The Philippine economy has experienced strong growth in recent years, averaging 6.3% from 2010-2014. Structural changes are occurring as the agriculture and industry sectors grow at higher rates than services. To sustain growth, infrastructure projects must be implemented, legislation passed, and downside risks from external factors and domestic disasters addressed. Key opportunities include US economic recovery, ASEAN integration, and lower oil prices. The outlook for 2015-2016 is for continued strong growth of 7-8% annually if momentum is maintained.

1. THE PHILIPPINE ECONOMY
Prospects and Outlook for 2015-2016
ARSENIO M. BALISACAN
Socioeconomic Planning Secretary and Director-General
NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY
FOCAP Flagship & Year- Opening Annual Forum
11 February 2015

2. 2015
2016
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
GDP in 2000 billion Php, 1960-2016 Target
Real GDP growth
6.3% (2010-2014)
6.1% (2014)
7.2% (2013)
6.8% (2012)
Source: PSA
Structural break of
potential real GDP
at around 2009
2
The Philippine economy is on a high growth trajectory at
the beginning of the current decade.

3. 0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
1990-1999 2000-2009 2010-2014
Supply side
Agriculture Industry Services
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
Demand side
Consumption Government
Investment Net exports
2.8%
4.5%
6.3%
2.8%
4.5%
6.3%
Source: NEDA
Ave. growth
3
Structural changes in the economy are taking place.

4. Selected Indicators
Actual
2013
Actual
2014
Annual Projections
2015 2016
Real GDP Growth (%) 7.2 6.1
7.0-8.0 7.0-8.0
Unemployment rate (in %) 7.2* 6.8 (FY)* 6.7 6.6
Underemployment rate
(% of employed)
19.0* 18.4 (FY)* 18.0 17.0
Poverty Incidence
(% of population)
24.9
(1st Sem 2013) 22.5 19.0
Our Development Targets
*Estimates exclude Region 8; computation for FY'14 employment generation excludes Region 8 in Jan 2014 round of
the LFS

5. The vibrant view on the Philippine economy is also shared
by the private sector.
Source: Various sources, as of 28 January 2015
Consensus Forecast (in %)
2015 2016 2017
ADB 6.4 - -
Barclays 6.5 - -
Citi 6.3 - -
Fitch rating 6.2 6.0 -
Goldman Sachs - - -
HSBC 5.6 6.1 -
IMF 6.6 6.4 -
Metrobank Research - - -
Moody’s 6.5 - -
Nomura 6.6 - -
Standard and Poor’s 6.3 6.0 5.6
Standard Chartered Bank 7.0 - -
UNESCAP 6.0 - -
WB 6.5 6.5 -
Median 6.5 6.1 5.6
Mean 6.4 6.2 5.6

6. • Continue the “rebalancing” process in order to reduce
vulnerability to regional/global shocks and generate more and
higher-quality jobs
• Continue addressing key infrastructure constraints
• Keep strong focus on improving the provision of services for
health, education, and disaster-risk reduction
• Pass vital legislation that will help the economy to reach its
highest potential
6
How do we keep the momentum in 2015-2016?

7. The implementation of key infrastructure projects is vital in
boosting growth this year.
NEDA Board-approved Projects under the Aquino Administration (as of end-Jan 2015)
Source: NEDA
Projects by Status No. of Projects Amount
(PhP billion)
Completed Projects 7 17.6
Ongoing/ Under Implementation 58 555.4
For Implementation 28 505.9
Total 93 1,079
(USD24.31 B)
Source of Financing Number of Projects Total Amount
(PhP billion)
PPP
Ongoing 9 193.3
For implementation 14 435.0
ODA
Completed 7 17.6
Ongoing 37 318.0
For implementation 9 47.0
Local
Financing
Ongoing 12 44.1
For implementation 5 23.9
Status of Projects according to Funding Source

8. Priority legislative measures to sustain growth and make
it more inclusive.
• Bangsamoro Basic Law
• Competition Law
• Fiscal Incentives Rationalization
• Rationalization of Mining Revenues
• Removing investment restrictions in specific laws cited in the Foreign Investment
Negative List (FINL)
• Amendment to BOT Law
• Amendment to BSP Charter
• Customs and Tariff Modernization Act (CMTA)
• Water Sector Reform Act
• Amendment to Cabotage Law
• National Land Use Act
• Land Administration Reform Act
• Acquisition of Right-of-Way of Government Infrastructure Projects
8

9. • Normalization of US monetary policy
• Slowdown in large emerging economies, particularly China
• Weakness in the Euro area
• Recession in Japan
External
Domestic
• Disasters arising from natural hazards (e.g., typhoons,
prolonged monsoon rains, El Ñino)
• Disruptions in the peace process
• Delays in infrastructure and reconstruction projects
• Logistics bottlenecks
• Thin power reserves
We are aware of the downside risks to growth in 2015...

10. … and mindful of opportunities
• US economic recovery
• Hosting of APEC in 2015
• Implementation of ASEAN Economic Integration at the end
of 2015
• Decline of global oil prices
• Recent credit rating upgrade
• Passage of the Bangsamoro Basic Law

11. THE PHILIPPINE ECONOMY
Prospects and Outlook for 2015-2016
ARSENIO M. BALISACAN
Socioeconomic Planning Secretary and Director-General
NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY
FOCAP Flagship & Year- Opening Annual Forum
11 February 2015