GDP RRL
GDP RRL
real gross domestic product (GDP) growth on average of 6.4% from 2010 to 2019. Despite
external headwinds, and a series of natural calamities, the country has consistently grown. With
the continuous increase in urbanization, growing middle class and a large amount of youth in the
population, enhanced the economy to constant growth. Another indication is the decline in
poverty rates and its Gini coefficient. The poverty rate decreases from 23.3% in 2015 to 16.6%
in 2018 while the Gini coefficient declined from 44.9 to 42.7 over the same period [ CITATION
Wor21 \l 1033 ].
During the 1970s to 2000s the Philippines was considered the “sick man” of Asia, due to
the low economic growth in comparison with Southeast & East Asian neighbors. The resurgence
happened in 2010 onwards mainly due to the increase in private consumption, on the demand
side, and services, on the supply side. The private consumption is fueled partly by Overseas
Filipino Workers (OFW) remittances over two-thirds of GDP and services over one-half of GDP.
Moreover, about 1 million new employment was generated between Oct 2013 & Oct 2014.
While the unemployment rate decline, the underemployment remains stubbornly high[ CITATION
Bal15 \l 1033 ].
One of the obstacles for the constant economic growth of the Philippines is the
earthquakes, and volcanic eruption. A series of disasters has caused substantial damage to
agriculture, infrastructure, and the economy, as well as a huge loss of lives. An example is the
aftermath of the typhoon Yolanda in late 2013, which damaged 1.1 million houses, destroyed 33
million coconut trees which is a major source of livelihoods, and disrupted the livelihoods of 5.9
million workers in Visayas. The overall damage is estimated at $5.8 billion [ CITATION Aba2013 \l
1033 ]. This made a small disruption on the economic growth as the Philippine GDP constant
growth slowed in the first quarter of 2014. On the contrary, after recovering from the disaster,
the strong performance of industry sector mainly by manufacturing, construction and supported
by the trade, real estate, renting & business activities, and transport accelerated the 2014 GDP of
the Philippines with a 6.9% compared to year 2013 with 6.3% during the fourth quarter[ CITATION
GOV15 \l 1033 ]. Looking at the supply side, the services sector continued to be the main driver of
growth, contributing 3.8 percentage points to overall growth, while agriculture remained weak.
On the demand side, growth continued to be led by private construction, and to some extent,
durable equipment, and infrastructure spending. Furthermore, the recovery of net exports after 5
The domestic demand in the year 2015 to 2016 remained robust. Considering that the
inflation is under control, and the decreasing oil prices leads to lower inflation. This stretches a
further boost to consumer spending. Public finances are healthy, supporting continued
manageable foreign debt of 18% of GDP and the 65% of exports of goods and services in 2016
[ CITATION Atr16 \l 1033 ]. On the demand side, remittances have long been a driver of
consumption and of the economy’s growth. While on the supply side, the predominant services
finance, real estate, and tourism industries. In recent years, however, the country has seen new
opportunities for economic growth in an upsurge in investment and in the resurgence of the
The steady growth in the past few decades outpaced the population. Though poverty has
persisted, sustained economic expansion has led to rising household incomes. Between 1960 and
2015, average income has grown by a factor of 11: income per capita has grown from US$ 254.4
in 1960 to US$ 2,870.5 in 2014. This translates to an improved standard of living for many
Filipinos, with more people now earning enough to spend on an ever-increasing variety of goods
and services ranging from smartphones and movies to automobiles and housing. The relationship
between economic growth and average income is universal – for as long as the economy keeps
growing faster than the population, average incomes will rise over time. The positive prospects
of the Philippines for economic growth and the rise in per capita incomes will have implications
on consumption. Naturally, the two are positively related in that those who earn more have
References
Aban, I. (2013). Philippines 'more and more vulnerable' to disasters - officials. Earth Journalism Network.
Retrieved from https://earthjournalism.net/stories/philippines-more-and-more-vulnerable-to-
disasters-officials
Atradius. (2016). Atradius Country Report: Asia Pacific. Atradius. Retrieved from file:///C:/Users/Jay
%20Isidro/Downloads/Country-Report-Asia-Pacific-2016-CRAPAC1601EN.pdf
Balisacan, A. (2015). The State of the Philippine Economy. Makati: Ayala-UPSE Economic Forum.
Retrieved from https://econ.upd.edu.ph/ayala-upse/wp-content/uploads/2015/02/Ayala-UPSE-
Forum_The-State-of-the-Economy_29Jan2015_final2a.pdf
KPMG. (2017). Philippine Consumer Market Report: 2017 Investment Guide. KPMG R.G. Manabat & Co.
Retrieved from
https://home.kpmg/content/dam/kpmg/ph/pdf/InvestmentGuide/KPMGPHPhilippineConsumer
MarketReport.pdf
World Bank. (2014). Philippine Economic Update, August 2014 edition. Retrieved from The World Bank:
https://www.worldbank.org/en/country/philippines/publication/philippines-accelerating-public-
investment-to-sustain-growth-that-benefits-the-poor#:~:text=Economic%20and%20policy
%20developments%20%E2%80%A2%20After%20recording%20strong,points%20to%20overall%