1. The Philippine Economy on the Road to Recovery
Dr. Bernardo M. Villegas

2. No Great Depression Black Thursday 1929 Stock Market Crash
Passive Federal Reserve System
Ignorance of Keynesian Pump Priming
Panic in the Banking Sector
Unemployment Rate of 25%
Complete Dominance of the US Economy in the World
World Financial Market Illiquid

3. No Great Depression Black Monday 2008 Real Estate Bubble
Proactive Federal Reserve System
US Government Pump Priming
No Panic in the Banking Sector
No Crash in the Stock Market
Unemployment Rate Manageable
Countervailing Power of Emerging Markets
Liquidity of Sovereign Funds
Massive intervention of European governments

4. Traditional Engines of Growth: GDP Growth Rates of Major Economies
F – forecasts
Source: World Economic Outlook Database, IMF, April 2009; WEO Update July 2009

5. Traditional Engines of Growth: GDP Growth Rates
F – forecasts
Source: World Economic Outlook Update, IMF, July 2009

6. The Most Powerful Economies in the World
*n/a – not available
Source: IMF, World Economic Outlook Database, April 2009; World Economic Outlook Update, July 2009

7. Asia: The Most Dynamic Region
GDP Growth Rates *
*Upgraded by IMF to -1.8 in early August 2009

8. Emerging Engines of Growth
BRICA
Emerging Engines of Growth

9. Emerging Engines of Growth
The Next Eleven
Emerging Engines of Growth

10. Asia: The Most Dynamic Region
Selected Sunrise Industries in Asia
Agribusiness
Mining
Triple Ts: Transport, Telecom, and Tourism
Infrastructures
Automobiles
Consumer durables
IT-enabled and IT services
Logistics and retailing
Health care and medical tourism
Education
Construction and real estate
Four Fs: Food, Fashion, Furniture, Fun

11. The Philippine Economy
Threats
Net factor income may be slightly lower as the recession in OFWs’ host countries will affect remittances and deployment growth
Slowdown in consumer spending
Industry sector on a slowdown in 2009 and 2010
Slowdown in exports
Higher government deficit
Higher trade deficit
Depreciating Peso

12. The Philippine Economy
Opportunities
Increase in domestic tourism
Expansion in mining and energy investments
Pump priming in infrastructure spending
Expansion in low- and medium-costs housing and office buildings
Increase in demand for BPO services
Medical tourism and retirement villages

13. MACROECONOMIC FORECASTS
The Philippine Economy
MACROECONOMIC FORECASTS
98a
07a
08a
09f
10f
Inflation (ave)
9.7
2.8
9.3
3.3
4.0
Peso/$ Rate
41.1
46.1
44.5
49.50
51.50
$ Reserves (Months of Imp)
5.9
5.5
6.8
GDP Growth
-0.6
7.1
4.5
2.5
Source: UA&P/BEC Estimates, June 24, 2009

14. MACROECONOMIC FORECASTS
The Philippine Economy
MACROECONOMIC FORECASTS
98a
07a
08a
09f
10f
Consumption
3.5
5.7
4.7
3.3
4.0
Government
-1.9
6.1
5.9
6.5
6.0
Investments
-16.3
12.4
1.7
-10.0
GDP Growth
-0.6
7.1
3.9
2.5
Source: UA&P/BEC Estimates, June 24, 2009

15. FINANCIAL MARKETS FORECASTS
The Philippine Economy
FINANCIAL MARKETS FORECASTS
98a
07a
08f
09f
10f
Inflation (ave)
9.7
2.8
9.3
3.3
4.0
91-Day T-bills
15.3
3.6
4.6
4.4
10-yr T-Bond (ave) -
7.1
8.1
7.5
7.6
PhP/$ Rate
41.1
46.1
44.5
49.50
51.50
Source: UA&P/BEC Estimates, June 24, 2009

16. The Philippine Economy
INDUSTRY FORECASTS
Source: UA&P-BEC Estimates, June 18, 2009

17. AGRICULTURAL FORECASTS
The Philippine Economy
AGRICULTURAL FORECASTS
Source: *NSCB; UA&P-CFA Estimates, July 14, 2009

18. Estimated 2009 Gross Domestic Regional Product (GRDP)
GRDP (P)
Share (%)
Per Capita ($)
Per Capita Rank
METRO MANILA
2.9 Trillion
35.9%
5,293 1
CALABARZON
895.8 Billion
11.1%
1,610 6
CENTRAL LUZON
617.8
7.6%
1,296 9
CENTRAL VISAYAS
572.8
7.1%
1,738 5
WESTERN VISAYAS
564.3
7.0%
1,586 7
NORTHERN MINDANAO
400.3
5.0%
1,965 3
DAVAO
371.8
4.6%
1,804 4
SOCCSKSARGEN
274.8
3.4%
1,443 8
ILOCOS
226.2
2.8%
932 13
BICOL
209.8
2.6%
782 16
ZAMBOANGA PENINSULA
195.3
2.4%
1,194 11
EASTERN VISAYAS
183.9
2.3%
882 15
MIMAROPA
176.3
2.2%
1,261 10
CORDILLERA
163.8
2.0%
2,065 2
CAGAYAN VALLEY
144.8
1.8%
913 14
CARAGA
121.6
1.5%
1,015 12
ARMM
69.3
0.9%
418 17
Philippines
8.1 Trillion
100.0%
1,834
Slide 3: GRDP
Source: NSCB, BEC estimates 18

19. Growth Rates By Region (%)
PHILIPPINES
4.29
MIMAROPA
*6.08
NORTHERN MINDANAO
*5.56
CAR
5.46
DAVAO REGION
*5.12
CENTRAL VISAYAS
5.11
METRO MANILA
4.85
SOCCSKSARGEN
*4.77
ZAMBOANGA P.
*4.62
CAGAYAN VALLEY
4.59
WESTERN VISAYAS
4.45
ILOCOS
SOUTHERN LUZON
*4.05
ARMM
*3.97
BICOL
3.84
EASTERN VISAYAS
3.82
CALABARZON
*3.65
CENTRAL LUZON
*3.35
CARAGA
**3.06
*average of only due to regional reconfiguration **
Source: NSCB, NSO , BEC Estimates, Growth rates from

20. The Philippine Economy on the Road to Recovery
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