Business Monitor International


Philippines Business Forecast Report

Published 22 July 2014

  • 49 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Philippines Business Forecast Report

Core Views

 We continue to hold a positive outlook for the Philippine economy, and are forecasting for real GDP growth to come in at 6.3% in 2014. However, tighter monetary policy in 2015 is likely to cause real GDP growth to ease to 6.0%.

•We continue to see the Bangko Sentral ng Pilipinas raise its benchmark interest rate by another 50 basis points to 4.50% in 2015, owing to continued price pressures emanating from a potential electricity shortage in Luzon and likely interest rate normalisation in the US in the coming year.

•Ongoing fiscal consolidation efforts by the Philippine government will ensure a sustainable budgetary trajectory over the coming years. We forecast for the country's budget deficit to narrow to 0.8% of GDP in 2014 and 0.6% in 2015, from 1.4% in 2013. However, the lacklustre fiscal spending will be a drag on growth.

•The Philippine peso should stay largely resilient despite USD strength. We are forecasting for the unit to average PHP44.50/USD in 2014 and PHP43.71/USD in 2015. A combination of still-positive economic growth outlook, strong foreign inflows and an improving external position should provide structural support to the peso.

Major Forecast Changes

•We have revised our 2015 benchmark interest rate forecast to 4.50%, from our previous estimate of 4.00%. 

•We have revised our forecast for the Philippine peso to average PHP44.50/USD in 2014, from our earlier estimate of PHP44.00/USD.

Key Risks To Outlook

•The Philippines remains at risk of substantial hot money outflows in the event of acute global credit or financial market stresses.

•Growth slowdowns in both China and Japan, to which the Philippines is heavily exposed in both investment and trade terms, could undermine the country's strong domestic growth story should they be more severe than expected.

•The largest risk to our medium-term peso view comes from the potential for a devaluation of the Chinese yuan by the People's Bank of China in a bid to support...

Table of Contents

Executive Summary
5
Core Views
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
Sino-Philippine Maritime Dispute: Geopolitical And Economic Implications
8
Table: Political Overview
8
Long-Term Political Outlook
9
Prospects For Improving Governance
9
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Ratings
13
Economic Activity
14
Still Positive Despite Disappointing Q114 GDP Print
14
table: Economic Activity
14
Fiscal Policy
15
Fiscal Position To Remain On A Sound Footing
15
table: Fiscal Policy
16
Monetary Policy
17
Rate Hikes In Sight Amid Rising Inflation
17
table: Monetary Policy
17
Exchange Rate Policy
19
Peso To Retain Recent Gains
19
table: CURRENCY FORECAST
19
table: Current Account
20
Chapter 3: 10-Year Forecast
21
The Philippine Economy To 2023
21
Uncovering A Forgotten Gem
21
table: Long-Term Macroeconomic Forecasts
21
Chapter 4: Business Environment
25
SWOT Analysis
25
BMI Business Environment Risk Ratings
25
Business Environment Outlook
26
Institutions
26
Table: BMI Business And Operation Risk Ratings
26
Table: BMI Legal Framework Rating
27
Tab le: Lab our Forc e Qua lit y
28
Infrastructure
29
TABLE: ASIA - ANNUAL FDI INFLOWS
29
Market Orientation
30
TABLE: Top Export Destinations (USDMN)
30
Operational Risk
31
Chapter 5: Key Sectors
33
Pharmaceuticals & Healthcare
33
table: Pharmaceutical Sales, Historical Data & Forecasts
34
table: Healthcare Expenditure Trends, Historical Data & Forecasts
35
table: Private Healthcare Expenditure Trends, Historical Data & Forecasts
36
Telecommunications
37
table: Government Healthcare Expenditure Trends, Historical Data & Forecasts
37
table: Telecoms Sector - Mobile - Historical Data & Forecasts
38
TABLE: Telecoms Sector - Wireline - Historical Data & Forecasts (Philippines 2011-2018)
39
Other Key Sectors
41
table: Oil & Gas Sector Key Indicators
41
table: Defence & Security Sector Key Indicators
41
table: Infrastructure Sector Key Indicators
41
table: Food & Drink Sector Key Indicators
42
table: Autos Sector Key Indicators
42
table: Freight Key Indicators
42
Chapter 6: BMI Global Assumptions
43
Global Outlook
43
Global Recovery Still On Track
43
Table: Global Assumptions
43
Table: Developed States, Real GDP GrowtH, %
44
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
44
Table: Emerging Markets, Real GDP Growth, %
45

The Philippines Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Philippines and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..

An influential new analysis of Philippines' economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Philippines' economic and industry growth through end-2017.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Philippines' country risks against regional peers using BMI's country comparative Risk Ratings system.
  • Evaluate external threats to doing business in Philippines, including currency volatility, the commodity price boom and protectionist policies.

The Philippines Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the Philippine economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for Philippines through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Philippines Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Ratings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Philippines and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Philippines, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Philippines over the next 5-years?

BMI's Philippines country Risk Ratings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Philippine Market - Political Strengths, Weaknesses, Opportunities and Threats facing Philippines.
  • Political Stability and Risk Assessment - BMI's Risk Ratings assess explicit short- and long-term risks to political stability; latest ratings, rankings and trends for Philippines' risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark Philippines' risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Ratings with SWOT Analysis - Business environment Risk Ratings for Philippines, benchmarked against ratings for regional neighbours.

Country Competitiveness - Competitiveness of Philippines' business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Ratings.

Key Sector Outlook

Which industry sectors in Philippines will grow fastest, and where are the major investment opportunities in the market?

BMI's identifies investment opportunities in Philippines' high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry with developments over 2008-2012, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2013-2017, using BMI's proprietary industry modeling technique, which incorporates all key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across, and within, each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

secure
Benefit from discounts when you add multiple products to your basket
2 Products SAVE 10%
3 Products SAVE 15%
4 Products SAVE 20%
5 Products SAVE 25%
6 Products SAVE 30%
7 - 20 Products SAVE 35%
21 Products or more SAVE 40%

Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express