAYAS
ILOILO, NEGROS OCCIDENTAL
CENTRAL VISAYAS
CEBU, BOHOL
EASTERN VISAYAS
LEYTE
ZAMBOANGA
PENINSULA
ZAMBOANGA DEL SUR
NORTHERN MINDANAO
MISAMIS ORIENTAL, BUKIDNON
DAVAO REGION
DAVAO DEL SUR, DAVAO DEL NORTE
CARAGA
AGUSAN DEL NORTE, SURIGAO DEL NORTE
TOP CITIES IN TERMS OF MARKET POTENTIAL
TOP TEN CITIES
NEXT TEN CITIES
1. CEBU CITY
11. MANDAUE CITY
2. DAVAO CITY
12. LAPU-LAPU CITY
3. CAGAYAN DE ORO CITY
13. DASMARINAS CITY
4. STA. ROSA CITY
14. ANGELES CITY
5. ILOILO CITY
15. CABUYAO CITY
6. CALAMBA CITY
16. BINAN CITY
7. BACOLOD CITY
17. BAGUIO CITY
8. BATANGAS CITY
18. GENERAL SANTOS CITY
9. ANTIPOLO CITY
19. CABANATUAN CITY
10. SAN FERNANDO CITY
(PAMPANGA)
20. LIPA CITY
TOP CITIES (BY REGION)
REGION
TOP CITY/ CITIES
CORDILLERA AUTONOMOUS
REGION
BAGUIO CITY
ILOCOS REGION
DAGUPAN CITY, SAN FERNANDO CITY (LA UNION),
LAOAG CITY
CAGAYAN
SANTIAGO CITY, CAUAYAN CITY
CENTRAL LUZON
SAN FERNANDO CITY (PAMPANGA), ANGELES CITY,
CABANATUAN CITY, TARLAC CITY, MEYCAUAYAN CITY
CALABARZON
STA.ROSA CITY, CALAMBA CITY, BATANGAS CITY,
ANTIPOLO CITY, DASMARINAS CITY
MIMAROPA
PUERTO PRINCESA CITY, CALAPAN CITY
BICOL
NAGA CITY, LEGASPI CITY, SORSOGON CITY
TOP CITIES (BY REGION)
REGION
TOP CITY/ CITIES
WESTERN VISAYAS
ILOILO CITY, BACOLOD CITY, ROXAS CITY, KABANKALAN
CITY, TALISAY CITY
CENTRAL VISAYAS
CEBU CITY, MANDAUE CITY, LAPU-LAPU CITY,
DUMAGUETE CITY, TALISAY CITY (CEBU)
EASTERN VISAYAS
TACLOBAN CITY, ORMOC CITY, MAASIN CITY
ZAMBOANGA PENINSULA
ZAMBOANGA CITY, PAGADIAN CITY, DIPOLOG CITY
NORTHERN MINDANAO
CAGAYAN DE ORO CITY, ILIGAN CITY, OZAMIS CITY,
VALENCIA CITY
DAVAO REGION
DAVAO CITY, TAGUM CITY, DIGOS CITY
CARAGA
BUTUAN CITY, SURIGAO CITY
Summing up
REGIONS WITH BETTER
MARKET POTENTIAL
PROVINCES WITH HIGHER
LEVELS OF MARKET POTENTIAL
CITIES WITH HIGHER LEVELS OF
MARKET POTENTIAL
1. NCR
1. CEBU
1. CEBU CITY
2.CALABARZON
2. CAVITE
2. DAVAO CITY
3.CENTRAL LUZON
3. BATANGAS
3. CAGAYAN DE ORO CITY
4. CENTRAL VISAYAS
4. BULACAN
4. STA. ROSA CITY
5. WESTERN VISAYAS
5. LAGUNA
5. ILOILO CITY
6.BICOL REGION
6. PAMPANGA
6. CALAMBA CITY
7. NORTHERN MINDANAO
7. DAVAO DEL SUR
7. BACOLOD CITY
8. MIMAROPA
8. RIZAL
8. BATANGAS CITY
9. ILOCOS REGION
9.MISAMIS ORIENTAL
9. ANTIPOLO CITY
10. DAVAO REGION
10. PANGASINAN
10. SAN FERNANDO CITY,
PAMPANGA
How are Filipinos doing?
More than 25% of the population is still poor, but
poverty incidence is slowly improving.
Poverty incidence in the Philippines (%,headcount, 2006-2015)
29
28.8
28.6
28.5
27.9
28
27.5
27
26.3
26.5
26
25.5
25
2006
2009
POVERTY INCIDENCE
Source of data: Philippine Statistics Authority
2012
2015
Poverty incidence in Mindanao is the
worst, but it has slowly improved.
Poverty Incidence in the Philippines (%, headcount, 2006-2015)
50
42.8 43 43.2
45
38.1 37.6
40
35.6
35
30
28.8 28.6 27.9
41.3
34.2
26.3
25
19.7 19.5 18.7
20
17.4
15
10
6.5
4.4 5.3 5.4
5
0
PHILIPPINES
NCR
LUZON
2006
Source of data: Philippine Statistics Authority
2009
2012
VISAYAS
2015
MINDANAO
Mindanao recorded the highest decrease
in poverty incidence from 2012 to 2015.
Change in poverty incidence (2006-2015, in percentage points)
Change in poverty incidence
1.5
1
0.5
0
-0.5
-1
-1.5
-2
-2.5
PHIL.
NCR
LUZON
VISAYAS
MINDANAO
2006-2009
-0.2
1
-0.7
-0.5
0.2
Source of data: Philippine Statistics Authority
2009-2012
-0.7
0.1
-1.1
-2
0.3
2012-2015
-1.6
1.1
0.9
-1.4
-1.9
Poverty Incidence in the NCR and Luzon:
2012 and 2015 (headcount, in %)
2012
2015
CHANGE
PHILIPPINES
27.9
26.3
-1.6
NCR
5.4
6.5
1.1
CORDILLERA
28.7
26.7
-2.0 *
ILOCOS REGION
21.1
21.7
-0.6
CAGAYAN VALLEY
25.0
21.5
-3.5 *
CENTRAL LUZON
15.6
15.8
0.2
CALABARZON
14.3
13.4
-0.9
MIMAROPA
37.2
29.8
-7.4 *
BICOL REGION
43.3
39.0
-4.3 *
Source: Philippine Statistics Authority
Poverty incidence in the Visayas:
2012 and 2015 (headcount, in %)
2012
2015
CHANGE
PHILIPPINES
27.9
26.3
-1.6
WESTERN VISAYAS
31.7
30.5
-1.2
CENTRAL VISAYAS
33.6
30.5
-3.1 *
EASTERN VISAYAS
45.4
47.3
1.9
Source: Philippine Statistics Authority
Poverty incidence in Mindanao:
2012 and 2015 (headcount, in %)
2012
2015
CHANGE
PHILIPPINES
27.9
26.3
-1.6
ZAMBOANGA PEN.
42.8
39.0
-3.8 *
N. MINDANAO
43.1
40.9
-2.2
DAVAO REGION
34.5
26.7
-7.8 *
SOCCSKSARGEN
45.8
44.5
-1.3
CARAGA
42.0
43.9
1.9
ARMM
52.9
59
-6.1 *
Source: Philippine Statistics Authority
Faster production growth, greater decrease in
poverty incidence?
CHANGE IN POVERTY INCIDENCE (2012 AND 2015)
AVERAGE
GROWTH RATE
OF GROSS
REGIONAL
DOMESTIC
PRODUCT
(2012-2014)
MORE THAN
AVERAGE
OUTPUT
GROWTH
LESS THAN
AVERAGE
OUTPUT
GROWTH
Source of Basic Data: NSCB-PSA
GREATER CHANGE IN POVERTY
INCIDENCE RELATIVE TO THE
PHILIPPINES
LESSER CHANGE IN POVERTY
INCIDENCE RELATIVE TO THE
PHILIPPINES
CAGAYAN VALLEY
CENTRAL VISAYAS
ZAMBOANGA PENINSULA
NORTHERN MINDANAO
DAVAO REGION
NCR
CENTRAL LUZON
SOCCSKSARGEN
CARAGA
CAR
BICOL REGION
ARMM
MIMAROPA
ILOCOS REGION
CALABARZON
WESTERN VISAYAS
EASTERN VISAYAS
Faster job growth, greater decrease in
poverty incidence?
CHANGE IN POVERTY INCIDENCE (2012 AND 2015)
AVERAGE
GROWTH RATE
OF
EMPLOYMENT
(2012-2014)
MORE THAN
AVERAGE
JOB
GROWTH
LESS THAN
AVERAGE
JOB
GROWTH
Source of Basic Data: NSCB-PSA
GREATER CHANGE IN POVERTY
INCIDENCE RELATIVE TO THE
PHILIPPINES
LESSER CHANGE IN POVERTY
INCIDENCE RELATIVE TO THE
PHILIPPINES
BICOL REGION
CENTRAL VISAYAS
NORTHERN MINDANAO
DAVAO REGION
ARMM
NCR
CENTRAL LUZON
CALABARZON
CARAGA
CAR
MIMAROPA
CAGAYAN VALLEY
ZAMBOANGA PENINSULA
EASTERN VISAYAS
ILOCOS REGION
WESTERN VISAYAS
SOCCSKSARGEN
11 of the 20 poorest provinces in the
Philippines are in Mindanao.
TOP 10 PROVINCES
POVERTY
INCIDENCE
(2015,%)
NEXT 10
PROVINCES
POVERTY
INCIDENCE
(2015,%)
1. Lanao del Sur
70.2
11. Negros Oriental
41.9
2. Sulu
61.8
12. N. Cotabato
41.8
3. Sarangani
54.5
13. W. Samar
41.8
4. Bukidnon
53.6
14. Lanao del Norte
41.4
5. Siquijor
53.0
15. Mt. Province
40.7
6. Northern Samar
52.4
16. E. Samar
40.1
7. Maguindanao
50.4
17. Camiguin
40.0
8. Sultan Kudarat
47.4
18. Catanduanes
39.7
9. Zamb. del Norte
45.8
19.Apayao
37.5
10.Agusan del Sur
44.7
20.Camarines Norte
36.5
Source of Basic Data: Philippine Statistics Authority
Has poverty incidence gone down in provinces
with the highest poverty incidence?
TOP 10 PROVINCES
POVERTY
INCIDENCE
(2012,%)
POVERTY
INCIDENCE
(2015, %)
CHANGE
(percentage points)
1. Lanao del Sur
68.9
70.2
1.3 ↑
2. Sulu
30.3
61.8
31.5 ↑
3. Sarangani
46.5
54.5
8.0 ↑
4. Bukidnon
43.3
53.6
10.3 ↑
5. Siquijor
24.6
53.0
28.4 ↑
6. Northern Samar
43.7
52.4
8.7 ↑
7. Maguindanao
57.8
50.4
-7.4 ↓
8. Sultan Kudarat
41.6
47.4
5.8 ↑
9. Zamb. Del Norte
50.3
45.8
-4.5 ↓
10.Agusan del Sur
38.6
44.7
6.1 ↑
Source of Basic Data: Philippine Statistics Authority
Which groups of individuals have
higher poverty incidence?
SECTORS
POVERTY INCIDENCE
(FOR THE PHIL., 2012,IN %)
FISHERMEN
39.2
FARMERS
38.3
CHILDREN
35.2
SELF-EMPLOYED AND UNPAID FAMILY
WORKERS
29.0
WOMEN
25.6
YOUTH
22.3
EMPLOYED
21.9
UNEMPLOYED
18.7
MIGRANTS AND FORMAL SECTOR WORKERS
16.6
SENIOR CITIZENS
16.2
INDIV. LIVING IN URBAN AREAS
13.0
Source of basic data: Philippine Statistics Authority
In which regions is poverty incidence
highest for different groups of individuals?
SECTORS
FISHERMEN
TOP 3 REGIONS WITH HIGH POVERTY
INCIDENCE (2012,IN %)
CARAGA, E.VISAYAS, BICOL
FARMERS
ARMM, N.MINDANAO, ZAMB. PENINSULA
CHILDREN
ARMM, E.VISAYAS, SOCCSKSARGEN
SELF-EMPLOYED AND UNPAID FAMILY
WORKERS
ARMM, ZAMB. PENINSULA, N. MINDANAO
WOMEN
ARMM, E.VISAYAS, SOCCSKSARGEN
YOUTH
ARMM, E. VISAYAS, SOCCSKSARGEN
EMPLOYED
ARMM, E. VISAYAS, SOCCSKSARGEN
UNEMPLOYED
MIGRANTS AND FORMAL SECTOR WORKERS
ARMM, E.VISAYAS, N. MINDANAO
ARMM, SOCCSKSARGEN, BICOL
SENIOR CITIZENS
ARMM, SOCCSKSARGEN, E.VISAYAS
INDIV. LIVING IN URBAN AREAS
ARMM, SOCCSKSARGEN, CARAGA
Source of basic data: Philippine Statistics Authority
What are the prospects for
economic growth this year?
Production this year could grow
faster than last year.
GROWTH RATE (%)
Gross Domestic Product (GDP) Growth Rate: 2000-2015
(constant 2000 prices, in %)
8
7
6
5
4
3
2
1
0
7.6
6.7
5
4.4
2.9
6.8 7.2
6.6
4.8 5.2
3.6
4.2
6.1 5.9
3.6
1.1
2000200120022003200420052006200720082009201020112012201320142015
YEAR
GDP GROWTH RATE
Source: Philippine Statistical Authority
Linear (GDP GROWTH RATE)
Strong first quarter growth in 2016
relative to 2015
QUARTERLY GROWTH RATE (2010-2016Q1)
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
2015Q4
2016Q1
10
8.9
8.4
9
7.3
7.37.17.77.6 7
8
6.56.3
6.5 6 6.4 6.9
6.56.9
6.2
6.1
7
5.9
5.3
6
5
4.9
% 5
3.63.2 4
4
3
2
1
0
YEAR AND QUARTER
Series1
Source: Philippine Statistical Authority
Rising quarterly growth trend since the
first quarter of 2015
QUARTERLY GDP GROWTH RATE (2010-2016Q1)
10
8
4
2
0
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
2015Q4
2016Q1
%
6
YEAR AND QUARTER
GDP GROWTH RATE (BY QUARTER)
Source: Philippine Statistical Authority
Growth Drivers (rest of 2016)
Demand Drivers of Growth
Industry Drivers of Growth
Household Family Consumption
Spending
Manufacturing
Government spending
Construction
Investments (if foreign
ownership restrictions are
relaxed)
Trade
Private business services
Real Estate and related
activities
Downside Risk Factors
La Niña
Calamities, natural disasters
Geopolitical tensions
(Middle East, Asia)
Rising cost of petroleum
products, electricity, and
water
Economic performance of
developed countries
Growth slowdown in China
Negative investor sentiments
and perceptions
Weak global economic
outlook
Will we earn more dollars this year?
SOME FACTORS TO CONSIDER
Growth prospects of major trading partners (USA, Japan, China)
Geopolitical risks and economic performance of countries in the Middle
East
Policy actions of developed countries particularly the USA
Remittances and tourism revenues
Inflow of foreign investments
Will family and friends remit more
dollars this year?
REMITTANCES
REMITTANCES: 2000-2015
(in billion US$)
30
25
20
15
10
5
0
8.55
6.05 6.03 6.89 7.58
25.77 26.8
24.35
21.3922.98
20.12
18.76
16.4317.35
14.45
12.76
10.69
YEAR
Cash remittances
Source: Bangko Sentral ng Pilipinas
Growth of remittances will continue to
be slower in 2016.
Growth of remittances (2009-2015, in %)
9
8
7
6
5
4
3
2
1
0
8.2
7.4
7.2
7.2
6.3
5.6
4.6
GROWTH RATE
Source of data: Bangko Sentral ng Pilipinas
Linear (GROWTH RATE)
4
But encouraging trend for the first
four months of 2016.
TOTAL CASH REMITTANCES: JANUARY-APRIL 2015 AND 2016
(IN BILLION $)
8.7
8.65
8.6
8.55
8.5
8.45
8.4
8.35
8.3
8.25
JAN-APRIL2015
JAN-APRIL2016
Total cash remittances
Source of data: Bangko Sentral ng Pilipinas
Will the peso be stronger or weaker?
SOME FACTORS TO CONSIDER
Growth prospects of developed countries particularly the USA
Geopolitical risks and economic performance of countries in the Middle
East
Policy actions of developed countries particularly the USA
Remittances and tourism revenues
Inflow of foreign investments
Will the peso be stronger or weaker?
FACTOR
TENDENCY OF THE
PESO-DOLLAR RATE
Economic recovery in developed
countries
weaken
Outflow of investments due to
geopolitical risks and policy actions of
developed countries particularly the
USA
weaken
Sustained increase in remittances and
tourism revenues
strengthen
Inflow of investments due to
sustained strong economic
performance of the country
strengthen
Will the peso be stronger or weaker?
Gross International Reserves and Peso-Dollar Rate
120
Forecast Trend for GIR
100
80
60
40
20
0
2000200120022003200420052006200720082009201020112012201320142015
GIR
peso-dollar rate
Linear (GIR)
Will we be paying more for the goods
and services we buy?
INFLATION RATE, %
INFLATION RATE (IN %, 2006=100)
9
8
7
6
5
4
3
2
1
0
8.3
6.7
6.5
5.3
4.8
5.5
2.7 2.3
4.2 3.8 4.6
2.9
3.2 3
1.4 1.3
YEAR
INFLATION RATE
4.1
Linear (INFLATION RATE)
Source: National Statistical Coordination Board-Philippine Statistics Authority
If reserves continue to grow and the peso does not
drastically lose value, inflation may remain stable.
90
TREND OF RESERVES, PESO-DOLLAR RATE, AND INFLATION RATE:
2000-2015
80
70
60
50
40
30
20
10
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
INFLATION RATE
PESO-DOLLAR RATE
Source: Bangko Sentral ng Pilipinas and National Statistical Coordination Board
GIR
Will we be paying more for the goods and
services we buy?
COST-PUSH
FACTORS
PRESSURE ON
PRICES
Prices of imported
production inputs
When peso is
STRONG
↓
Price of labor
inputs
relatively stable
↓
Cost of borrowing
money
relatively stable
↓
Will we be paying more for the goods and
services we buy?
STRUCTURAL AND
RISK FACTORS
PRESSURE ON
PRICES
Supply bottlenecks
and rigidities
Due to disasters,
calamities, etc.
↑
Domestic and
international
political tensions
Middle East, West
Philippine Sea,
↑
Will domestic interest rates
continue to be low?
91-DAY TREASURY BILL RATE AND AVERAGE BANK LENDING RATE:
2000-2014 (in %)
14
12
10
8
6
4
2
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
YEAR
T-BILL RATE (91 DAY)
Source: Bangko Sentral ng Pilipinas
BANK LENDING RATE
Will domestic interest rates
continue to be low?
FACTORS
Inflation rate
PRESSURE ON
INTEREST RATES
relatively low and
stable
positive growth,
sufficient level
↓
Government deficit
manageable levels
↓
Intermediation Cost
relatively stable
↓
Monetary Policy of
the USA
higher interest rate
regime
↑
Domestic Liquidity
↓
Fearful forecast (2016)
ECONOMIC INDICATOR
GROSS DOMESTIC
PRODUCT
INFLATION RATE
PESO-DOLLAR RATE
AVERAGE BANK LENDING
RATE
2016 forecast
6.0 – 6.5%
1.9 – 2.3%
45 – 47 PESOS: 1 DOLLAR
5.5 -6%
What are the prospects for
growth in Mindanao this year?
When the national economy
grows, some Mindanao regions
grow with it.
Some regions in Mindanao have been
growing faster than the national economy
AVERAGE GROWTH RATE (2012-2014)
(IN %)
PHILIPPINES
6.5
1. CARAGA
9.9
2. CENTRAL VISAYAS
8.3
3. SOCCSKSARGEN
7.9
4. DAVAO REGION
7.8
5. NORTHERN MINDANAO
7.3
6. NATIONAL CAPITAL REGION
7.1
7. ZAMBOANGA PENINSULA
6.9
8. CAGAYAN VALLEY
6.8
9. CENTRAL LUZON
6.5
Source of data: National Statistical Coordination Board-Philippine Statistics Authority
What could positively affect Mindanao’s
economic growth prospects this year?
• President is from Mindanao
• Industry drivers of growth
– Agriculture and agribusiness
– Construction and Real Estate
– Wholesale and Retail Trade
– Tourism and tourism-related industries (hotels,
restaurants, transport services, personal services,
etc.)
What other factors need to be considered?
• External shocks (oil prices, economic performance of
China, USA, Eurozone, etc.)
• State of infrastructure of Mindanao
• Value-added of raw materials and products from
Mindanao
• Development of manufacturing industries
• La Niña, natural disasters
• ASEAN Economic Community
• Federalism
Cooperatives should ride the wave of strong
economic growth in some Mindanao regions.
• CARAGA, SOCCSKSARGEN, Northern
Mindanao, and Davao Region have been
growing faster than the national economy.
• Around 70% of the total number of
cooperatives in Mindanao are in these
regions.
How can Mindanao cooperatives ride the
wave of regional economic growth?
• Establish and strengthen linkages with
industry drivers of growth
– Mindanao, particularly ARMM, has the biggest
number of producer and marketing cooperatives
in the Philippines.
– Davao Region has the greatest number of MPC,
consumer cooperatives, and service cooperatives
in Mindanao.
– Northern Mindanao has the biggest number of
credit cooperatives in Mindanao.
How can Mindanao cooperatives ride the
wave of regional economic growth?
• Diversify goods and services to diversify
linkages with business and industry
– Broaden the market horizon of cooperatives
– Keep cooperatives updated with market trends,
business practices, current issues, related policy
developments etc.
How can Mindanao cooperatives ride the
wave of regional economic growth?
• Find opportunities in risk factors that
negatively affect growth
– If food, energy, and water are looming future
challenges, how can cooperatives become
possible solutions or parts of solutions to these
problems?
PART 2
ECONOMIC INTEGRATION, SUSTAINABLE
DEVELOPMENT GOALS, AND COOPERATIVES
ASEAN Economic Community
and Cooperatives
What is the ASEAN Economic
Community?
• ASEAN Economic Community
–One pillar of the ASEAN Community
agenda
–Aims to broaden and deepen economic
integration among ASEAN membercountries
What are the four pillars of the ASEAN
Economic Community?
• ASEAN Economic Community
– Has four pillars
• Single market and production base
• Highly competitive region
• Region of equitable development
• Region fully integrated into the global
community
How will the four pillars of the ASEAN
Economic Community be achieved?
LIBERALIZATION
OF TRADE IN
SERVICES
LIBERALIZATION
OF TRADE IN
GOODS
LIBERALIZATION
OF
INVESTMENTS
FOUR
PILLARS OF
AEC
Are cooperatives sufficiently covered by the
ASEAN Economic Community blueprint?
• ASEAN Economic Community blueprint
– The only type of cooperative mentioned in
the blueprint is agricultural cooperatives.
– No mention of all other types of
cooperatives
• Thus, cooperatives have to be more broadly
considered in the ASEAN Economic
Community agenda.
What are the economic implications of the
ASEAN Economic Community?
• ASEAN Economic Community implies
–Bigger and more diverse markets
–Greater competition
–Specialization based on
comparative advantage
What are some possible broad responses of
cooperatives to the ASEAN Economic Community?
LEVEL UP
QUANTITY
AND QUALITY
CREATE AND
INNOVATE
PARTNER AND
COLLABORATE
LINK AND
INTEGRATE
COLLECT AND
DISSEMINATE
Sustainable Development Goals
and Cooperatives
What are sustainable development
goals?
• 17 goals to end poverty, fight inequality and
injustice, tackle climate change by 2030
• Builds on the Millennium Development Goals (20002015)
• Sustainable development goals address the root
causes of poverty and the universal need for
inclusive growth and development
What can cooperatives contribute to the
attainment of sustainable development goals?
Sustainable development
goal
1. No poverty
2. Zero hunger
3. Good health and wellbeing
4. Quality education
5. Gender Equality
6. Clean water and
sanitation
7. Affordable and clean
energy
8. Decent work and
economic growth
Can cooperatives
contribute? (Yes/No)
How?
What can cooperatives contribute to the
attainment of sustainable development goals?
Sustainable development
goal
9. Industry, Innovation, and
Infrastructure
10. Reduced inequalities
11. Sustainable cities and
communities
12. Responsible
consumption and
production
13. Climate action
14. Sustainable life below
water
15.Sustainable life on land
Can cooperatives
contribute? (Yes/No)
How?
What can cooperatives contribute to the
attainment of sustainable development goals?
Sustainable development
goal
16. Peace and justice,
strong institutions
17. Partnerships for the
goals
Can cooperatives
contribute? (Yes/No)
How?
Thank you!