1. University of Asia and the Pacific
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

2. 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?

3. 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?

4. Is the economy producing more?

5. Growth of domestic production went down in 2015.
Source: Philippine Statistics Authority

6. But growth of domestic production has been above the historical trend for most of the past 6 years.
Source: Philippine Statistics Authority

7. Weaker quarterly growth in 2015 relative to 2014
Source: Philippine Statistics Authority

8. But stronger first quarter growth in 2016 relative to 2015.
Source: Philippine Statistics Authority

9. What type of spending is driving economic growth?

10. Demand Drivers of the Growth of Domestic Product (2012-2015)
EXPENDITURE COMPONENTS
CONTRIBUTION TO GDP GROWTH (2012)
CONTRIBUTION TO GDP GROWTH (2013)
CONTRIBUTION TO GDP GROWTH (2014)
CONTRIBUTION TO GDP GROWTH (2015)
Household Final Consumption
4.63%
3.94%
4.23%
4.16%
Gov’t Final Consumption
1.20%
0.87%
0.61%
0.60%
Capital Formation
-0.65%
3.37%
1.34%
1.43%
Exports
4.21%
0.38%
2.88%
2.91%
Imports
-2.58%
-2.06%
-2.94%
-3.11%
Statistical Discrepancy 0%
0.64%
GDP Growth Rate
6.81%
7.16%
6.13%
5.99%
Note: computed based on data from the Philippine Statistics Authority

11. Growth of domestic production is largely driven by household consumption spending.
Note: computed based on data from the Philippine Statistics Authority

12. Capital formation and exports have consistently contributed to growth in 2014 and 2015.
Note: computed based on data from the Philippine Statistics Authority

13. Which sectors are driving economic growth?

14. Sectoral Drivers of the Growth of Gross Domestic Product (2012-2015)
CONTRIBUTION TO GDP GROWTH (2012)
CONTRIBUTION TO GDP GROWTH (2013)
CONTRIBUTION TO GDP GROWTH (2014)
CONTRIBUTION TO GDP GROWTH (2015)
AGRICULTURE, HUNTING, FORESTRY, AND FISHERY
0.12%
0.32%
0.17%
0.02%
INDUSTRY
3.03%
2.19%
2.60%
2.07%
SERVICE
4.01%
4.30%
3.36%
3.79%
GDP Growth Rate
7.16%
6.81%
6.13%
5.88%
Note: Computed based on data from the National Statistical Coordination Board-Philippine Statistics Authority.

15. Growth of domestic production is service sector-led.
Source of basic data: Philippine Statistics Authority

16. Which industries are driving economic growth?

17. Industry Drivers of the Growth of Gross Domestic Product (2014 and 2015)
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..

18. For the past three years, manufacturing, trade, and real estate accounted for more than 55% of growth.
Source of basic data: National Statistical Coordination Board-Philippine Statistics Authority

19. 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

20. Do we have enough dollars to support the economy?

21. We are earning more dollars from trade through time.
Source: Bangko Sentral ng Pilipinas

22. But dollar earnings from trade fell below historical trend in 2015.
Source: Bangko Sentral ng Pilipinas

23. Reserves rose in 2015
Source: Bangko Sentral ng Pilipinas

24. But reserves fell below historical trend in 2015 (for the first time in 6 years).
Source: Bangko Sentral ng Pilpinas

25. Reserves are still more than enough for our needs.
Source: Bangko Sentral ng Pilipinas

26. We have enough reserves even after paying for short-term debts.
6 months benchmark
Source: Bangko Sentral ng Pilipinas

27. More dollars from family and friends
Source: Bangko Sentral ng Pilipinas

28. Inflow of remittances is still consistent with historical trend.
Source: Bangko Sentral ng Pilipinas

29. As reserves increase, the peso-dollar rate becomes relatively strong and stable.
Source: Bangko Sentral ng Pilipinas

30. Are we paying more for the goods and services we buy?

31. Inflation rate in 2015 was the lowest since 2000.
Source: National Statistical Coordination Board-Philippine Statistics Authority

32. As reserves grow and the peso-dollar rate remains relatively strong, inflation remains stable
Source: Bangko Sentral ng Pilipinas and National Statistical Coordination Board

33. Is it expensive to borrow money?

34. Falling domestic interest rates
Source: Bangko Sentral ng Pilipinas

35. Lower inflation rate, lower domestic interest rates
Source: Bangko Sentral ng Pilipinas

36. How are Philippine regions performing?

37. From 2011 to 2014, Mindanao was never the slowest growing island-region in the country.
Source: National Statistical Coordination Board-Philippine Statistics Authority

38. From 2012 to 2014, Mindanao contributed more to the growth of the national economy than the Visayas.
Source: National Statistical Coordination Board-Philippine Statistics Authority

39. Which regions in Luzon contributed more to the growth of domestic production?
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
0.1
Ilocos Region
0.2
Cagayan Valley
Central Luzon
0.6
0.4
0.8
CALABARZON
0.3
1.3
1.2
0.9
MIMAROPA
BICOL
Source: National Statistical Coordination Board – Philippine Statistics Authority

40. Which region in the Visayas contributed more to the growth of domestic production?
2011 (%)
2012 (%)
2013 (%)
2014 (%)
Philippines (GDP growth rate, in %)
3.6
6.8
7.1
6.1
Western Visayas
0.2
0.1
Central Visayas
0.4
0.6
0.5
Eastern Visayas
-0.2
-0.1
Source: National Statistical Coordination Board-Philippine Statistics Authority

41. Which regions in Mindanao contributed more to the growth of domestic production?
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
Northern Mindanao
0.2
Davao Region
0.4
Soccsksargen
CARAGA
ARMM
-0.0
Source: National Statistical Coordination Board-Philippine Statistics Authority

42. Which regions are growing faster than the national economy?
AVERAGE GROWTH RATE ( )
(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
Source: National Statistical Coordination Board-Philippine Statistics Authority

43. Which regions are creating more jobs than the national economy?
AVERAGE EMPLOYMENT GROWTH RATE ( )
(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

44. MORE PRODUCTION, MORE JOBS
AVERAGE GROWTH RATE OF GROSS REGIONAL DOMESTIC PRODUCT ( )
AVERAGE EMPLOYMENT GROWTH ( )
MORE THAN AVERAGE EMPLOYMENT GROWTH
LESS THAN AVERAGE EMPLOYMENT GROWTH
MORE THAN AVERAGE OUTPUT GROWTH
NCR *
CENTRAL LUZON *
CENTRAL VISAYAS *
NORTHERN MINDANAO
DAVAO REGION
CARAGA
CAGAYAN VALLEY *
ZAMBOANGA PENINSULA
SOCCSKSARGEN *
LESS THAN AVERAGE OUTPUT GROWTH
CALABARZON *
BICOL REGION
ARMM
CAR
ILOCOS
MIMAROPA *
WESTERN VISAYAS
EASTERN VISAYAS *
Source of Basic Data: NSCB-PSA and BLES

45. MORE OUTPUT, MORE JOBS
AVERAGE GROWTH RATE OF GROSS REGIONAL DOMESTIC PRODUCT ( )
AVERAGE EMPLOYMENT GROWTH ( )
MORE THAN AVERAGE EMPLOYMENT GROWTH
LESS THAN AVERAGE EMPLOYMENT GROWTH
MORE THAN AVERAGE OUTPUT GROWTH
NCR *
CENTRAL LUZON *
CENTRAL VISAYAS *
NORTHERN MINDANAO 21
DAVAO REGION 21
CARAGA 21
CAGAYAN VALLEY *
ZAMBOANGA PENINSULA 42
SOCCSKSARGEN *
LESS THAN AVERAGE OUTPUT GROWTH
CALABARZON *
BICOL REGION 23
ARMM 43
CAR 34
ILOCOS 34
MIMAROPA *
WESTERN VISAYAS 24
EASTERN VISAYAS *
Source of Basic Data: NSCB-PSA and BLES

46. Distribution of Household Spending (2014)
Source of Basic Data: National Statistical Coordination Board-Philippine Statistics Authority

47. AVERAGE GROWTH OF HOUSEHOLD FINAL CONSUMPTION SPENDING
In which regions is household spending growing faster than the national economy?
AVERAGE GROWTH OF HOUSEHOLD FINAL CONSUMPTION SPENDING
( )
(IN %)
PHILIPPINES
5.7
1. MIMAROPA *
7.1
2. ZAMBOANGA PENINSULA *
6.9
3. CENTRAL VISAYAS *
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

48. PRODUCING AND SPENDING MORE
AVERAGE GROWTH RATE OF GROSS REGIONAL DOMESTIC PRODUCT ( )
AVERAGE GROWTH RATE OF HOUSEHOLD FINAL CONSUMPTION SPENDING ( )
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

49. GROWING AND SPENDING MORE
AVERAGE GROWTH RATE OFGROSS REGIONAL DOMESTIC PRODUCT ( )
AVERAGE GROWTH RATE OF HOUSEHOLD FINAL CONSUMPTION SPENDING ( )
ABOVE NATIONAL AVERAGE AVERAGE GDP
BELOW NATIONAL AVERAGE CONSUMPTION SPENDING
ABOVE
NATIONAL
AVERAGE
GDP
CENTRAL LUZON 21
CENTRAL VISAYAS *
NORTHERN MINDANAO *
ZAMBOANGA PENINSULA 31
DAVAO REGION 21
NCR 12
CAGAYAN VALLEY *
CARAGA *
SOCCSKSARGEN *
BELOW NATIONAL
AVERAGE GDP
ILOCOS REGION 43
MIMAROPA *
CALABARZON 34
CAR *
BICOL REGION 24
WESTERN VISAYAS 14
EASTERN VISAYAS *
ARMM
Source of Basic Data: NSCB

50. CENTRAL LUZON CENTRAL VISAYAS NORTHERN MINDANAO DAVAO REGION
Regions that grew faster than the national economy in terms of production, employment, and spending ( )
CENTRAL LUZON
CENTRAL VISAYAS
NORTHERN MINDANAO
DAVAO REGION

51. Which provinces and cities in the Philippines have good market potential?

52. TOP PROVINCES IN TERMS OF MARKET POTENTIAL
TOP TEN PROVINCES
NEXT TEN PROVINCES
1. CEBU
11. NEGROS OCCIDENTAL
2. CAVITE
12. NUEVA ECIJA
3. BATANGAS
13. ILOILO
4. BULACAN
14. SOUTH COTABATO
5. LAGUNA
15. BATAAN
6. PAMPANGA
16. ZAMBOANGA DEL SUR
7. DAVAO DEL SUR
17. QUEZON
8. RIZAL
18. BOHOL
9. MISAMIS ORIENTAL
19. LEYTE
10. PANGASINAN
20. NEGROS ORIENTAL

53. PROVINCES WITH THE BIGGEST IMPROVEMENT IN RANKING
1. BENGUET 26 21
2. TARLAC 32 29
3. NUEVA ECIJA 14 12
4. ILOILO 15 13
5. SOUTH COTABATO 16
6. ZAMBOANGA DEL SUR 18

54. PROVINCES WITH THE HIGHEST INCREASE IN MARKET POTENTIAL INDEX
INCREASE IN INDEX ( )
1. BATANGAS
0.0295
2. NUEVA ECIJA
0.0260
3. ILOILO
0.0259
4. BENGUET
0.0258
5. TARLAC
0.0193
6. MISAMIS ORIENTAL
0.0179
7. CEBU
0.0163
8. PAMPANGA
0.0150
9. CAMARINES SUR
0.0118
10. CAVITE
0.0088
11. ZAMBOANGA DEL SUR
0.0083
12. SOUTH COTABATO
0.0069
13. PALAWAN
0.0067

55. TOP REGIONAL PROVINCES
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

56. TOP REGIONAL PROVINCES
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

57. 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

58. CITIES WITH THE BIGGEST IMPROVEMENT IN RANKING
CITY
RANK IN 2013
RANK IN 2014
1. TARLAC CITY 33 26
2. TANAUAN CITY 27 21
3. STA. ROSA CITY 6 4
4. DASMARINAS CITY 15 13
5. CABUYAO CITY 17
6. SAN PABLO CITY 31 30

59. CITIES WITH THE HIGHEST INCREASE IN INDEX
CITY
INCREASE IN INDEX ( )
1. STA. ROSA CITY
0.0982
2. CAGAYAN DE ORO CITY
0.0548
3. TANAUAN CITY
0.0441
4. CALAPAN CITY
0.0298
5. DASMARINAS CITY
0.0183
6. MANDAUE CITY
0.0134
7. SAN FERNANDO CITY, PAMPANGA
0.0099
8. ILOILO CITY
0.0090
9. TALISAY CITY, CEBU
0.0059
10. TAGBILARAN CITY
0.0052

60. 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

61. 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

62. Summing up 1. NCR 1. CEBU 1. CEBU CITY 2.CALABARZON 2. CAVITE
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

63. How are Filipinos doing?

64. More than 25% of the population is still poor, but poverty incidence is slowly improving.
Source of data: Philippine Statistics Authority

65. Poverty incidence is still high, but it is slowly improving.
Source of data: Philippine Statistics Authority

66. Poverty incidence in Mindanao is the worst, but it has slowly improved.
Source of data: Philippine Statistics Authority

67. Mindanao recorded the highest decrease in poverty incidence from 2012 to 2015.
Source of data: Philippine Statistics Authority

68. Poverty Incidence in the NCR and Luzon: 2012 and 2015 (headcount, in %)
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

69. Poverty incidence in the Visayas: 2012 and 2015 (headcount, in %)
CHANGE
PHILIPPINES
27.9
26.3
-1.6
WESTERN VISAYAS
31.7
30.5
-1.2
CENTRAL VISAYAS
33.6
-3.1 *
EASTERN VISAYAS
45.4
47.3
1.9
Source: Philippine Statistics Authority

70. Poverty incidence in Mindanao: 2012 and 2015 (headcount, in %)
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

71. Faster production growth, greater decrease in poverty incidence?
AVERAGE GROWTH RATE OF GROSS REGIONAL DOMESTIC PRODUCT ( )
CHANGE IN POVERTY INCIDENCE (2012 AND 2015)
GREATER CHANGE IN POVERTY INCIDENCE RELATIVE TO THE PHILIPPINES
LESSER CHANGE IN POVERTY INCIDENCE RELATIVE TO THE PHILIPPINES
MORE THAN AVERAGE OUTPUT GROWTH
CAGAYAN VALLEY
CENTRAL VISAYAS
ZAMBOANGA PENINSULA
NORTHERN MINDANAO
DAVAO REGION
NCR
CENTRAL LUZON
SOCCSKSARGEN
CARAGA
LESS THAN AVERAGE OUTPUT GROWTH
CAR
BICOL REGION
ARMM
MIMAROPA
ILOCOS REGION
CALABARZON
WESTERN VISAYAS
EASTERN VISAYAS
Source of Basic Data: NSCB-PSA

72. Faster job growth, greater decrease in poverty incidence?
AVERAGE GROWTH RATE OF EMPLOYMENT ( )
CHANGE IN POVERTY INCIDENCE (2012 AND 2015)
GREATER CHANGE IN POVERTY INCIDENCE RELATIVE TO THE PHILIPPINES
LESSER CHANGE IN POVERTY INCIDENCE RELATIVE TO THE PHILIPPINES
MORE THAN AVERAGE JOB GROWTH
BICOL REGION
CENTRAL VISAYAS
NORTHERN MINDANAO
DAVAO REGION
ARMM
NCR
CENTRAL LUZON
CALABARZON
CARAGA
LESS THAN AVERAGE JOB GROWTH
CAR
MIMAROPA
CAGAYAN VALLEY
ZAMBOANGA PENINSULA
EASTERN VISAYAS
ILOCOS REGION
WESTERN VISAYAS
SOCCSKSARGEN
Source of Basic Data: NSCB-PSA

73. 11 of the 20 poorest provinces in the Philippines are in Mindanao.
TOP 10 PROVINCES
POVERTY INCIDENCE (2015,%)
NEXT 10 PROVINCES
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
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

74. CHANGE (percentage points)
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 ↑
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

75. 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

76. TOP 3 REGIONS WITH HIGH POVERTY INCIDENCE (2012,IN %)
In which regions is poverty incidence highest for different groups of individuals?
SECTORS
TOP 3 REGIONS WITH HIGH POVERTY INCIDENCE (2012,IN %)
FISHERMEN
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
YOUTH
ARMM, E. VISAYAS, SOCCSKSARGEN
EMPLOYED
UNEMPLOYED
ARMM, E.VISAYAS, N. MINDANAO
MIGRANTS AND FORMAL SECTOR WORKERS
ARMM, SOCCSKSARGEN, BICOL
SENIOR CITIZENS
ARMM, SOCCSKSARGEN, E.VISAYAS
INDIV. LIVING IN URBAN AREAS
ARMM, SOCCSKSARGEN, CARAGA
Source of basic data: Philippine Statistics Authority

77. What are the prospects for economic growth this year?

78. Production this year could grow faster than last year.
Source: Philippine Statistical Authority

79. Strong first quarter growth in 2016 relative to 2015
Source: Philippine Statistical Authority

80. Rising quarterly growth trend since the first quarter of 2015
Source: Philippine Statistical Authority

81. 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

82. Downside Risk Factors La Niña Calamities, natural disasters
Geopolitical tensions
(Middle East, Asia)
Rising cost of petroleum products, electricity, and water
Negative investor sentiments and perceptions
Economic performance of developed countries
Weak global economic outlook
Growth slowdown in China

83. 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

84. Will family and friends remit more dollars this year?
Source: Bangko Sentral ng Pilipinas

85. Growth of remittances will continue to be slower in 2016.
Source of data: Bangko Sentral ng Pilipinas

86. But encouraging trend for the first four months of 2016.
Source of data: Bangko Sentral ng Pilipinas

87. 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

88. 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
Sustained increase in remittances and tourism revenues
strengthen
Inflow of investments due to sustained strong economic performance of the country

89. Will the peso be stronger or weaker?

90. Will we be paying more for the goods and services we buy?
Source: National Statistical Coordination Board-Philippine Statistics Authority

91. If reserves continue to grow and the peso does not drastically lose value, inflation may remain stable.
Source: Bangko Sentral ng Pilipinas and National Statistical Coordination Board

92. 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

93. 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,

94. Will domestic interest rates continue to be low?
Source: Bangko Sentral ng Pilipinas

95. Will domestic interest rates continue to be low?
FACTORS
PRESSURE ON INTEREST RATES
Inflation rate
relatively low and stable ↓
Domestic Liquidity
positive growth, sufficient level
Government deficit
manageable levels
Intermediation Cost
relatively stable
Monetary Policy of the USA
higher interest rate regime ↑

96. Fearful forecast (2016) ECONOMIC INDICATOR 2016 forecast
GROSS DOMESTIC PRODUCT
6.0 – 6.5%
INFLATION RATE
1.9 – 2.3%
PESO-DOLLAR RATE
45 – 47 PESOS: 1 DOLLAR
AVERAGE BANK LENDING RATE
5.5 -6%

97. What are the prospects for growth in Mindanao this year?

98. When the national economy grows, some Mindanao regions grow with it.

99. AVERAGE GROWTH RATE (2012-2014)
Some regions in Mindanao have been growing faster than the national economy
AVERAGE GROWTH RATE ( )
(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
Source of data: National Statistical Coordination Board-Philippine Statistics Authority

100. 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.)

101. What could negatively affect Mindanao’s economic growth prospects?
La Niña, calamities, natural disasters
Energy-related issues
Stubborn negative peace and order perceptions

102. 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

103. How can Mindanao cooperatives ride the wave of growth?

104. 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.

105. 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.

106. 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.

107. 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?

108. PART 2 ECONOMIC INTEGRATION, SUSTAINABLE DEVELOPMENT GOALS, AND COOPERATIVES

109. ASEAN Economic Community and Cooperatives

110. What is the ASEAN Economic Community?
One pillar of the ASEAN Community agenda
Aims to broaden and deepen economic integration among ASEAN member-countries

111. What are the four pillars of the 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

112. How will the four pillars of the ASEAN Economic Community be achieved?
FOUR PILLARS OF AEC
LIBERALIZATION OF TRADE IN GOODS
LIBERALIZATION OF TRADE IN SERVICES
LIBERALIZATION OF INVESTMENTS

113. Are cooperatives sufficiently covered by the 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.

114. 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

115. LEVEL UP QUANTITY AND QUALITY CREATE AND INNOVATE LINK AND INTEGRATE
What are some possible broad responses of cooperatives to the ASEAN Economic Community?
LEVEL UP QUANTITY AND QUALITY
CREATE AND INNOVATE
LINK AND INTEGRATE
PARTNER AND COLLABORATE
COLLECT AND DISSEMINATE

116. Sustainable Development Goals and Cooperatives

117. 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 ( )
Sustainable development goals address the root causes of poverty and the universal need for inclusive growth and development

119. What can cooperatives contribute to the attainment of sustainable development goals?
Can cooperatives contribute? (Yes/No)
How?
1. No poverty
2. Zero hunger
3. Good health and well-being
4. Quality education
5. Gender Equality
6. Clean water and sanitation
7. Affordable and clean energy
8. Decent work and economic growth

120. What can cooperatives contribute to the attainment of sustainable development goals?
Can cooperatives contribute? (Yes/No)
How?
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

121. What can cooperatives contribute to the attainment of sustainable development goals?
Can cooperatives contribute? (Yes/No)
How?
16. Peace and justice, strong institutions
17. Partnerships for the goals

122. School of Economics, UA&P
A TWO-PART BRIEFING ON THE ECONOMY, ECONOMIC INTEGRATION, SUSTAINABLE DEVELOPMENT, AND COOPERATIVES
Thank you!
Cid L. Terosa, Ph.D.
School of Economics, UA&P
24 June 2016