With an estimated population of about 94 million people, the Philippines is the world's 12th most populous country. An additional 11 million Filipinos live overseas.
The national economy of the Philippines is the 45th largest in the world, with an estimated 2011 gross domestic product (nominal) of $216 billion. Primary exports include semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, and fruits. Major trading partners include the United States, Japan, China, Singapore, South Korea, the Netherlands, Hong Kong, Germany, Taiwan, and Thailand. Its unit of currency is the Philippine peso (₱ or PHP).
Philippine Finance Minister Cesar Purisima said new rules governing mining in the Country, home to some of World's richest deposits of Copper, Gold, Zinc and Nickel, are likely this summer (March – May 2012), but that the government does not intend to block contracts from going forward in the interim.
The new rules are aimed at eliminating corruption and improving environmental protection. They will require mining operators to turn over around 50% of net profits to the government, Mr. Purisima said.
He added that existing contracts will not be reopened, but will be subject to the stricter environmental rules.
Philippine President Aquino during an interview said the mining in the Philippines is just about exploiting the resources and after that it's no more, in fact mining is only 2% of Economic contribution to the Philippines so it is better to prioritize the tourism and ban the mining in all tourism areas.
Mr. Purisima, speaking on the sidelines of a meeting of finance ministers of the Association of Southeast Asian Nations in Cambodia, said the International Monetary Fund's charter should be expanded to give it more oversight over Global financial risks such as the derivatives market.
"Given the huge amounts, the uneven regulation, an institution such as the IMF can take the lead in helping harmonize things," Mr. Purisima said.
He said the Philippines pays investment grade returns on its debt and he expects it will get an upgrade from the 3 major ratings firms.
"Here we are focusing on things we can control: strengthening revenues, continuing to improve our budget, and setting the proper environment for a faster growth rate," he said.
Mr. Purisima noted the Philippine's reserves are at historic highs, its current account surplus remains strong, due largely to remittances from overseas workers, and its banking sector is well capitalized.
The new laws eliminate some tax incentives and raise taxes on tobacco and alcohol, and are expected to strengthen the Philippines' fiscal situation boosting the case for a ratings upgrade, he said.
A newly industrialized country, the Philippine economy has been transitioning from one based on agriculture to one based more on services and manufacturing. Of the country's total labor force of around 38.1 million, the agricultural sector employs close to 32% but contributes to only about 13.8% of GDP. The industrial sector employs around 13.7% of the workforce and accounts for 30% of GDP. Meanwhile the 46.5% of workers involved in the services sector are responsible for 56.2% of GDP.
The economy is heavily reliant on OFW remittances which surpass foreign direct investment as a source of foreign currency. Regional development is uneven with Luzon—Metro Manila in particular—gaining most of the new economic growth at the expense of the other regions, although the government has taken steps to distribute economic growth by promoting investment in other areas of the country. Despite constraints, service industries such as tourism and business process outsourcing have been identified as areas with some of the best opportunities for growth for the country. Goldman Sachs includes the country in its list of the "Next Eleven" economies.
Bank lending expanded by 19.3 percent by the end of 2011, a pace of growth that the central bank said should help speed up growth of the Philippine economy in 2012.
The Bangko Sentral ng Pilipinas reported that outstanding loans of universal and commercial banks in the country amounted to P2.79 trillion by the end of 2011, up by 19.3 percent from that registered the year before.
The rise in bank lending aided the 6.3-percent growth of overall liquidity within the domestic economy, the BSP also said. It reported that "M3? – a broad measure of liquidity that includes currencies in circulation, savings and other types of deposits, money-market funds, etc. – amounted to P4.7 trillion by the end of 2011, up 6.3 percent year on year.
The credit growth of 19.3 percent is considered robust by central bank officials, as bank lending was growing by only around 10 percent in the previous two years.
Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.
Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.
