PART 1 ECONOMIC BRIEFING: THE PHILIPPINE ECONOMY AND THE FILIPINO PEOPLE. Cid L. Terosa, Ph.D. School of Economics University of Asia and the Pacific

Transcription

1 PART 1 ECONOMIC BRIEFING: THE PHILIPPINE ECONOMY AND THE FILIPINO PEOPLE Cid L. Terosa, Ph.D. School of Economics University of Asia and the Pacific

2 Outline Is the economy producing more? What type of spending is driving economic growth? Which industries are driving economic growth? Do we have enough dollars to support the economy? Are we paying more for the goods and services we buy?

3 Outline Is it expensive to borrow money? How are Philippine regions performing? Which provinces and cities in the Philippines have good market potential? How are Filipinos doing? Are more Filipinos poor? What are growth prospects this year?

4 Is the economy producing more?

5 GROWTH RATE (%) Growth of domestic production went down in Gross Domestic Product (GDP) Growth Rate: (constant 2000 prices, in %) YEAR GDP GROWTH RATE Source: Philippine Statistics Authority

6 GROWTH RATE (%) But growth of domestic production has been above the historical trend for most of the past 6 years Gross Domestic Product (GDP) Growth Rate: (constant 2000 prices, in %) YEAR GDP GROWTH RATE Linear (GDP GROWTH RATE) Source: Philippine Statistics Authority

7 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015q4 Weaker quarterly growth in 2015 relative to 2014 % QUARTERLY GROWTH RATE ( Q4) Source: Philippine Statistics Authority YEAR AND QUARTER

8 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 But stronger first quarter growth in 2016 relative to % QUARTERLY GROWTH RATE ( Q1) Source: Philippine Statistics Authority YEAR AND QUARTER

9 What type of spending is driving economic growth?

10 Growth of domestic production is largely driven by household consumption spending % 60.00% 40.00% Share 20.00% 0.00% % % % HFCE GFCE CF EXP IMP SD Demand Drivers of GDP Growth Note: computed based on data from the Philippine Statistics Authority

11 Capital formation and exports have consistently contributed to growth in 2014 and % 60.00% 40.00% Share 20.00% 0.00% % HFCE GFCE CF EXP IMP SD % % Demand Drivers of GDP Growth Note: computed based on data from the Philippine Statistics Authority

12 Which sectors are driving economic growth?

13 Growth of domestic production is service sector-led. SHARE 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% % AGRI INDUSTRY SERVICE SECTOR Source of basic data: Philippine Statistics Authority

14 Which industries are driving economic growth?

15 Industry Drivers of the Growth of Gross INDUSTRY Domestic Product (2014 and 2015) SHARE IN GDP GROWTH (2014) SHARE IN GDP GROWTH (2015) Agriculture and Forestry 2.84% 0.93% Fishery -0.12% -0.57% Mining and Quarrying 0.86% -0.25% Manufacturing 30.83% 22.98% Construction 9.19% 9.00% Electricity, Gas, and Water 1.53% 2.66% Transportation, Storage, and Communication 7.52% 10.22% Trade and Repair 15.44% 19.63% Financial Intermediation 8.41% 7.11% Real Estate, Renting and Business Activities 15.57% 14.03% Public Admin., Defense 2.44% 0.43% Other Services 5.49% 13.82% Note: Computed based on data from the National Statistical Coordination Board-Philippine Statistics Authority..

16 SHARE IN GDP GROWTH, %) For the past three years, manufacturing, trade, and real estate accounted for more than 55% of growth YEAR MFGTRADEREALESTATE OTHERS Source of basic data: National Statistical Coordination Board-Philippine Statistics Authority

17 The share of manufacturing in growth continues to fall, but the share of trade continues to rise. INDUSTRY SHARE IN GDP GROWTH (2013) SHARE IN GDP GROWTH (2014) SHARE IN GDP GROWTH (2015) AGRICULTURE, FORESTRY, FISHERY 2.70% 2.72% 0.36% MANUFACTURING 32.45% 30.83% 22.98% CONSTRUCTION AND REAL ESTATE 21.13% 24.76% 23.3% TRADE AND REPAIR 15.17% 15.44% 19.63% OTHER SERVICES 7.98% 5.49% 13.82% Source of basic data: National Statistical Coordination Board-Philippine Statistics Authority

18 Do we have enough dollars to support the economy?

19 CURRENT ACCOUNT We are earning more dollars from trade through time CURRENT ACCOUNT: (IN MILLION US$) YEAR Source: Bangko Sentral ng Pilipinas CURRENT ACCOUNT

20 CURRENT ACCOUNT But dollar earnings from trade fell below historical trend in CURRENT ACCOUNT: (IN MILLION US$) YEAR CURRENT ACCOUNT Linear (CURRENT ACCOUNT) Source: Bangko Sentral ng Pilipinas

21 GIR Reserves rose in GROSS INTERNATIONAL RESERVES (in billion US$) YEAR Source: Bangko Sentral ng Pilipinas

22 GIR But reserves fell below historical trend in 2015 (for the first time in 6 years). 100 GROSS INTERNATIONAL RESERVES: (in billion US$) YEAR Series1 Linear (Series1) Source: Bangko Sentral ng Pilpinas

23 GIR Reserves are still more than enough for our needs GROSS INTERNATIONAL RESERVES: (in billion US$) 6-months benchmark GIR YEAR Source: Bangko Sentral ng Pilipinas

24 NIR We have enough reserves even after paying for short-term debts Net International Reserves (in billion US$) 6 months benchmark YEAR Source: Bangko Sentral ng Pilipinas NIR

25 REMITTANCES More dollars from family and friends REMITTANCES: (in billion US$) YEAR Series1 Source: Bangko Sentral ng Pilipinas

26 REMITTANCES Inflow of remittances is still consistent with historical trend. REMITTANCES: (in billion US$) YEAR REMITTANCES Linear (REMITTANCES) Source: Bangko Sentral ng Pilipinas

27 GIR AND PESO-DOLLAR RATE As reserves increase, the peso-dollar rate becomes relatively strong and stable. 100 GROSS INTERNATIONAL RESERVES (in billion US$) AND PESO-DOLLAR EXCHANGE RATE ( ) YEAR RESERVES EXCHANGE RATE Source: Bangko Sentral ng Pilipinas

28 Are we paying more for the goods and services we buy?

29 INFLATION RATE, % Inflation rate in 2015 was the lowest since INFLATION RATE (IN %, 2006=100) YEAR INFLATION RATE Linear (INFLATION RATE) Source: National Statistical Coordination Board-Philippine Statistics Authority

30 As reserves grow and the peso-dollar rate remains relatively strong, inflation remains stable TREND OF RESERVES, PESO-DOLLAR RATE, AND INFLATION RATE: INFLATION RATE PESO-DOLLAR RATE RESERVES Source: Bangko Sentral ng Pilipinas and National Statistical Coordination Board

31 Is it expensive to borrow money?

32 INTEREST RATE, IN % Falling domestic interest rates DAY TREASURY BILL RATE AND AVERAGE BANK LENDING RATE: (in %) YEAR T-BILL RATE (91 DAY) BANK LENDING RATE Source: Bangko Sentral ng Pilipinas

33 INTEREST RATE, IN % Lower inflation rate, lower domestic interest rates DAY TREASURY BILL RATE, AVERAGE BANK LENDING RATE, AND INFLATION RATE : (in %) YEAR T-BILL RATE (91 DAY) BANK LENDING RATE INFLATION RATE Source: Bangko Sentral ng Pilipinas

34 How are Philippine regions performing?

35 GROWTH RATE From 2011 to 2014, Mindanao was never the slowest growing island-region in the country. GROWTH OF PRODUCTION: (by region, in %) 10 PHILIPPINES NCR LUZON VISAYAS MINDANAO YEAR Source: National Statistical Coordination Board-Philippine Statistics Authority

36 CONTRIBUTION TO GROWTH From 2012 to 2014, Mindanao contributed more to the growth of the national economy than the Visayas CONTRIBUTION TO GROWTH OF PRODUCTION: (by region, in %) NCR LUZON VISAYAS MINDANAO YEAR Source: National Statistical Coordination Board-Philippine Statistics Authority

37 Which regions in Luzon contributed more to the growth of domestic production? REGION 2011 (%) 2012 (%) 2013 (%) 2014(%) Philippines (GDP growth rate, in %) NCR CAR Ilocos Region Cagayan Valley Central Luzon CALABARZON MIMAROPA BICOL Source: National Statistical Coordination Board Philippine Statistics Authority

38 Which region in the Visayas contributed more to the growth of domestic production? REGION 2011 (%) 2012 (%) 2013 (%) 2014 (%) Philippines (GDP growth rate, in %) Western Visayas Central Visayas Eastern Visayas Source: National Statistical Coordination Board-Philippine Statistics Authority

39 Which regions in Mindanao contributed more to the growth of domestic production? REGION 2011 (%) 2012 (%) 2013 (%) 2014(%) Philippines (GDP growth rate, in %) Zamboanga Peninsula Northern Mindanao Davao Region Soccsksargen CARAGA ARMM Source: National Statistical Coordination Board-Philippine Statistics Authority

40 Which regions are growing faster than the national economy? AVERAGE GROWTH RATE ( ) (IN %) PHILIPPINES CARAGA CENTRAL VISAYAS SOCCSKSARGEN DAVAO REGION NORTHERN MINDANAO NATIONAL CAPITAL REGION ZAMBOANGA PENINSULA CAGAYAN VALLEY CENTRAL LUZON 6.5 Source: National Statistical Coordination Board-Philippine Statistics Authority

41 Which regions are creating more jobs than the national economy? AVERAGE EMPLOYMENT GROWTH RATE ( ) (IN %) PHILIPPINES ARMM BICOL CARAGA CALABARZON CENTRAL LUZON CENTRAL VISAYAS DAVAO REGION NCR NORTHERN MINDANAO 1.63 Source: Bureau of Labor and Employment Statistics

42 MORE PRODUCTION, MORE JOBS AVERAGE EMPLOYMENT GROWTH ( ) MORE THAN AVERAGE EMPLOYMENT GROWTH LESS THAN AVERAGE EMPLOYMENT GROWTH AVERAGE GROWTH RATE OF GROSS REGIONAL DOMESTIC PRODUCT ( ) MORE THAN AVERAGE OUTPUT GROWTH LESS THAN AVERAGE OUTPUT GROWTH NCR * CENTRAL LUZON * CENTRAL VISAYAS * NORTHERN MINDANAO DAVAO REGION CARAGA CALABARZON * BICOL REGION ARMM CAGAYAN VALLEY * ZAMBOANGA PENINSULA SOCCSKSARGEN * CAR ILOCOS MIMAROPA * WESTERN VISAYAS EASTERN VISAYAS * Source of Basic Data: NSCB-PSA and BLES

43 SHARE Distribution of Household Spending (2014) SHARE OF REGIONS IN HOUSEHOLD SPENDING(%) REGION Source of Basic Data: National Statistical Coordination Board-Philippine Statistics Authority

44 In which regions is household spending growing faster than the national economy? AVERAGE GROWTH OF HOUSEHOLD FINAL CONSUMPTION SPENDING ( ) (IN %) PHILIPPINES MIMAROPA * ZAMBOANGA PENINSULA * CENTRAL VISAYAS * DAVAO REGION CENTRAL LUZON NORTHERN MINDANAO * ILOCOS REGION 5.9 Source: National Statistical Coordination Board-Philippine Statistics Authority

45 PRODUCING AND SPENDING MORE AVERAGE GROWTH RATE OF GROSS REGIONAL DOMESTIC PRODUCT ( ) AVERAGE GROWTH RATE OF HOUSEHOLD FINAL CONSUMPTION SPENDING ( ) ABOVE NATIONAL AVERAGE GDP BELOW NATIONAL AVERAGE GDP ABOVE NATIONAL AVERAGE CONSUMPTION SPENDING CENTRAL LUZON CENTRAL VISAYAS * NORTHERN MINDANAO * ZAMBOANGA PENINSULA DAVAO REGION ILOCOS REGION MIMAROPA * BELOW NATIONAL AVERAGE CONSUMPTION SPENDING NCR CAGAYAN VALLEY * CARAGA * SOCCSKSARGEN * CALABARZON CAR * BICOL REGION WESTERN VISAYAS EASTERN VISAYAS * ARMM * Source of Basic Data: National Statistical Coordination Board- Philippine Statistics Authority

46 Regions that grew faster than the national economy in terms of production, employment, and spending ( ) CENTRAL LUZON CENTRAL VISAYAS NORTHERN MINDANAO DAVAO REGION

47 Which provinces and cities in the Philippines have good market potential?

48 TOP PROVINCES IN TERMS OF MARKET POTENTIAL TOP TEN PROVINCES NEXT TEN PROVINCES 1. CEBU 11. NEGROS OCCIDENTAL 2. CAVITE 12. NUEVA ECIJA 3. BATANGAS 13. ILOILO 4. BULACAN 14. SOUTH COTABATO 5. LAGUNA 15. BATAAN 6. PAMPANGA 16. ZAMBOANGA DEL SUR 7. DAVAO DEL SUR 17. QUEZON 8. RIZAL 18. BOHOL 9. MISAMIS ORIENTAL 19. LEYTE 10. PANGASINAN 20. NEGROS ORIENTAL

49 TOP REGIONAL PROVINCES REGION CORDILLERA AUTONOMOUS REGION ILOCOS REGION CAGAYAN CENTRAL LUZON CALABARZON MIMAROPA BICOL TOP PROVINCE(S) BENGUET PANGASINAN, LA UNION CAGAYAN, ISABELA BULACAN, PAMPANGA CAVITE, BATANGAS PALAWAN, OCCIDENTAL MINDORO CAMARINES SUR, ALBAY

50 TOP REGIONAL PROVINCES REGION WESTERN VISAYAS CENTRAL VISAYAS EASTERN VISAYAS ZAMBOANGA PENINSULA NORTHERN MINDANAO DAVAO REGION CARAGA TOP PROVINCE(S) ILOILO, NEGROS OCCIDENTAL CEBU, BOHOL LEYTE ZAMBOANGA DEL SUR MISAMIS ORIENTAL, BUKIDNON DAVAO DEL SUR, DAVAO DEL NORTE AGUSAN DEL NORTE, SURIGAO DEL NORTE

51 TOP CITIES IN TERMS OF MARKET POTENTIAL TOP TEN CITIES NEXT TEN CITIES 1. CEBU CITY 11. MANDAUE CITY 2. DAVAO CITY 12. LAPU-LAPU CITY 3. CAGAYAN DE ORO CITY 13. DASMARINAS CITY 4. STA. ROSA CITY 14. ANGELES CITY 5. ILOILO CITY 15. CABUYAO CITY 6. CALAMBA CITY 16. BINAN CITY 7. BACOLOD CITY 17. BAGUIO CITY 8. BATANGAS CITY 18. GENERAL SANTOS CITY 9. ANTIPOLO CITY 19. CABANATUAN CITY 10. SAN FERNANDO CITY (PAMPANGA) 20. LIPA CITY

52 REGION TOP CITIES (BY REGION) TOP CITY/ CITIES CORDILLERA AUTONOMOUS REGION ILOCOS REGION CAGAYAN BAGUIO CITY DAGUPAN CITY, SAN FERNANDO CITY (LA UNION), LAOAG CITY SANTIAGO CITY, CAUAYAN CITY CENTRAL LUZON SAN FERNANDO CITY (PAMPANGA), ANGELES CITY, CABANATUAN CITY, TARLAC CITY, MEYCAUAYAN CITY CALABARZON MIMAROPA STA.ROSA CITY, CALAMBA CITY, BATANGAS CITY, ANTIPOLO CITY, DASMARINAS CITY PUERTO PRINCESA CITY, CALAPAN CITY BICOL NAGA CITY, LEGASPI CITY, SORSOGON CITY

53 REGION TOP CITIES (BY REGION) TOP CITY/ CITIES WESTERN VISAYAS CENTRAL VISAYAS EASTERN VISAYAS ZAMBOANGA PENINSULA NORTHERN MINDANAO DAVAO REGION CARAGA ILOILO CITY, BACOLOD CITY, ROXAS CITY, KABANKALAN CITY, TALISAY CITY CEBU CITY, MANDAUE CITY, LAPU-LAPU CITY, DUMAGUETE CITY, TALISAY CITY (CEBU) TACLOBAN CITY, ORMOC CITY, MAASIN CITY ZAMBOANGA CITY, PAGADIAN CITY, DIPOLOG CITY CAGAYAN DE ORO CITY, ILIGAN CITY, OZAMIS CITY, VALENCIA CITY DAVAO CITY, TAGUM CITY, DIGOS CITY BUTUAN CITY, SURIGAO CITY

54 REGIONS WITH BETTER MARKET POTENTIAL Summing up PROVINCES WITH HIGHER LEVELS OF MARKET POTENTIAL CITIES WITH HIGHER LEVELS OF MARKET POTENTIAL 1. NCR 1. CEBU 1. CEBU CITY 2.CALABARZON 2. CAVITE 2. DAVAO CITY 3.CENTRAL LUZON 3. BATANGAS 3. CAGAYAN DE ORO CITY 4. CENTRAL VISAYAS 4. BULACAN 4. STA. ROSA CITY 5. WESTERN VISAYAS 5. LAGUNA 5. ILOILO CITY 6.BICOL REGION 6. PAMPANGA 6. CALAMBA CITY 7. NORTHERN MINDANAO 7. DAVAO DEL SUR 7. BACOLOD CITY 8. MIMAROPA 8. RIZAL 8. BATANGAS CITY 9. ILOCOS REGION 9.MISAMIS ORIENTAL 9. ANTIPOLO CITY 10. DAVAO REGION 10. PANGASINAN 10. SAN FERNANDO CITY, PAMPANGA

55 How are Filipinos doing?

56 More than 25% of the population is still poor, but poverty incidence is slowly improving Poverty incidence in the Philippines (%,headcount, ) POVERTY INCIDENCE Source of data: Philippine Statistics Authority

57 Poverty incidence in Mindanao is the worst, but it has slowly improved. 50 Poverty Incidence in the Philippines (%, headcount, ) PHILIPPINES NCR LUZON VISAYAS MINDANAO Source of data: Philippine Statistics Authority

58 Change in poverty incidence Mindanao recorded the highest decrease in poverty incidence from 2012 to Change in poverty incidence ( , in percentage points) PHIL NCR LUZON VISAYAS MINDANAO Source of data: Philippine Statistics Authority

59 Poverty Incidence in the NCR and Luzon: 2012 and 2015 (headcount, in %) CHANGE PHILIPPINES NCR CORDILLERA * ILOCOS REGION CAGAYAN VALLEY * CENTRAL LUZON CALABARZON MIMAROPA * BICOL REGION * Source: Philippine Statistics Authority

60 Poverty incidence in the Visayas: 2012 and 2015 (headcount, in %) CHANGE PHILIPPINES WESTERN VISAYAS CENTRAL VISAYAS * EASTERN VISAYAS Source: Philippine Statistics Authority

61 Poverty incidence in Mindanao: 2012 and 2015 (headcount, in %) CHANGE PHILIPPINES ZAMBOANGA PEN * N. MINDANAO DAVAO REGION * SOCCSKSARGEN CARAGA ARMM * Source: Philippine Statistics Authority

62 Faster production growth, greater decrease in poverty incidence? CHANGE IN POVERTY INCIDENCE (2012 AND 2015) GREATER CHANGE IN POVERTY INCIDENCE RELATIVE TO THE PHILIPPINES LESSER CHANGE IN POVERTY INCIDENCE RELATIVE TO THE PHILIPPINES AVERAGE GROWTH RATE OF GROSS REGIONAL DOMESTIC PRODUCT ( ) MORE THAN AVERAGE OUTPUT GROWTH LESS THAN AVERAGE OUTPUT GROWTH CAGAYAN VALLEY CENTRAL VISAYAS ZAMBOANGA PENINSULA NORTHERN MINDANAO DAVAO REGION CAR BICOL REGION ARMM MIMAROPA ILOCOS REGION CALABARZON WESTERN VISAYAS NCR CENTRAL LUZON SOCCSKSARGEN CARAGA EASTERN VISAYAS Source of Basic Data: NSCB-PSA

63 Faster job growth, greater decrease in poverty incidence? CHANGE IN POVERTY INCIDENCE (2012 AND 2015) GREATER CHANGE IN POVERTY INCIDENCE RELATIVE TO THE PHILIPPINES LESSER CHANGE IN POVERTY INCIDENCE RELATIVE TO THE PHILIPPINES AVERAGE GROWTH RATE OF EMPLOYMENT ( ) MORE THAN AVERAGE JOB GROWTH BICOL REGION CENTRAL VISAYAS NORTHERN MINDANAO DAVAO REGION ARMM NCR CENTRAL LUZON CALABARZON CARAGA LESS THAN AVERAGE JOB GROWTH CAR MIMAROPA CAGAYAN VALLEY ZAMBOANGA PENINSULA EASTERN VISAYAS ILOCOS REGION WESTERN VISAYAS SOCCSKSARGEN Source of Basic Data: NSCB-PSA

64 11 of the 20 poorest provinces in the Philippines are in Mindanao. TOP 10 PROVINCES POVERTY INCIDENCE (2015,%) NEXT 10 PROVINCES POVERTY INCIDENCE (2015,%) 1. Lanao del Sur Negros Oriental Sulu N. Cotabato Sarangani W. Samar Bukidnon Lanao del Norte Siquijor Mt. Province Northern Samar E. Samar Maguindanao Camiguin Sultan Kudarat Catanduanes Zamb. del Norte Apayao Agusan del Sur Camarines Norte 36.5 Source of Basic Data: Philippine Statistics Authority

65 Has poverty incidence gone down in provinces with the highest poverty incidence? TOP 10 PROVINCES POVERTY INCIDENCE (2012,%) POVERTY INCIDENCE (2015, %) CHANGE (percentage points) 1. Lanao del Sur Sulu Sarangani Bukidnon Siquijor Northern Samar Maguindanao Sultan Kudarat Zamb. Del Norte Agusan del Sur Source of Basic Data: Philippine Statistics Authority

66 SECTORS Which groups of individuals have higher poverty incidence? POVERTY INCIDENCE (FOR THE PHIL., 2012,IN %) FISHERMEN 39.2 FARMERS 38.3 CHILDREN 35.2 SELF-EMPLOYED AND UNPAID FAMILY WORKERS 29.0 WOMEN 25.6 YOUTH 22.3 EMPLOYED 21.9 UNEMPLOYED 18.7 MIGRANTS AND FORMAL SECTOR WORKERS 16.6 SENIOR CITIZENS 16.2 INDIV. LIVING IN URBAN AREAS 13.0 Source of basic data: Philippine Statistics Authority

67 In which regions is poverty incidence highest for different groups of individuals? SECTORS FISHERMEN FARMERS CHILDREN SELF-EMPLOYED AND UNPAID FAMILY WORKERS WOMEN YOUTH EMPLOYED UNEMPLOYED MIGRANTS AND FORMAL SECTOR WORKERS SENIOR CITIZENS INDIV. LIVING IN URBAN AREAS TOP 3 REGIONS WITH HIGH POVERTY INCIDENCE (2012,IN %) CARAGA, E.VISAYAS, BICOL ARMM, N.MINDANAO, ZAMB. PENINSULA ARMM, E.VISAYAS, SOCCSKSARGEN ARMM, ZAMB. PENINSULA, N. MINDANAO ARMM, E.VISAYAS, SOCCSKSARGEN ARMM, E. VISAYAS, SOCCSKSARGEN ARMM, E. VISAYAS, SOCCSKSARGEN ARMM, E.VISAYAS, N. MINDANAO ARMM, SOCCSKSARGEN, BICOL ARMM, SOCCSKSARGEN, E.VISAYAS ARMM, SOCCSKSARGEN, CARAGA Source of basic data: Philippine Statistics Authority

68 What are the prospects for economic growth this year?

69 GROWTH RATE (%) Production this year could grow faster than last year Gross Domestic Product (GDP) Growth Rate: (constant 2000 prices, in %) YEAR GDP GROWTH RATE Linear (GDP GROWTH RATE) Source: Philippine Statistical Authority

70 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 Strong first quarter growth in 2016 relative to 2015 % QUARTERLY GROWTH RATE ( Q1) Source: Philippine Statistical Authority YEAR AND QUARTER Series1

71 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 Rising quarterly growth trend since the first quarter of QUARTERLY GDP GROWTH RATE ( Q1) 8 % Source: Philippine Statistical Authority YEAR AND QUARTER GDP GROWTH RATE (BY QUARTER)

72 Growth Drivers (rest of 2016) Demand Drivers of Growth Household Family Consumption Spending Government spending Investments (if foreign ownership restrictions are relaxed) Industry Drivers of Growth Manufacturing Construction Trade Private business services Real Estate and related activities

73 Downside Risk Factors La Niña Geopolitical tensions (Middle East, Asia) Negative investor sentiments and perceptions Weak global economic outlook Calamities, natural disasters Rising cost of petroleum products, electricity, and water Economic performance of developed countries Growth slowdown in China

74 Will we earn more dollars this year? SOME FACTORS TO CONSIDER Growth prospects of major trading partners (USA, Japan, China) Geopolitical risks and economic performance of countries in the Middle East Policy actions of developed countries particularly the USA Remittances and tourism revenues Inflow of foreign investments

75 REMITTANCES Will family and friends remit more dollars this year? REMITTANCES: (in billion US$) YEAR Cash remittances Source: Bangko Sentral ng Pilipinas

76 Growth of remittances will continue to be slower in Growth of remittances ( , in %) GROWTH RATE Linear (GROWTH RATE) Source of data: Bangko Sentral ng Pilipinas

77 But encouraging trend for the first four months of TOTAL CASH REMITTANCES: JANUARY-APRIL 2015 AND 2016 (IN BILLION $) JAN-APRIL2015 Total cash remittances JAN-APRIL2016 Source of data: Bangko Sentral ng Pilipinas

78 Will the peso be stronger or weaker? SOME FACTORS TO CONSIDER Growth prospects of developed countries particularly the USA Geopolitical risks and economic performance of countries in the Middle East Policy actions of developed countries particularly the USA Remittances and tourism revenues Inflow of foreign investments

79 Will the peso be stronger or weaker? FACTOR Economic recovery in developed countries Outflow of investments due to geopolitical risks and policy actions of developed countries particularly the USA Sustained increase in remittances and tourism revenues Inflow of investments due to sustained strong economic performance of the country TENDENCY OF THE PESO-DOLLAR RATE weaken weaken strengthen strengthen

80 Will the peso be stronger or weaker? Gross International Reserves and Peso-Dollar Rate Forecast Trend for GIR GIR peso-dollar rate Linear (GIR)

81 INFLATION RATE, % Will we be paying more for the goods and services we buy? INFLATION RATE (IN %, 2006=100) YEAR INFLATION RATE Linear (INFLATION RATE) Source: National Statistical Coordination Board-Philippine Statistics Authority

82 If reserves continue to grow and the peso does not drastically lose value, inflation may remain stable TREND OF RESERVES, PESO-DOLLAR RATE, AND INFLATION RATE: INFLATION RATE PESO-DOLLAR RATE GIR Source: Bangko Sentral ng Pilipinas and National Statistical Coordination Board

83 Will we be paying more for the goods and services we buy? COST-PUSH FACTORS Prices of imported production inputs Price of labor inputs Cost of borrowing money When peso is STRONG relatively stable relatively stable PRESSURE ON PRICES

84 Will we be paying more for the goods and services we buy? STRUCTURAL AND RISK FACTORS Supply bottlenecks and rigidities Domestic and international political tensions Due to disasters, calamities, etc. Middle East, West Philippine Sea, PRESSURE ON PRICES

85 Will domestic interest rates continue to be low? DAY TREASURY BILL RATE AND AVERAGE BANK LENDING RATE: (in %) YEAR T-BILL RATE (91 DAY) BANK LENDING RATE Source: Bangko Sentral ng Pilipinas

86 FACTORS Inflation rate Domestic Liquidity Will domestic interest rates continue to be low? relatively low and stable positive growth, sufficient level PRESSURE ON INTEREST RATES Government deficit manageable levels Intermediation Cost relatively stable Monetary Policy of the USA higher interest rate regime

87 Fearful forecast (2016) ECONOMIC INDICATOR 2016 forecast GROSS DOMESTIC PRODUCT % INFLATION RATE % PESO-DOLLAR RATE AVERAGE BANK LENDING RATE PESOS: 1 DOLLAR 5.5-6%

88 What are the prospects for growth in Mindanao this year?

89 When the national economy grows, some Mindanao regions grow with it.

90 Some regions in Mindanao have been growing faster than the national economy AVERAGE GROWTH RATE ( ) (IN %) PHILIPPINES CARAGA CENTRAL VISAYAS SOCCSKSARGEN DAVAO REGION NORTHERN MINDANAO NATIONAL CAPITAL REGION ZAMBOANGA PENINSULA CAGAYAN VALLEY CENTRAL LUZON 6.5 Source of data: National Statistical Coordination Board-Philippine Statistics Authority

91 What could positively affect Mindanao s economic growth prospects this year? President is from Mindanao Industry drivers of growth Agriculture and agribusiness Construction and Real Estate Wholesale and Retail Trade Tourism and tourism-related industries (hotels, restaurants, transport services, personal services, etc.)

92 What other factors need to be considered? External shocks (oil prices, economic performance of China, USA, Eurozone, etc.) State of infrastructure of Mindanao Value-added of raw materials and products from Mindanao Development of manufacturing industries La Niña, natural disasters ASEAN Economic Community Federalism

93 Cooperatives should ride the wave of strong economic growth in some Mindanao regions. CARAGA, SOCCSKSARGEN, Northern Mindanao, and Davao Region have been growing faster than the national economy. Around 70% of the total number of cooperatives in Mindanao are in these regions.

94 How can Mindanao cooperatives ride the wave of regional economic growth? Establish and strengthen linkages with industry drivers of growth Mindanao, particularly ARMM, has the biggest number of producer and marketing cooperatives in the Philippines. Davao Region has the greatest number of MPC, consumer cooperatives, and service cooperatives in Mindanao. Northern Mindanao has the biggest number of credit cooperatives in Mindanao.

95 How can Mindanao cooperatives ride the wave of regional economic growth? Diversify goods and services to diversify linkages with business and industry Broaden the market horizon of cooperatives Keep cooperatives updated with market trends, business practices, current issues, related policy developments etc.

96 How can Mindanao cooperatives ride the wave of regional economic growth? Find opportunities in risk factors that negatively affect growth If food, energy, and water are looming future challenges, how can cooperatives become possible solutions or parts of solutions to these problems?

97 PART 2 ECONOMIC INTEGRATION, SUSTAINABLE DEVELOPMENT GOALS, AND COOPERATIVES

98 ASEAN Economic Community and Cooperatives

99 What is the ASEAN Economic Community? ASEAN Economic Community One pillar of the ASEAN Community agenda Aims to broaden and deepen economic integration among ASEAN membercountries

100 What are the four pillars of the ASEAN Economic Community? ASEAN Economic Community Has four pillars Single market and production base Highly competitive region Region of equitable development Region fully integrated into the global community

101 How will the four pillars of the ASEAN Economic Community be achieved? LIBERALIZATION OF TRADE IN SERVICES LIBERALIZATION OF TRADE IN GOODS LIBERALIZATION OF INVESTMENTS FOUR PILLARS OF AEC

102 Are cooperatives sufficiently covered by the ASEAN Economic Community blueprint? ASEAN Economic Community blueprint The only type of cooperative mentioned in the blueprint is agricultural cooperatives. No mention of all other types of cooperatives Thus, cooperatives have to be more broadly considered in the ASEAN Economic Community agenda.

103 What are the economic implications of the ASEAN Economic Community? ASEAN Economic Community implies Bigger and more diverse markets Greater competition Specialization based on comparative advantage

104 What are some possible broad responses of cooperatives to the ASEAN Economic Community? LEVEL UP QUANTITY AND QUALITY CREATE AND INNOVATE LINK AND INTEGRATE PARTNER AND COLLABORATE COLLECT AND DISSEMINATE

105 Sustainable Development Goals and Cooperatives

106 What are sustainable development goals? 17 goals to end poverty, fight inequality and injustice, tackle climate change by 2030 Builds on the Millennium Development Goals ( ) Sustainable development goals address the root causes of poverty and the universal need for inclusive growth and development

107

108 What can cooperatives contribute to the attainment of sustainable development goals? Sustainable development goal 1. No poverty 2. Zero hunger 3. Good health and wellbeing 4. Quality education 5. Gender Equality 6. Clean water and sanitation 7. Affordable and clean energy 8. Decent work and economic growth Can cooperatives contribute? (Yes/No) How?

109 What can cooperatives contribute to the attainment of sustainable development goals? Sustainable development goal 9. Industry, Innovation, and Infrastructure 10. Reduced inequalities 11. Sustainable cities and communities 12. Responsible consumption and production 13. Climate action 14. Sustainable life below water 15.Sustainable life on land Can cooperatives contribute? (Yes/No) How?

110 What can cooperatives contribute to the attainment of sustainable development goals? Sustainable development goal 16. Peace and justice, strong institutions 17. Partnerships for the goals Can cooperatives contribute? (Yes/No) How?

111 Thank you!