National Economy
The Philippine economy in 2014 benefited from three strong and important positive continuities from 2013 and years before: strong GDP growth, a stable macroeconomic situation and the introduction of new significant economic reforms. In 2013, international and regional credit rating agencies recognized these benefits so at odds with the historically-based expectations of Philippine economic performance and elevated the credit rating for the Philippines to investment grade. In 2014, these same firms raised the Philippine rating one notch higher. The more upbeat even expressed the belief that the present economic reform and macroeconomic management momentum is so strong and institutionalized that it will endure whoever becomes president in 2016. Praise for the Aquino administration's economic policy record was not limited to the risk raters of sovereign debt. The 2014 World Economic Forum Global Competitiveness Report, using 2013 statistics, rated the Philippines the most improved country overall among 144, moving seven places from 59th in 2013 to 52nd Transparency International's 2014 corruption Perception Index also delivered good news with the Philippines improving from 94th place in 2013(and 105th in 2012 to 85th place in 2014.
Sustained high levels of real Gross Domestic Product(GDP) growth has been a feature of the Aquino administration's term and a positive contrast to that of his two predecessors. The latest International Monetary Fund(IMF) estimates for 2014 and 2015. again have the Philippine growth rate as the fastest among Southeast Asia's six main economies(Indonesia, Malaysia, the Philippines Singapore, Thailand and Vietnam) and well above the average for the ten ASEAN economies, ln 2011, the Philippines was the second slowest growing major Southeast Asian economy well behind the regional average. In 2014 the national economy is expected to grow at 6.2 per cent compared with the Southeast Asian average of 5.5 per cent. In 2015. the Philippines is predicted to grow at a ruddy 6.3 per cent compared with the predicted regional average of 5.6 per cent. According to the Bangko Sentral ng Pilipinas, the growth in remittances inflows in 2014 matched real GDP growth with almost US$20 billion flowing into the Philippines in the first nine months of 2014, up 6.2 per cent, Remittance flows equate to roughly 10 per cent of total gross national income. As of the end of October, growth in goods exports at 11.9 per cent and services exports at 9.2 per cent outstripped real GDP growth in another positive sign for the economy.
2014 also saw the first sign that two key lagging economic indicators, Foreign Direct Investment(FDD inflows and employment, finally may be improving in the wake of real GDP, remittances and export growth. Net FDI is estimated to have risen sharply in 2014 by 61.3 per cent after growing by 12.7 per cent in 2013. Net direct investment flows from the United States, the largest holder of foreign direct investment in the Philippines, saw an impressive turnaround of over US$1.4 billion from 2013 to 2014. Total net foreign direct investment is estimated at US$4.9 billion for 2014. According to the International Labour Organization, in 2013, the Philippines had the highest unemployment rate among Southeast Asian economies at 7.3 per cent. Indonesia came second at only 6 per cent The Philippines also has a relatively low labour force participation rate further aggravating the true employment situation. While green shoots often do not turn into sturdy plants, the employment situation showed some signs of improvement through 2014. By the end of october, the unemployment rate had fallen according to Philippine Government statistics to 6.0 per cent, the lowest rate in a decade, down from 7.0 per cent in January while the labour force participation rate actually increased.
The latest government statistics show a similar positive trend in poverty levels. From mid-2012 to mid-2013 the poverty rate fell from 27.9 per cent in the first semester of 2012 to 24.9 per cent in the first semester 2013." However, Filipinos' perception of themselves as poor continues to remain stubbornly high despite three years of above average real GDP growth and government poverty statistics. According to the Social Weather Stations' quarterly polling on self-rated poverty, over half of Filipinos rated themselves as poor (mahirap), with this already high percentage inching up over the term of President Aquino.
The 2014 economic reform story was a very similar one of benefits being reaped from previous difficult reforms and new ones undertaken After more than two decades of stalemate in Congress, in 2012 the Aquino administration did what many thought would never happen and passed the"sin tax" on alcohol and cigarettes despite very powerful vested interests. San Miguel, the largest local alcohol producer, is the Philippines largest private sector firm. In 2014. sin tax receipts well overshot revenue est