The Philippine economy is driven by industries like construction, tourism, manufacturing and services. Strong consumer demand, a vibrant labor market and remittances have supported economic dynamism. However, GDP contracted in 2020 due to the COVID-19 pandemic's impact on consumption, investment, exports, tourism and remittances. While growth rebounded in 2021-2022, economic challenges remain from unmanaged population growth and inequality constraining poverty reduction.

1. Philippine Economy
Jupi National High School
Jupi Gubat Sorsogon
S.Y. 2022-2023
GROUP 1

2. The Philippines is one of
the most dynamic
economies in the East Asia
Pacific region. With
increasing urbanisation, a
growing middle class, and
a large and young
population.
Philippine
Economy
The Philippines’ economic
dynamism is rooted in
strong consumer demand
supported by a vibrant
labour market and robust
remittances.
Business activities are
buoyant with notable
performance in the services
sector including the business
process outsourcing, real
estate, and finance and
insurance industries.
Sound economic
fundamentals and a
globally recognised
competitive workforce
reinforce the growth
momentum.
Having sustained average
annual growth of 6.4 percent
between 2010-2019 from an
average of 4.5 between 2000-
2009, the country is on its way
from a lower middle-income
country to an upper middle-
income country in the near
term.

3. The industry drivers of the Philippine economy
are the construction, tourism, manufacturing
and services industries. Within the
manufacturing industry, petroleum, transport
equipment, beverage industries, and food are
the top contributors to economic growth.
Due to the COVID-19 pandemic,
economic growth contracted in 2020,
driven by significant declines in
consumption and investment growth,
and exacerbated by the sharp
slowdown in exports, tourism and
remittances.
However, economic growth is
expected to rebound gradually in
2021-2022 with more robust
domestic activity bolstered by
greater consumer and business
confidence and the public
investment momentum.

4. GDP GNP
Gross domestic product (GDP) is the
value of the finished domestic
goods and services produced within
a nation's borders.
Gross national product (GNP) is the
value of all finished goods and
services owned by a country's
citizens, whether or not those goods
are produced in that country.
GDP and GNP are two of the most commonly used measures
of a country's economy. Both represent the total market value
of all goods and services produced over a certain period.
However, they are calculated in slightly different ways.

5. The Philippines economy has rebounded strongly
during 2022 from the negative impact of the
COVID-19 Delta wave that hit the nation in the
second half of 2021. In the third quarter of 2022,
GDP growth was up 7.6% year-on-year (y/y), after
rising by 7.5% y/y in the second quarter. The
latest S&P Global Philippines Manufacturing PMI
reached a six-month high in December 2022,
signaling sustained growth across the Philippines
manufacturing sector. Continued rapid GDP
growth of around 5.6% y/y is expected in 2023,
helped by continued strong private consumption
spending, an upturn in government infrastructure
spending and improving remittance inflows.

6. Over the decade ahead, rapid economic
growth is forecast for the Philippines
economy. By 2034 the Philippines is set
to join the ranks of a small group of
countries in the Asia-Pacific region that
have a GDP exceeding one trillion dollars.
This will result in a significant
transformation of the structure of the
Philippines economy, with substantial
expansion in the size of the domestic
consumer market. This will also help to
drive foreign direct investment inflows
into the Philippines, as multinationals
build up their local presence in a wide
range of manufacturing and service
sector industries.

7. Philippine population is one
of the fastest growing
countries in the world. It is
estimated that 3,000 Filipino
babies are born every day,
100,000 every month, or one
million a year to round up the
figures.
Population explosion is considered
as one of the undisputable alarming
obstacles that stand on the path of
the less developed countries. The
Philippines belong to the group of
these "less developed countries."
And as we all know, the growth of
population in our country is
unstoppable.

8. The Impact of
COVID-19 in the
Philippines
Economy
Impact on the Philippines GDP
The pandemic caused the Philippines’ economy to
decline to its lowest level since World War II, with GDP
decreasing by 9.5% in 2020. It’s the worst drop since
records began in 1947, and it’s also the first time the
economy has shrunk since 1998, when it contracted by
0.5%. When the tightest lockdown was implemented in
the second quarter of 2020, GDP fell as low as -16.9%.
Foreign Direct Investments (FDI)
The economic impact of the coronavirus pandemic reduced foreign direct investment
(FDI) by 24.6% to $6.5 billion in 2020, down from $8.7 billion in 2019. Since the peak
in 2017, FDI has dropped for the third year in a row. To boost the economy, the
government is relying on foreign investment, and hopes to entice foreign investors to
invest in the Philippines, using legislative measures such as corporate tax cuts.

9. The Impact of
COVID-19 in the
Philippines
Economy
Debt
As a result of the COVID-19 crisis, the
Philippines’ national debt increased by 26.7% to
P9.7 trillion in 2020. As of the end of January
2021, this had risen to P10.3 trillion, thanks to
the government’s decision to take out a new
bridge loan from the BSP (Bangko Sentral ng
Pilipinas, or Philippine Central Bank) to cover its
financial obligations.
Revenue fell by 9% in 2020 due to rising
expenses.

10. The Impact of
COVID-19 in the
Philippines
Economy
Debt
The Bureau of Internal Revenue’s collections fell
by 10.3%, and the Bureau of Customs’
collections fell by 14.7%, resulting in an 11.4%
reduction in tax revenues. The Philippine
government faced a P1.37-trillion budget deficit
in 2020 due to higher expenses and decreased
revenue.

11. The Impact of
COVID-19 in the
Philippines
Economy
Impact on Businesses
Between April and July 2020, 88% of
businesses reported a drop in sales, and
between July and November 2020, 67%
reported a drop in sales. The biggest cause of
decreased sales was limited operation (58%)
and customers’ inability to visit brick-and-
mortar establishments (38%).

12. The Impact of
COVID-19 in the
Philippines
Economy
Impact on Businesses
A high number of businesses reported severe
liquidity problems, with many claiming to be
cash-strapped and behind on payments. 66% of
businesses lacked sufficient cash to cover all
costs and liabilities, such as wages, suppliers,
taxes, and loan repayment, for more than a
month. 48% of businesses were in default.

13. The Impact of
COVID-19 in the
Philippines
Economy
Employment
According to the Philippine Statistics Authority,
the annual unemployment rate in 2020 was
10.3% or 4.5 million unemployed Filipinos. Since
April 2005, this is the highest annual
unemployment rate ever recorded. Sadly, the
problem appears to be worsening – according to
the PSA, around 4 million Filipinos were
unemployed in January 2021. This is more than
the 3.8 million people who were unemployed in
October 2020 and the 2.4 million who were
unemployed in January 2020.

14. The Impact of
COVID-19 in the
Philippines
Economy
Employment
Meanwhile, in January 2021, the number of
underemployed – employed people who
expressed a need for more hours of work – is
estimated at 6.6 million, or 16% of the total
employed population. This underemployment rate
is greater than the 14.4% rate in October 2020 and
the 14.8% rate in January 2020.

15. Filipino Income Class
The study by Jose Albert, Angelo
Santos, Jana Vizmanos, conducted
in 2018, divides the social classes
into poor, low-income but not poor,
lower-middle, middle, upper-
middle, upper-middle but not rich,
and rich. The brackets were
determined depending on pooled
monthly income.

16. Filipino Income Class
The largest income group in terms
of households and persons are the
low income (but not poor),
while—no surprise—the rich made
up the least with 143,000
households and 360,000 persons.
See what makes a Filipino poor,
middle class, or rich below.

17. On September 17, several senators
asked the National Economic and
Development Authority (NEDA) to
create a new economic classification
system to help policymakers with
several government programs. With
the coronavirus pandemic and
increasing poor households, the PIDS'
study needs to be updated.
There are [a total of] 26 million
families as of the latest projections.
Out of the 26 million, 18 million are
low-income—low-income meaning
below the minimum wage of their
region but not necessarily poor
because the government defines the
poor as those below the poverty
threshold.

18. Economic growth has gone through boom and bust
cycles, and recent episodes of moderate economic
expansion have had limited impact on the poor. Great
inequality across income brackets, regions, and
sectors, as well as unmanaged population growth, are
considered some of the key factors constraining
poverty reduction efforts.

19. May Esquierra
Precious Lagman
Jennifer Escote
Lorenda Dig
July Esllera
Clark Abogado
Group 1

20. THANK YOU!