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PHILIPPINES
The Philippines (/ˈfɪlɪpiːnz/ ( listen); Filipino: Pilipinas [ˌpɪlɪˈpinɐs] or Filipinas [ˌfɪlɪˈpin
ɐs]), officially the Republic of the Philippines(Filipino: Republika ng Pilipinas)[a] is
a unitary sovereign and archipelagic country in Southeast Asia. Situated in the western
Pacific Ocean, it consists of about 7,641 islands[18] that are categorized broadly under
three main geographical divisions from north to south: Luzon, Visayas, and Mindanao.
The capital city of the Philippines is Manila and the most populous city is Quezon City,
both part of Metro Manila.[19] Bounded by the South China Sea on the west,
the Philippine Sea on the east and the Celebes Sea on the southwest, the Philippines
shares maritime borders with Taiwan to the north, Vietnam to the west, Palau to the east
and Malaysia and Indonesia to the south.

The Philippines' location on the Pacific Ring of Fire and close to the equator makes the
Philippines prone to earthquakes and typhoons, but also endows it with abundant natural
resources and some of the world's greatest biodiversity. The Philippines has an area of
343,448 square kilometers (132,606 sq mi)[5] and, as of 2015, had a population of at
least 100 million.[7] As of January 2018, it was the eighth-most populated country in
Asia and the 12th most populated country in the world. Approximately 10 million
additional Filipinos lived overseas,[20] comprising one of the world's largest diasporas.
Multiple ethnicities and cultures are found throughout the islands. In prehistoric
times, Negritos were some of the archipelago's earliest inhabitants. They were followed
by successive waves of Austronesian peoples.[21] Exchanges with
Chinese, Malay, Indian, and Islamic nations occurred. Then, various competing
maritime states were established under the rule of Datus, Rajahs, Sultans or Lakans.

The arrival of Ferdinand Magellan in Homonhon, Eastern Samar in 1521 marked the
beginning of Hispanic colonization. In 1543, Spanish explorer Ruy López de
Villalobos named the archipelago Las Islas Filipinas in honor of Philip II of Spain. With
the arrival of Miguel López de Legazpi from Mexico City, in 1565, the first Hispanic
settlement in the archipelago was established.[22] The Philippines became part of

the Spanish Empire for more than 300 years. This resulted in Catholicism becoming the
dominant religion. During this time, Manila became the western hub of the
trans-Pacific trade connecting Asia with Acapulco in the Americas using Manila
galleons.[23]

As the 19th century gave way to the 20th, the Philippine Revolution followed in quick
succession, which then spawned the short-lived First Philippine Republic, followed by the
bloody Philippine–American War.[24] Aside from the period of Japanese occupation,
the United States retained sovereignty over the islands until after World War II, when the
Philippines was recognized as an independent nation. Since then, the Philippines has
often had a tumultuous experience with democracy, which included the overthrow of a
dictatorship by a non-violent revolution.[25]

It is a founding member of the United Nations, World Trade Organization, Association of
Southeast Asian Nations, the Asia-Pacific Economic Cooperation forum, and the East
Asia Summit. It also hosts the headquarters of the Asian Development Bank.[26] The
Philippines is considered to be an emerging market and a newly industrialized
country,[27] which has an economy transitioning from being one based on agriculture to
one based more on services and manufacturing.[28] It is one of the only two
predominantly Christiannations in Southeast Asia, the other being East Timor.

a translation of the Spanish name. During the Philippine Revolution. From the period of the Spanish– American War (1898) and the Philippine–American War (1899–1902) until the Commonwealth period (1935–46).[24] From the 1898 Treaty of Paris. Spanish explorer Ruy López de Villalobos. other names such as Islas del Poniente (Islands of the West) and Magellan's name for the islands San Lázaro were also used by the Spanish to refer to the islands. American colonial authorities referred to the country as the Philippine Islands. Before that became commonplace. named the islands of Leyte and Samar Felipinas after the then-Prince of Asturias.[29][30][31][32][33] The official name of the Philippines has changed several times in the course of its history. the official name of the country has been the Republic of the Philippines. Eventually the name Las Islas Filipinas would be used to cover all the islands of the archipelago. the name Philippines began to appear and it has since become the country's common name. Since the end of World War II.ETYMOLOGY The Philippines was named in honor of King Philip II of Spain.[34] . the Malolos Congress proclaimed the establishment of the República Filipina or the Philippine Republic. during his expedition in 1542.

000 years ago is the oldest human remnant found in the archipelago to date. but their first settlement in the Philippines has not been reliably dated.500 years ago.[35] This distinction previously belonged to the Tabon Man of Palawan.[38] .[36][37]Negritos were also among the archipelago's earliest inhabitants. carbon-dated to around 26.HISTORY The metatarsal of the Callao Man. reliably dated by uranium-series dating to 67.

Landa Jocanotheorizes that the ancestors of the Filipinos evolved locally. F. These artifacts are said to be evidence of long range communication between prehistoric Southeast Asian societies.There are several opposing theories regarding the origins of ancient Filipinos. a "jade culture" is said to have existed as evidenced by tens of thousands of exquisitely crafted jade artifacts found in the Philippines dated to 2000 BC. is the "Out-of-Taiwan" model. which hypothesizes that Austronesians from Taiwan.000 to 5000 BC rather than by wide-scale migration.[40][42] During the neolithic period. warrior societies. based on linguistic and archeological evidence. Wilhelm Solheim's Island Origin Theory[39] postulates that the peopling of the archipelago transpired via trade networks originating in the Sundaland area around 48. and port principalities. The Austronesian Expansion Theory explains that Malayo-Polynesians coming from Taiwan began migrating to the Philippines around 4000 BC.[41] began migrating to the Philippines around 4000 BC.[40] The most widely accepted theory. displacing earlier arrivals. the inhabitants of the archipelago had developed into four kinds of social groups: hunter-gatherer tribes. highland plutocracies.[46] . who were themselves descended from the neolithic civilizations of the Yangtze river such as the Liangzhu culture.[43][44] The jade is said to have originated nearby in Taiwan and is also found in many other areas in insular and mainland Southeast Asia. displacing earlier arrivals.[45] By 1000 BC.

and the beginnings of local and international trade. a number of the large coastal settlements had become progressive trading centers. ushering complex lifeways which characterized what F.[48] By the 1300s. greater social stratification and specialization.[47] This date came in the middle of what anthropologists refer to as the Philippines' "Emergent Phase" (1st–14th centuries CE).[48] . and became the focal point of societal changes. Landa Jocano called the "Barangic Phase" of early Philippine history. beginning from the 14th century through the arrival of Spanish colonizers and the beginning of the Philippines' colonial period. the initial development of large coastal settlements.PRECOLONIAL EPOCH The current demarcation between the Prehistory and the Early history of the Philippines is 21 April 900. which is the equivalent on the Proleptic Gregorian calendar for the date indicated on the Laguna Copperplate Inscription—the earliest known surviving written record to come from the Philippines. which was characterized by newly emerging socio-cultural patterns.

[50] Japan.[50] and later. some (but not all) Philippine polities were known to have sent trade delegations which participated in the Tributary system enforced by the Chinese imperial court.[52] and other Austronesian islands.[49]Thailand. trade with China is believed to have begun in the Tang dynasty.The discovery of iron at around the 1st century AD created significant social and economic changes which allowed settlements to grow larger and develop new social patterns. but grew more extensive during the Song dynasty.[51] By the 2nd millennium CE.[51][49] .[51] They also traded with Vietnam. but did not actually translate into political or military control.[53] Based on archeological findings. Among the early Philippine polities. characterized by social stratification and specialization. most importantly the Indianized kingdoms of Malaysia and Java. this arrangement fulfilled the requirements for trade with China.[48] Some of these polities. the various dynasties of China. particularly the coastal settlements at or near the mouths of large rivers.[49] eventually developed substantial trade contacts with the early trading powers of Southeast Asia. the Muslim Sultanate of Brunei.[51] These "tributary states" nominally acknowledged the Sinocentric system which saw China and the imperial court as the cultural center of the world.

(others include Afghanistan and Southern Vietnam) just at the outer edge of what is considered the "Greater Indian cultural zone". legendary accounts often mention the interaction of early Philippine polities with the Srivijaya empire. a class of "freemen".[55] The early polities of the Philippine archipelago were typically characterized by a three-tier social structure.[54] The exact scope and mechanisms of Indian cultural influences on early Philippine polities are still the subject of some debate among Southeast Asian historiographers.[48][49] Although different cultures had different terms to describe them. through early Philippine polities' relations with the Hindu Majapahit empire.[48][55] but the current scholarly consensus is that there was probably little or no direct trade between India and the Philippines.[48] The Philippine archipelago is thus one of the countries. this three-tier structure invariably consisted of an apex nobility class. for extensive trade with the Majapahit empire.[54] filtered in during the 10th through the early 14th centuries.[48][55] and Indian cultural traits.Regarding the relations of early Philippine polities with the various state-level polities of Indonesia and Malaysia. . but there is not much archeological evidence to definitively support such a relationship. on the other hand. such as linguistic terms and religious practices.[48] Considerable evidence exists.

[49] the more senior or respected among them would be recognized as a "paramount datu". either to form a larger settlement[48] or a geographically looser alliance group. and the temple complex of Medang in Java.and a class of dependent debtor-bondsmen called "alipin" or "oripun.[47] Although the precise political relationships between these polities is unclear in the text of the inscription. before 900–1589) and two to three other settlements believed to be located somewhere near Tondo.[51][48][56] EARLY HISTORIC POLITIES The earliest historical record of these kingdoms is the Laguna Copperplate Inscription."[48][49] Among the members of the nobility class were leaders who held the political office of "Datu. variedly called a Lakan." which was responsible for leading autonomous social groups called "barangay" or "dulohan".[48] Whenever these barangays banded together. Sultan. or simply a more senior Datu. Tondo was led by the paramount . Rajah. Diwata in Mindanao. which indirectly refers to the Tagalog polity of Tondo(c. the artifact is usually accepted as evidence of intra.[47][51][49] By the arrival of the earliest European ethnographers during the 1500s.and inter-regional political linkages as early as 900 CE. as well as a settlement near Mt.

the people of Madja-as often raided the port cities of southern China and warred with the Chinese navy. 1200–1569) was founded following a civil war in collapsing Srivijaya. Song dynasty traders visited Ma-i annually. and their accounts described Ma-i's geography.[62][verification needed] Madja-as was founded on Panay island (named after the destroyed state of Pannai allied under Srivijaya which was located in Sumatra). 1001 CE.[65] Both the . there is some dispute about Mai's possible location. Afterwards. sharing a monopoly with the Rajahnate of Maynila over the trade of Ming dynasty[57]products throughout the archipelago. with some scholars believing it was located in Bay. called Makatunao. Butuan attained prominence under the rule of Rajah Sri Bata Shaja. trade products. Puti. before 971 – after 1339).[53] who was from a Buddhist ruling-class governing a Hindu nation. before 1001–1756) in northeastern Mindanao which is the first polity from the Philippine archipelago recorded as having sent a tribute mission to the Chinese empire – on March 17.[37] The official history of the Song dynasty next refers to the Rajahnate of Butuan (c. This state grew wealthy by making use of the inter-island shipping within the archipelago. 1200–1565) was a neighbor of Madja-as in the Visayas led by Rajamuda Sri Lumay.[60] Because the descriptions of Mai's location in these accounts are not clear. Laguna. a monarch with partial Tamil descent. Marikudo. and the trade behaviors of its rulers.ruler called a "Lakan".[51][49] It had grown into a major trading hub. Its founding datu. had purchased land for his new realms from the aboriginal Ati hero.[58][59] The next historical record referred a location in the Philippines is Volume 186 of official history of the Song dynasty which describes the "country" of Ma-i (c.[51] This trade was significant enough that the Yongle Emperor appointed a Chinese governor named Ko Ch'a-lao to oversee it.[61] and others believing it was on the island of Mindoro. This state became powerful due to the local goldsmith industry and it also had commercial ties and a diplomatic rivalry with the Champa civilization. wherein loyalists of the Malay datus of Srivijaya defied the invading Chola dynasty and its puppet-Rajah. and set up a guerrilla-state in the islands of the Visayas. The Kedatuan of Madja-as (c.[63] The Rajahnate of Cebu[64] (c.

Rajahnates of Butuan and Cebu were allied to each other and they also maintained
contact and had trade routes with Kutai, a Hindu country[66] in south Borneo established
by Indian traders.[67]

The earliest legendary date mentioning the Rajahnate of Maynila (c. 1258–1571) on the
island of Luzon across the Pasig River from Tondo has to do with the naval victory of the
Bruneian Rajah Ahmad over the Majapahit Rajah Avirjirkaya, who ruled a prior
pre-Muslim settlement in the same location.[51] Chinese records of this period also
mention a polity called "Luzon." This is believed to be a reference to Maynila
since Portuguese and Spanish accounts from the 1520s explicitly state that "Luçon" and
"Maynila" were "one and the same",[51] although some historians argue that since none
of these observers actually visited Maynila, "Luçon" may simply have referred to all the
Tagalog and Kapampangan polities that rose up on the shores of Manila Bay.[68] Either
way, from the early 1500s to as late as the 1560s, this seafaring people was referred to
in Portuguese Malacca as Luções, and they participated in trading ventures and military
campaigns in Burma, Malacca and Eastern Timor where they were employed as traders
and mercenaries.

In northern Luzon, Caboloan (Pangasinan) (c. 1406–1576) sent emissaries to China in
1406–1411,[75] and it also traded with Japan.[76]

The 1300s saw the arrival and eventual spread of Islam in the Philippine archipelago. In
1380, Karim ul' Makdum and Shari'ful Hashem Syed Abu Bakr, an Arab trader born in
Johore, arrived in Sulu from Malacca and established the Sultanate of Sulu by
converting Sulu's rajah, Rajah Baguinda Ali and marrying his daughter.[77][78] At the
end of the 15th century, Shariff Mohammed Kabungsuwan of Johor introduced Islam in
the island of Mindanao and established the Sultanate of Maguindanao. The sultanate
form of government extended further into Lanao.[79]

Islam then started to spread out of Mindanao in the south and went into Luzon in the
north. Manila in Luzon was Islamized during the reign of Sultan Bolkiah in 1485 to 1521.
This was accomplished because the Sultanate of Brunei subjugated Tondo by
defeating Rajah Gambang in battle and thereafter installing the Muslim rajah, Rajah
Salalila to the throne and by establishing the Bruneian puppet-state of the Rajahnate of

Maynila.[80][81][82][83] Sultan Bolkiah also married Laila Mecana, the daughter of Sulu
Sultan Amir Ul-Ombra to expand Brunei's influence in both Luzon and
Mindanao.[84] The Muslims then proceeded to wage wars and conduct slave-raids
against the Visayans.[85] Participating in the Muslim raids, the Sultanate of
Ternateconsequently destroyed the Kedatuan of Dapitan in Bohol.[86] The Rajahnates
of Butuan and Cebu also endured slave raids from, and waged wars against the
Sultanate of Maguindanao.[87] Simultaneous with these slave-raids, was the rebellion of
Datu Lapu-Lapu of Mactan against Rajah Humabon of Cebu.[88] There was also a
simmering territorial conflict between the Polity of Tondo and the Bruneian vassal-state,
the Islamic Rajahnate of Maynila, to which the ruler of Maynila, Rajah Matanda, sought
military assistance against Tondo from his relatives at the Sultanate of Brunei.[89]

The rivalries between the Datus, Rajahs, Sultans, and Lakans eventually eased Spanish
colonization. Furthermore, the islands were sparsely populated[90] due to consistent
natural disasters[91] and inter-kingdom conflicts. Therefore, colonization was made easy
and the small states of the archipelago quickly became incorporated into the Spanish
Empire and were Hispanicized and Christianized.[92]

COLONIAL ERA
Journalist Alan Robles has opined, "Colonialism created the Philippines, shaped its
political culture and continues to influence its mindset. The 333 years under Spain and
nearly five decades under the USA decisively moulded the nation".[93] Anthropologist
Prospero Covar has observed, "Our thinking, culture, and psychology became virtually
westernized, when we were, in fact, Asians."[94]

claimed the islands for Spain and was then killed at the Battle of Mactan.[97] They also defeated the Chinese warlord Limahong.[98][99] To counteract the Islamization of the Philippines. the Spanish then conducted the Castilian War which was aimed against the Sultanate of Brunei[100][101] and war was also waged against the Sultanate of Ternate and Tidore(in response to Ternatean slaving and piracy against Spain's allies: Bohol and Butuan). they established Manila as the capital of the Spanish East Indies (1571). Portuguese explorer Ferdinand Magellan's expedition arrived in the Philippines.[96] Under Spanish rule. After relocating to Panay island and consolidating a coalition of native Visayan allies. the Spaniards then invaded Islamic Manila.SPANISH RULE In 1521.[95] Colonization began when Spanish explorer Miguel López de Legazpi arrived from Mexico in 1565 and formed the first Hispanic settlements in Cebu. Hispanic soldiers and Latin-American recruits.[102] The Spanish considered their war with the . therein they put down the Tondo Conspiracy and exiled the conspirators to Guam and Guerrero.

the survivors of the first circumnavigation of the world. the largest wooden ships ever built. as well as his descendants. chili peppers. New towns were also created[99] and Catholic missionaries converted most of the lowland inhabitants to Christianity.[112]. From 1565 to 1821. Within the Philippines.[108] The galleons sailed once or twice a year. The Spanish expeditions into the Philippines were also part of a larger Ibero-Islamic world conflict[103] that included a rivalry with the Ottoman Caliphate which had a center of operations at its nearby vassal. Trade introduced foodstuffs such as maize. Koxinga. The Manila galleons.[113] They also founded schools. ruler of the Kingdom of Tungning. hospitals and churches which were built along the Earthquake Baroque architectural style.[106] Spanish rule eventually contributed significantly to bringing political unity to the fragmented states of the archipelago. settlers were sent to the Pacific islands of Palau and the Marianas.[107] The Manila galleons were accompanied with a large naval escort as it traveled to and from Manila and Acapulco. were constructed in Bicol and Cavite. fortifications were also set up in Taiwan and the Maluku islands. between the 16th and 19th centuries. along with the newly Christianized Papuan natives of the Moluccas. a centuries-long campaign to retake and rechristianize the Spanish homeland which was invaded by the Muslims of the Umayyad Caliphate. Meanwhile. chocolate and pineapples from Mexico and Peru. tomatoes. the Spaniards constructed and manned a network of military fortresses (called "Presidios") across the archipelago. a university. the Sultanate of Aceh.[105] However.Muslims in Southeast Asia an extension of the Reconquista. These were abandoned and the Spanish soldiers.[114] To defend their settlements. from Latin America. the Marquisate of Buglas was established and the rule of it was awarded to Sebastian Elcano and his crew.[104] Consequently. the Philippines was governed as a territory of the Mexico-based Viceroyalty of New Spain and then was administered directly from Madrid after the Mexican War of Independence. potatoes.[110] settlers[111] and military reinforcements destined for the Philippines. the planned invasion was aborted. withdrew back to the Philippines in order to re-concentrate their military forces because of a threatened invasion by the Japan-born Ming-dynasty loyalist.[109] The Manila Galleons brought with them goods.[115] The Spanish also decreed the introduction of free public schooling in .

[116] As a result of these policies the Philippine population increased exponentially. In the last quarter of the 19th century.1863. Spain quelled various indigenous revolts.[117][118] During its rule. the English. the Portuguese and the Muslims of Southeast Asia. Spain conquered portions of Mindanao and the Moro Muslims in the Sulu Sultanate formally recognized Spanish sovereignty. Those challengers were fought off despite the hostile forces having encircled the Philippine archipelago in a crescent formed from Japan to Indonesia. Spanish rule was restored following the 1763 Treaty of Paris. There were also several external military challenges from Chinese and Japanese pirates.[92][119][120] The Spanish–Moro conflict lasted for several hundred years. . British forces occupied Manila from 1762 to 1764 in an extension of the fighting of the Seven Years' War. the Dutch.

Andrés Bonifacio in 1892 established the secret society called the Katipunan. In 1898. and the First Philippine Republic was established in the Barasoain Church in the following year. lobbying for political reforms in the Philippines. The ideals of revolution also began to spread through the islands.[126] As attempts at reform met with resistance. the Magdalo of Cavite province. on charges of rebellion. José Rizal.In the 19th century. Aguinaldo declared Philippine independence from Spain in Kawit. and Mariano Ponce. Philippine ports opened to world trade and shifts started occurring within Filipino society. eventually came to challenge Bonifacio's position as the leader of the revolution and Emilio Aguinaldo took over.[92] . Criollo dissatisfaction resulted in the 1872 Cavite Mutiny that was a precursor to the Philippine Revolution. organized by Marcelo H. Rizal was eventually executed on December 30. and Jacinto Zamora (collectively known as Gomburza)—were accused of sedition by colonial authorities and executed. José Burgos. 1896. A faction of the Katipunan. del Pilar.[123][124] This would inspire a propaganda movement in Spain. who sought independence from Spain through armed revolt. Cavite on June 12. 1898.[125] Bonifacio and the Katipunan started the Philippine Revolution in 1896. Many Spaniards born in the Philippines (criollos)[121] and those of mixed ancestry (mestizos) became wealthy and an influx of Latin American immigrants[122] opened up government positions traditionally held by Spaniards born in the Iberian Peninsula (peninsulares).[92][123][124][125] Revolutionary sentiments were stoked in 1872 after three priests—Mariano Gómez. the Spanish–American War began in Cuba and reached the Philippines.

the Cantonal Republic of Negros in the Visayas.[129][130][131][132] The Americans then suppressed other rebellious sub-states: mainly.[127] A compensation of US$20 million was paid to Spain according to the terms of the 1898 Treaty of Paris.[129] The war resulted in the deaths of tens of thousands of combatants as well as a couple of hundred thousand civilians. and the archipelago was administered under an Insular Government. with the expansion of Philippine cinema and literature. the Philippine–American War broke out.AMERICAN RULE The islands were ceded by Spain to the United States as a result of the latter's victory in the Spanish–American War. and the Republic of Zamboanga in Mindanao. mostly from a cholera epidemic.[135][136][137] Daniel Burnham built an architectural plan for Manila which would have transformed it into a modern . as well as the insurgent Tagalog Republic. the waning Sultanate of Sulu. a renaissance in Philippine culture occurred.[128] As it became increasingly clear the United States would not recognize the nascent First Philippine Republic. the First Republic was defeated.[133][134] During this era.

in the process. retaking territory conquered by Imperial Japan. The Allied Forces then employed a strategy of island hopping towards the Philippine archipelago. Laurel was established as a collaborator state. the Philippines was granted Commonwealth status with Manuel Quezon as president.[139][140] JAPANESE RULE Plans for independence over the next decade were interrupted by World War II when the Japanese Empire invaded and the Second Philippine Republic of José P. .[138] In 1935. Many atrocities and war crimes were committed during the warsuch as the Bataan Death March and the Manila massacre that culminated with the Battle of Manila. Quezon died in exile in the United States and Sergio Osmeña succeeded him.city.[141] In 1944. He designated a national language and introduced women's suffrage and land reform.

the Japanese Empire only controlled 12 out of 48 provinces. the Philippines was officially recognized by the United States as an independent nation through the Treaty of Manila.S. 1945. on July 4.From mid-1942 through mid-1944. Navy submarines and a few parachute drops.[147][148][149] POSTCOLONIAL PERIOD On October 11. according to gross tonnage sunk.[145][146] Allied troops defeated the Japanese in 1945. the Filipino guerrilla resistance[142][143] had been supplied and encouraged by U. the largest naval battle in history. the Philippines became one of the founding members of the United Nations.[152][153] Magsaysay's . jungles and mountains – thus. many Filipinos hoped and believed that liberation from the Japanese would bring them freedom and their already-promised independence. 1946. the Battle of Leyte Gulf. Eventually. during the presidency of Manuel Roxas. By the end of the war it is estimated that over a million Filipinos had died.[144] While remaining loyal to the United States.[6] Disgruntled remnants of the communist Hukbalahap[151] continued to roam the countryside but were put down by President Elpidio Quirino's successor Ramon Magsaysay.[150] The following year. occurred when Allied forces started the liberation of the Philippines from the Japanese Empire. so that the guerrillas could harass the Japanese Army and take control of the rural areas.

Marcos' chief rival. Marcos eventually called snap presidential elections in 1986.[159] Nearing the end of his term. and human rights violations but the US were steadfast in their support.[161] On August 21.[154] which was continued by Diosdado Macapagal. Garcia. Marcos declared Martial Lawon September 21. Macapagal lost the presidential election to Ferdinand Marcos.[157][158] In 1965. Carlos P. Jr. leading to the People Power Revolution. opposition leader Benigno Aquino. censorship. initiated the Filipino First Policy.. Corazon Aquino was recognized as president. Marcos initiated numerous infrastructure projects but was accused of massive corruption and embezzling billions of dollars in public funds. but the results were widely regarded as fraudulent. the date of Emilio Aguinaldo's declaration. was assassinated on the tarmac at Manila International Airport.[160] This period of his rule was characterized by political repression.[162] Marcos was proclaimed the winner.[155][156]while furthering the claim on the eastern part of North Borneo. 1972. Early in his presidency. with celebration of Independence Day moved from July 4 to June 12. 1983.successor. Marcos and his allies fled to Hawaii and Aquino's widow.[162][163] .

CONTEMPORARY HISTORY .

forces withdrew from the Philippines.[186] By comparison.S. such as the peace agreement with the Moro National Liberation Front in 1996.[170][171] After introducing a constitution that limited presidents to a single term. a persistent communist insurgency. Ramos.[168][169] The administration also faced a series of natural disasters. Aquino did not stand for re-election. due to the rejection of the U.[173] However.[178][179][180] The government had announced a war against the Moro Islamic Liberation Front in March 2000 and neutralized the camps including the headquarters of the insurgents. the political stability and economic improvements. Joseph Estrada assumed office in June 1998 and managed to regain the economy from −0.5% (1986-2001) if we include only those years when democracy .S.[166][167] and leading to the official transfer of Clark Air Base in November 1991 and Subic Bay to the government in December 1992. government corruption. coup attempts. including the eruption of Mount Pinatubo in June 1991.6% from 1965 to 2001 or 3. who won the Philippine presidential election held in May 1992. disasters. Aquino was succeeded by Fidel V.[183] accusations of alleged corruption.4% by 1999 amidst the 1997 Asian financial crisis. the economy experienced a phenomenal growth of 4-7% averaging at 5.33% from 2002 to 2007 with the completion of infrastructure projects like LRT Line 2 in 2004[185] and managed to avoid the Great Recession. Gloria Macapagal-Arroyo on January 20.[164] and a military conflict with Moro separatists.[175][176] On his Presidency the death penalty was revived in the light of the Rape-slay case of Eileen Sarmienta and Allan Gomez in 1993 and the first person to be executed was Leo Echegaray in 1999. with a 3.6% growth to 3. the Philippines has been growing an average of 3. 2001.[181][182] In the middle of ongoing conflict with the Abu Sayyaf.[165] During Corazon Aquino's administration.[184] In Arroyo's 9-year administration.[174] were overshadowed by the onset of the 1997 Asian financial crisis. During this period the country's economic performance remained modest. U.[177] Ramos' successor. and a stalled impeachment process.6%[172] percent GDP growth rate. Estrada's administration was overthrown by the 2001 EDSA Revolution and succeeded by his Vice President.The return of democracy and government reforms beginning in 1986 were hampered by national debt. Bases Extension Treaty.

2013. Typhoon Yolanda (Haiyan) struck and heavily devastated the country.[187][188][189][190] On November 23.87%. 2015.[204][205] . The first major issue he dealt with was the 2010 Manila hostage crisis that caused deeply strained relations between Manila and Hong Kong for a time. territorial disputes in eastern Sabah and the South China Sea have escalated. And this jumpstart from a sluggish economy for almost 5 decades that left it behind by its neighbors in the 1960s would prove to be the Philippines rise from being the sick man of Asia to become one of the "Tiger Cub Economy" for the next decade after her administration. was signed. 2014.[194][195][196] On May 15.[193] However. 2012. the Philippines implemented the Enhanced Basic Education Act of 2013. 2009. Maguindanao putting efforts to pass the Bangsamoro Basic Law into law in an impasse. 44 members of the Philippine National Police-Special Action Forcewere killed after a clash took place in Mamasapano.[200][201][202][203] On January 25. commonly known as K–12 program. It added two more years to the country's ten-year schooling system for primary and secondary education. especially in the Visayas. it was tied with graft and political scandals like the Hello Garci scandal pertaining to the alleged manipulation of votes in the 2004 presidential elections. the Enhanced Defense Cooperation Agreement. paving the way for the return of United States Armed Forces bases into the country.was already achievement in the Philippines on 1986.[172] Nevertheless.[197] On November 8.[191][192] Benigno Aquino III won the 2010 national elections and served as the 15th President of the Philippines. The Framework Agreement on the Bangsamoro was signed on October 15. as the first step of the creation of an autonomous political entity named Bangsamoro. 2013.7–1.[198][199] When the United States President Barack Obama visited the Philippines on April 28. The improvement of the Philippine annual growth rate from her predecessors (since Marcos Regime to Estrada Administration) was around 1. the Maguindanao massacre led to the murder of 34 journalists.

the death toll for the Philippine Drug War passed 8. 2016.000 people.[207] After winning the Presidency.[206] On July 12. the Permanent Court of Arbitration ruled in favor of the Philippines in its case against China's claims in the South China Sea.[208] By March 2017.679 killed in legitimate police operations and the rest the government claims to be homicide cases.[209][210][211] . Duterte launched an intensified anti-drug campaign to fulfill a campaign promise of wiping out criminality in six months. with 2.Former Davao City mayor Rodrigo Duterte of PDP–Laban won the 2016 presidential election becoming the first president from Mindanao.

Build" program. which includes six air transport projects.[215] The Philippines is expected to spend $160 billion to $180 billion up to 2022 for the public investments in infrastructure. It will create more jobs and business opportunities. four power projects. which aims to usher the Philippines into a new "golden age" of infrastructure.[213][214] The Build.Duterte initiated the "Build. and four water transport projects.[216] . would sustain the country’s economic growth and accelerate poverty reduction. which. 11 water supply and irrigation projects. It also includes four major flood management projects. 12 rail transport projects. Build. and three other public infrastructure projects. Build program is made up of 75 projects.[212] The construction industry needs two million more workers to sustain the program. in turn. Build.

and the House of Representatives.[220] . serving as the lower house. The president is elected by popular vote for a single six-year term.POLITICS The Philippines has a democratic government in the form of a constitutional republic with a presidential system. with members elected to a six-year term.[220] Senators are elected at large while the representatives are elected from both legislative districts and through sectoral representation.[220] The judicial power is vested in the Supreme Court. composed of a Chief Justice as its presiding officer and fourteen associate justices. which is largely free from the national government. unicameral.[217] It is governed as a unitary state with the exception of the Autonomous Region in Muslim Mindanao (ARMM). There have been attempts to change the government to a federal. all of whom are appointed by the President from nominations submitted by the Judicial and Bar Council. serving as the upper house. or parliamentary government since the Ramos administration. during which he or she appoints and presides over the cabinet.[220] The bicameralCongress is composed of the Senate. with members elected to a three-year term.[218][219] The President functions as both head of state and head of government and is the commander-in-chief of the armed forces.

the Philippines has been elected several times into the Security Council.FOREIGN RELATIONS The Philippines' international relations are based on trade with other nations and the well-being of the 10 million overseas Filipinos living outside the country. Carlos P.[221] As a founding and active member of the United Nations.[225] It has hosted several summits and is an active contributor to the direction and policies of the bloc.[222][223][224] In addition to membership in the United Nations. Romulo was a former President of the United Nations General Assembly.[226] . particularly in East Timor. an organization designed to strengthen relations and promote economic and cultural growth among states in the Southeast Asian region. The country is an active participant in the Human Rights Council as well as in peacekeeping missions. the Philippines is also a founding and active member of ASEAN (Association of Southeast Asian Nations).

[232][233] relations with Middle Eastern countries are friendly as seen in the continuous employment of more than two million overseas Filipinos living there.[221] Japan. controversies related to the presence of the now former U. and concerns of expanding Chinese influence.[228] Recent foreign policy has been mostly about economic relations with its Southeast Asian and Asia-Pacific neighbors. the biggest contributor of official development assistance to the country. however.[221] It supported the United States during the Cold War and the War on Terror and is a major non-NATO ally. and the Non-Aligned Movement.[234] With communism no longer the threat it once was.[221] The Philippines is an active member of the East Asia Summit (EAS). Shared democratic values ease relations with Western and European countries while similar economic concerns help in relations with other developing countries. Issues involving Taiwan. Despite this history of goodwill. once hostile relations in the 1950s between the Philippines and China have improved greatly. Historical ties and cultural similarities also serve as a bridge in relations with Spain. much of the animosity inspired by memories of World War II has faded. still encourage a degree of caution.[220] It is also seeking to strengthen relations with Islamic countries by campaigning for observer status in the Organisation of Islamic Cooperation. Although historical tensions still exist on issues such as the plight of comfort women.The Philippines values its relations with the United States.S. military bases in Subic Bay and Clark and the current Visiting Forces Agreement have flared up from time to time.[229][230][231] Despite issues such as domestic abuse and war affecting overseas Filipino workers.[227] is thought of as a friend. the Group of 24. the Asia-Pacific Economic Cooperation (APEC).[228] Relations with other nations are generally positive.[235][236] . the Spratly Islands. the Latin Union.

the Moro National Liberation Front. Vietnam 2.1%. China 2. the Philippine Army.1 percent of GDP.2% and South Korea 2.5%. The Philippines supported . Other more militant groups like the Moro Islamic Liberation Front.[248][249] At 1.MILITARY The Armed Forces of the Philippines (AFP) are responsible for national security and consist of three branches: the Philippine Air Force. and the Philippine Navy (includes the Marine Corps). particularly on the southern island of Mindanao. the largest separatist organization.[241][242] In the Autonomous Region in Muslim Mindanao.[240] Civilian security is handled by the Philippine National Police under the Department of the Interior and Local Government (DILG). is now engaging the government politically.[244][245][246][247] Their presence decreased due to successful security provided by the Philippine government. the Philippines spent less on its military forces than the regional average.[237][238][239] The Armed Forces of the Philippines are a volunteer force. A mutual defense treaty between the two countrieswas signed in 1951.6%.[250][251] The Philippines has been an ally of the United States since World War II. As of 2014 Malaysia and Thailand were estimated to spend 1. the communist New People's Army. and the Abu Sayyaf have previously kidnapped foreigners for ransom.

CALABARZON was the most populated region while the National Capitol Region (NCR) the most densely populated. 145 cities.[255][256] ADMINISTRATIVE REGIONS Regions in the Philippines are administrative divisions that serve primarily to organize the provinces of the country for administrative convenience. and 42. The Philippines is divided into 17 regions (16 administrative and 1 autonomous). It was a member of the now dissolved SEATO.[253] ADMINISTRATIVE DIVISIONS The Philippines is divided into three island groups: Luzon. These are further divided into 17 regions. usually (but not always) in the city designated as the regional center. Most government offices are established by region instead of individual provincial offices. the Philippines was part of the coalition that gave support to the United States in Iraq. 1. Section 2 of Republic Act No. a group that was intended to serve a role similar to NATO and that included Australia. As of 2015. and Mindanao. 81 provinces. 5446 asserts that the definition of the territorial sea around the Philippine archipelago does not affect the claim over the eastern part of Sabah. France. Pakistan.American policies during the Cold War and participated in the Korean and Vietnam wars. and the United States. Visayas.036 barangays. New Zealand. .489 municipalities.[252] After the start of the War on Terror. Thailand.[254] In addition. the United Kingdom.

545.1 300/km2 (780/sq 6th Region I 4.82 sq mi) 774 % q mi) National 2n 619.47 sq mi) 03 q mi) Region Bicol 18.200/s 1st IV ON 4.2 4.31 km2 (6.689.496.102.414.873. 12.10 Most Populous Regions of the Philippines (2015)[257] Popula % of Ra Design tion Population Name Area Popula nk ation (as of density tion 2015) Region CALABARZ 16.893.02 km2 (7.51 5.600/s 4th 5.75 21.16 km2 (3.98% VII Visayas 0.877.000/km2 (54.63 km2 (8.11 510/km2 (1.27 850/km2 (2.00 sq mi) 89 mi) Ilocos 16. 14.90 6.01 5.155. 11.50% 200/km2 (520/sq .014.3 230/km2 (600/sq 8th 4.69 4.873.90 sq mi) 177 % q mi) Region Central 10.9 320/km2 (830/sq 5th 5.51 14.796.22 12.49 11.9 600/km2 (1.82 sq mi) 28 mi) Region Davao 20.56 sq mi) 02 mi) 9th Region SOCCSKS 22.041.357.3 240/km2 (620/sq 7th 4.0 NCR Capital d sq mi) 253 % 00/sq mi) Region Region Central 22.42 km2 (7.86 4.513.91 4.82 km2 (7.30 km2 (8.85% XI Region 0.74% V Region 0.31 km2 (6.64% X Mindanao 3.04 sq mi) 18 mi) Region Northern 20.026.98% Region 4.218.300/s 3rd III Luzon 9.57 km2 (239.

29 sq mi) 47 mi) .2 350/km2 (910/sq 4.95 4. XII ARGEN 2.477.43% h VI Visayas 3.828.97 km2 (4.43 sq mi) 76 mi) 10t Region Western 12.

of 343.954 meters (9.606 sq mi)[5].[220][259] It is located between 116° 40'.GEOGRAPHY The Philippines is an archipelago composed of about 7. and 126° 34' E longitude and 4° 40' and 21° 10' N latitude and is bordered by the Philippine Sea[260] to the east.549 mi) of coastline makes it the country with the 5th longest coastline in the world. including inland bodies of water.[264][265] The Galathea Depth in .641 islands[258] with a total land area.[220] Most of the mountainous islands are covered in tropical rainforest and volcanic in origin. The Moluccas and Sulawesi are located to the south-southwest and Palau is located to the east of the islands. The 36. The island of Borneo[263] is located a few hundred kilometers southwest and Taiwan is located directly to the north.692 ft) above sea level and is located on the island of Mindanao.448 square kilometers (132.289 kilometers (22. and the Celebes Sea[262] to the south. It measures up to 2. The highest mountain is Mount Apo. the South China Sea[261] to the west.

the Philippines experiences frequent seismic and volcanic activity. The Benham Plateau to the east in the Philippine Sea is an undersea region active in tectonic subduction. and the Moro Gulf are other important bays. The trench is located in the Philippine Sea. The San Juanico Strait separates the islands of Samar and Leyte but it is traversed by the San Juanico Bridge.[268] Situated on the western fringes of the Pacific Ring of Fire. The last major earthquake was the 1990 Luzon earthquake. Subic Bay. the Davao Gulf.[266] The longest river is the Cagayan River in northern Luzon. by the Pasig River. the largest lake in the Philippines. upon the shore of which the capital city of Manila lies. is connected to Laguna de Bay.[267] Manila Bay. though most are too weak to be felt.[270] .[269] Around 20 earthquakes are registered daily.the Philippine Trench is the deepest point in the country and the third deepest in the world.

There are many active volcanoes such as the Mayon Volcano, Mount Pinatubo,
and Taal Volcano. The eruption of Mount Pinatubo in June 1991 produced the second
largest terrestrial eruption of the 20th century.[271] Not all notable geographic features
are so violent or destructive. A more serene legacy of the geological disturbances is
the Puerto Princesa Subterranean River, the area represents a habitat for biodiversity
conservation, the site also contains a full mountain-to-the-sea ecosystem and has some
of the most important forests in Asia.[272]

Due to the volcanic nature of the islands, mineral deposits are abundant. The country is
estimated to have the second-largest gold deposits after South Africa and one of the
largest copper deposits in the world.[273] It is also rich in nickel, chromite, and zinc.
Despite this, poor management, high population density, and environmental
consciousness have resulted in these mineral resources remaining largely
untapped.[273] Geothermal energy is a product of volcanic activity that the Philippines
has harnessed more successfully. The Philippines is the world's second-biggest
geothermal producer behind the United States, with 18% of the country's electricity
needs being met by geothermal power.[274]

BIODIVERSITY

The Philippines' rainforests and its extensive coastlines make it home to a diverse range
of birds, plants, animals, and sea creatures.[275] It is one of the ten most
biologically megadiverse countries.[276][277][278] Around 1,100 land vertebrate species
can be found in the Philippines including over 100 mammal species and 170 bird species
not thought to exist elsewhere.[279] The Philippines has among the highest rates of
discovery in the world with sixteen new species of mammals discovered in the last ten
years. Because of this, the rate of endemism for the Philippines has risen and likely will

continue to rise.[280] Native mammals include the palm civet cat, the dugong, the cloud
rat and the Philippine tarsier associated with Bohol.

Although the Philippines lacks large mammalian predators, it does have some very
large reptiles such as pythons and cobras, together with gigantic saltwater crocodiles.
The largest crocodile in captivity, known locally as Lolong, was captured in the southern
island of Mindanao.[281][282] The national bird, known as the Philippine eagle has the
longest body of any eagle, it generally measures 86 to 102 cm (2.82 to 3.35 ft) in length
and weighs 4.7 to 8.0 kg (10.4 to 17.6 lb).[283][284] The Philippine eagle is part of

the Accipitridae family and is endemic to the rainforests of Luzon. . Samar. Leyte and Mindanao.

and seaweeds.[275][290] With an estimated 13.400 respectively.425 sq mi) producing unique and diverse marine life.[294]According to Conservation International. an important part of the Coral Triangle. 3. Forest cover declined from 70% of the Philippines's total land area in 1900 to about 18.500 plant species in the country.000 square kilometers (849.3% in 1999."[291] . crabs. in its entirety. placing it among the top priority hotspots for global conservation. faces a catastrophic extinction rate of 20% by the end of the 21st century.200 of which are unique to the islands.[291][292] Deforestation. including many rare types of orchids and rafflesia. Philippine waters also sustain the cultivation of pearls. often the result of illegal logging. is an acute problem in the Philippines. both a hotspot and a megadiversity country.200.[275][279] New records[285][286] and species discoveries[287][288][289] continuously increase these numbers underlining the uniqueness of the marine resources in the Philippines. The Tubbataha Reef in the Sulu Sea was declared a World Heritage Site in 1993. "the country is one of the few nations that is.Philippine maritime waters encompass as much as 2.[255] The total number of corals and marine fish species was estimated at 500 and 2. which the Philippines is part of.[293] Many species are endangered and scientists say that Southeast Asia.[279] Philippine rainforests boast an array of flora.

[220][296] The average yearly temperature is around 26.[295] Sitting astride the typhoon belt.000 millimeters (200 in) in the mountainous east coast section but less than 1. The southwest monsoon (from May to October) is known as the Habagat.6 °C (79. the Amihan.[297] with around nineteen typhoons entering the Philippine area of responsibility in a typical year and eight or nine making landfall. tag-ulan. location in terms of latitude and longitude is not a significant factor. and the dry winds of the northeast monsoon (from November to April).0 in) of rainfall within a 24-hour period in Baguio. and tag-lamig. the rainy season from June to November.CLIMATE The Philippines has a tropical maritime climate that is usually hot and humid. most of the islands experience annual torrential rains and thunderstorms from July to October.500 meters (4.[298][299][300] Annual rainfall measures as much as 5. or west of the country.9 °F). temperatures at sea level tend to be in the same range. making it a popular destination during hot summers. The coolest month is January.[295] In considering temperature.168 millimeters (46.9 °F). south. The average annual temperature of Baguio at an elevation of 1.[297] The wettest known tropical cyclone to impact the archipelago was the July 1911 cyclone.000 millimeters (39 in) in some of the sheltered valleys. east. There are three seasons: tag-init or tag-araw. the warmest is May.3 °C (64.[301] Bagyo is the local term for a tropical cyclone in the Philippines. Altitude usually has more of an impact. Whether in the extreme north. the hot dry season or summer from March to May.900 ft) above sea level is 18.[301] . which dropped over 1. the cool dry season from December to February.[295] Temperatures usually range from 21 °C (70 °F) to 32 °C (90 °F) although it can get cooler or hotter depending on the season.

about 3% of national GDP went towards infrastructure development – much lower than many of its neighbors.53 million registered motor vehicles with registrations increasing at an average annual rate of 4.TRANSPORTATION The transportation infrastructure in the Philippines is relatively underdeveloped.093 kilometers (37. with only 61. jeepneys. there were about 5.[333][334] There are 216. In 2007.961 mi) of roads paved.457 mi) of roads in the Philippines. taxis.387 kilometers (134.[336] . This is partly due to the mountainous terrain and the scattered geography of the islands. and motorized tricycles are commonly available in major cities and towns. In 2013.55%.[335] Buses. but also the result of consistently low investment in infrastructure by successive governments.

are the major airlines serving most domestic and international destinations. Asia's oldest commercial airline still operating under its original name. Leyte. A few transportation systems are under development: DOST-MIRDC and UP are implementing . the leading low-cost airline. Philippine Airlines. The region is served by three rapid transit lines: LRT-1.[339] Ninoy Aquino International Airport (NAIA) serves the Greater Manila Area together with Clark International Airport.[343][344]the North Luzon Expressway. and Mindanao. South Luzon Expressway. Rail freight transportation was almost non-existent as of 2014. connecting the islands of Luzon. railways served major parts of Luzon.[345][346][347][348][349][350] Rail transport in the Philippines only plays a role in transporting passengers within Metro Manila and the province of Laguna. Samar. especially in tobacco and sugar cane production. and railroad services were available on the islands of Cebu and Negros.[340][341][342] Expressways and highways are mostly located on the island of Luzon including the Pan-Philippine Highway. and Cebu Pacific.[351][352][353] In the past. Railways were also used for agricultural purposes.The Civil Aviation Authority of the Philippines manages airports and implementation of policies regarding safe air travel[337][338] with 85 public airports operational as of 2014. and LRT-2 and MRT-3. and the Subic–Clark–Tarlac Expressway.

Batangas. inter-island travel using watercraft is often necessary.[357][358][359] As an archipelago. Cagayan de Oro. Davao. was also being tested as of 2015.pre-feasibility studies on Automated Guideway Transit.[361] 2GO Travel and Sulpicio Lines serve Manila.[354][355][356] A so-called Hybrid Electric Road Train which is a long bi-articulated bus. and Zamboanga.[360] The busiest seaports are Manila.[362] The Pasig River Ferry Service serves the major rivers in Metro Manila. Mandaluyong. including the Pasig River and Marikina River having numerous stops in Manila. Subic. with links to various cities and towns through passenger vessels. Iloilo. an integrated set of highway segments and ferry routes covering 17 cities was established in 2003. Makati. Cebu. The 919-kilometer (571 mi) Strong Republic Nautical Highway (SRNH).[363][364] . Pasig and Marikina.

64%.TOURISM The travel and tourism sector is a major contributor to the economy. South Korea.433.78% while the Americas accounted for 19.428 international visitors arrived from January to June 2014 up by 2.22% in the same period in 2013. contributing 7.2 percent of total employment.1% to the Philippine GDP in 2013 [385] and providing 1. . China.[386] 2.500 jobs or 3. and Japan accounted for 58.226.[387] The Department of Tourism has responsibility for the management and promotion of the tourism sector.28% and Europe 10.

500 islands. As an archipelago consisting of about 7. islands and diving spots among the most popular tourist destinations. caves and other rock formations. mountains. the Philippines has numerous beaches. rainforests.The country's rich biodiversity is one of the main tourist attractions with its beaches. Boracay has glaring white sand beaches and was named as the best island in the world by Travel + Leisure in .

Magellan's Cross in Cebu and the Tubbataha Reef in Visayas are other highlights.[389] . the Chocolate Hills in Bohol. the historic town of Vigan in Ilocos Sur.[388] The Banaue Rice Terraces in Ifugao. beaches and low cost of living. The Philippines is also one of the favorite retirement destinations for foreigners due to its warm climate all year round.2012.

[397] Since the liberalization of United States immigration laws in 1965.567. In 2007 there were an estimated[398][399] 12 million Filipinos living overseas.[400] .[396] Poverty Incidence significantly dropped to 21. the number of people in the United States having Filipinoancestry has grown substantially.[394][395] The population's median age is 22. The 3.21% population growth rate between 1995 and 2000 decreased to an estimated 1. a 45% growth in that time frame.DEMOGRAPHICS The population of the Philippines increased from 1990 to 2008 by approximately 28 million.7 years with 60. 75.685.03 years for females and 68.99 years for males.95% for the 2005–2010 period.94 years.2% in 2012.9% aged from 15 to 64 years old.[393] It is estimated that half of the population resides on the island of Luzon. but remains a contentious issue.[6] Life expectancy at birth is 71.[392]The first official census in the Philippines was carried out in 1877 and recorded a population of 5.6% in 2015 from 25.

553. Laguna.[403] Including suburbs in the adjacent provinces (Bulacan. comprising 13% of the national population.427. Cavite.According to the official count the population of the Philippines hit 100 million at the time of midnight on July 27. and Rizal) of Greater Manila. 2014.[405] In 2011 Manila . census data showed it had a population of 11. 2018. as of 2007. 31.[403][404] Metro Manila's gross regional product was estimated as of 2009 to be ₱468.190.081 by Dec. [402] CITIES Metro Manila is the most populous of the 3 defined metropolitan areas in the Philippines and the 11th most populous in the world.[401] The Philippine population will continue to increase throughout 2018 and is projected to reach around 107.4 billion (at constant 1985 prices) and accounts for 33% of the nation's GDP. based on projections made by the Commission on Population using the latest population census of 2015 (Philippine Statistics Authority). the population is around 21 million. making it the 12th country to reach this number.

9% Ilocano. 7. the Ibanag.3% as "others". and 25. 13. and the Ivatan.6% Visayans/Bisaya (excluding Cebuano. Hiligaynon and Waray).4% Waray. 3.ranked as the 28th wealthiest urban agglomeration in the world and the 2nd in Southeast Asia.5% Hiligaynon.[408] There are also indigenous . the Kapampangan. 6% Bikol.[6][407] which can be broken down further to yield more distinct non-tribal groups like the Moro.1% Cebuano.[406] ETHNIC GROUPS According to the 2000 census. the Pangasinense. 7. 28.1% of Filipinos are Tagalog.

[411] . the Bajau.[409] Filipinos generally belong to several Asian ethnic groups classified linguistically as part of the Austronesian or Malayo-Polynesian speaking people.[409] It is believed that thousands of years ago Austronesian-speaking Taiwanese aborigines migrated to the Philippines from Taiwan.peoples like the Igorot. eventually displacing the earlier Negrito groups of the islands. the Mangyan. such as the Aeta and the Ati.[410] Negritos. the Lumad. bringing with them knowledge of agriculture and ocean-sailing. are considered among the earliest inhabitants of the islands. and the tribes of Palawan.

China after 1898.[418] Recent genetic studies confirm this partial European[419][420] and Latin-American ancestry. and Japan. The descendants of mixed-race couples are known as mestizos.[422][423] .33% of the Philippine population). India. and Japanese people.[421] Other important non-indigenous minorities include Indians.[416] At least one-third of the population of Luzon. the Philippines is also home to migrants from places as diverse as China. although there are an estimated 27 percent of Filipinos who have partial Chinese ancestry. Spain. United States. Mexico. Two important non-indigenous minorities are the Chinese and the Spaniards. The Chinese.[412][413][414] stemming from precolonial and colonial Chinese migrants. have partial Hispanic ancestry (from varying points of origin and ranging from Latin America[417] to Spain).[415] Intermarriage between the groups is evident in the major cities and urban areas. South Korea. Britons. number 2 million. as well as old settlements in the Visayas and Zamboanga City at Mindanao (around 13.Being at the crossroads of the West and East. mostly descendants of immigrants from Fujian.

645 Other local languages/dialects 26. while 4 no longer have any known speakers.862 Not reported/not stated 0.[409] The only language not classified as an Austronesian language is Chavacano which is a creole language of Mexican-Spanish and is classified as a Romance language. Most native languages are part of the Philippine branch of the Malayo-Polynesian languages.97 % 3.01 % 6.44 % 22.773.660.77 % 8.097.LANGUAGES Population by mother tongue (2010) Language Speakers Tagalog 24.005 Other foreign languages/dialects 0.536 Hiligaynon 8.44 % 7.978 Ethnologue lists 186 individual languages in the Philippines.35 % 19.[424] .665.450 TOTAL 92.027. 182 of which are living languages.089 Cebuano 21.655 Waray 3.09 % 78.09 % 24. which is itself a branch of the Austronesian language family.453 Ilokano 8.074.512.

[13] Spanish. German. Chavacano. but is experiencing a revival due to government promotion.[429] The Department of Education began teaching the Malay languages of Indonesian and Malaysian in 2013.[425] However. Itbayat. Maranao. The Philippine constitution provides for the promotion of Spanish and Arabic on a voluntary and optional basis. print. Japanese. Mandarin is used in Chinese schools catering to the Chinese Filipino community. Malay. Ilocano. Spanish loanwords are still present today in many of the indigenous Philippine languages.[13] Filipino is a standardized version of Tagalog. Romblomanon . and several Visayan languages are prevalent in their respective provinces. Kinaray-a. although neither are used on as wide a scale as in the past.[426] Nineteen regional languages act as auxiliary official languages used as mediums of instruction: Aklanon. Cebuano. Hiligaynon. Waray. Ifugao. which was widely used as a lingua franca in the late nineteenth century. Korean. K apampangan. while Arabic is mainly used in Islamic schools in Mindanao. Kankanaey. Tagalog. Both Filipino and English are used in government. Sambal. education. broadcast media. In most towns. Cuyonon.[2] Other indigenous languages such as.[427] Languages not indigenous to the islands are also taught in select schools.[428] French. spoken mainly in Metro Manila and other urban regions. Tausug. Kamayo. Masbateño. has since declined greatly in use. and Spanish are taught with the help of foreign linguistic institutions. Islamic schools in Mindanao teach Modern Standard Arabic in their curriculum.[430] . Bikol.Filipino and English are the official languages of the country. Kalinga. and Yakan. Ivatan. and business. Maguindanao. Ibanag. Pangasinan. Surigaonon. the local indigenous language is spoken.

mostly endorsing evangelical Protestantdenominations that were introduced by American missionaries at the turn of the 19th and 20th centuries.[444][445][446][447] Most practice Sunni Islamunder the Shafi'i school. they are heavily concentrated in Northern Luzon and Southern Mindanao.58% of the population professed Catholicism.05% unanswered The Philippines is an officially secular state.[4] although a 2012 report by the National Commission on Muslim Filipinos estimates it at 11%.[4] Around 37% regularly attend Mass and 29% identify as very religious.[441][442] Islam is the second largest religion.[432][433] Protestants are 10. irreligious or   3.[448][449] .80% Muslim   5. The Muslim population of the Philippines was reported as 5.58% Protestant   10.[438][439][440] Iglesia ni Cristo is a notable Unitarian and Restorationist denomination in the country and are mostly concentrated at Central Luzon.8%[434][435] of the total population.57% of the total population according to census returns in 2010.[436][437] The Philippine Independent Church is a notable independent Catholic denomination.RELIGION Main article: Religion in the Philippines Religion in the Philippines (2010 census) religion percent Catholic   80.[431] Census data from 2010 found that about 80.57% Other. although Christianity is the dominant faith.[443] The majority of Muslims live in the Bangsamoro region.

[456] Health expenditure represented about 6. as of 2009. 480.[442][454] Buddhism is practiced by around 2% of the population. and is concentrated among Filipinos of Chinese descent.[442][448][454] The remaining population is divided between a number of religious groups.8% of GDP. of which 636 had developed acquired immune deficiency syndrome (AIDS).965 cases of human immunodeficiency virus (HIV) were reported in 2003.[453] An estimated 2% of the total population practice Philippine traditional religions.000 in 2005[461] to 17.[457]The budget allocation for Healthcare in 2010 was ₱28 billion (about USD597 million) or ₱310 ($7) per person[458] but had an increase in budget in 2014 with a record high in the collection of taxes from the House Bill 5727 (commonly known as Sin tax Bill). Per capita total expenditure at average exchange rate was USD52.[460] In 2001 there were about 1.700 hospitals.[455] HEALTH There are an increasing number of private health providers and.220 dentists.965 people who were under anti-retroviral . Cardiovascular diseases account for more than 25% of all deaths. In 2013.910 nurses.[450][451][452] Catholicism's historic dominance is steadily declining. whose practices and folk beliefs are often syncretized with Christianity and Islam. Despite the increase of HIV/AIDS cases from 12. total expenditures on the health sector was 3. and 1 hospital bed per every 769 people. 1.[457] Retention of skilled practitioners is a problem. of which about 40% were government-run and 60% private. including Hindus.1% of healthcare came from private expenditures while 32. The Philippines is the biggest supplier of nurses for export. 70% of nursing graduates go overseas to work.[459] There are an estimated 90. below the WHO target of 5%.1% of total government spending. 43.370 physicians or 1 per every 833 people. Jews. According to official estimates.An unknown number of Filipinos are irreligious. and Baha'is. but they may form as much as 20% of the population.450 as of April 2014 with 5.9% was from government. 67. with about 9% of adherents considering leaving their church.

The majority of colleges and universities follow a semester calendar from June to October and November to March.[464][465] Spending on education accounted for 16.2% for males and 88.1% for males and 96. with 95.[220] A 6-year elementary and 4-year high school education is mandatory[469] with an additional two years being added in 2013. The Philippines had a functional literacyrate of 86.[468]Classes start in June and end in March. with 84.7% for females in 2008.therapy.1% of the adult population estimated to be HIV-positive.[466][467] The Commission on Higher Education (CHED) lists 2.180 higher education institutions.6%. 607 of which are public and 1.1% for females.11% in the national budget proposed for 2015.45%.[470][471] .573 private.[463] EDUCATION The Philippines has a simple literacy rate of 95.[462] the country is still a low-HIV-prevalence country with less than 0. There are a number of foreign schools with study programs.

secondary. The Department of Education covers elementary. is the national university system of the Philippines.[474] . mainly in Muslim areas in Mindanao under the auspices and program of the Department of Education.Several government agencies are involved with education. and non-formal education.[468] The University of the Philippines. a system of eight (8) constituent universities. and are further classified as State Universities and Colleges (SUC) or Local Colleges and Universities (LCU). The Commission on Higher Education (CHED) supervises college and graduate academic programs and degrees as well as regulates standards in higher education.[472] In 2004. middle-level education training and development.[473] Public universities are all non-sectarian entities. madaris were mainstreamed in 16 regions nationwide. The Technical Education and Skills Development Authority (TESDA) administers post-secondary.

CULTURE

Philippine culture is a combination of Eastern and Western cultures. The Philippines
exhibits aspects found in other Asian countries with a Malay[475] heritage, yet its culture
also displays a significant number of Spanish and American influences. Traditional
festivities known as barrio fiestas (district festivals) to commemorate the feast days of
patron saints are common, these community celebrations are times for feasting, music,
and dancing. The Ati-Atihan, Moriones and Sinulog festivals are a couple of the most
well-known.

Some traditions, however, are changing or gradually being forgotten due to
modernization. The Bayanihan Philippine National Folk Dance Company has been
lauded for preserving many of the various traditional folk dances found throughout the
Philippines. They are famed for their iconic performances of Philippine dances such as
the tinikling and singkil that both feature clashing bamboo poles.[476]

One of the most visible Hispanic legacies is the prevalence of Spanish names and
surnames among Filipinos; a Spanish name and surname, however, does not
necessarily denote Spanish ancestry. This peculiarity, unique among the people of Asia,
came as a result of a colonial edict by Governor-General Narciso Clavería y Zaldua,
which ordered the systematic distribution of family names and implementation
of Hispanic nomenclature on the population.[477] The names of many streets, towns,
and provinces are also in Spanish.

The common use of the English language is an example of the American impact on
Philippine society. It has contributed to the ready acceptance and influence of American
pop cultural trends. This affinity is seen in Filipinos' love of fast food and American film
and music. Fast food outlets are found on many street corners. American global fast food
chain stalwarts have entered the market, but local fast food chains like Goldilocks and
most notably Jollibee, the leading fast food chain in the country, have emerged and
compete successfully against their foreign rivals.

Interdependence and Gains from Trade

CHAPTER 2

ELASTICITY

Demand for rice in the Philippines has strengthened over time and at present, accounts
for twenty percent of a typical Filipino household’s daily expenditure. This study
estimated the demand elasticities of rice that can be used to scientifically calculate and
quantify the actual level of rice demand in the Philippines. This was done by developing
an appropriate demand equation to calculate income and price elasticity parameters.
Other factors that influence demand for rice were also identified, and using the elasticity
parameters, the level of per capita rice demand and extent of commodity substitution
with changes of incomes and relative prices of commodities was validated. The
vulnerability and resilience of low income and rural groups to price and income shocks
was also determined.

The results of the of the study pointed to several policy implications which could be used
in developing strategic actions to achieve the country’s Rice Self-Sufficiency goal by
2013, where a key approach is the reduction of domestic rice demand. It was
recommended that a selective and targeted price intervention be implemented as a
short-run strategy because, accordingly, rice at subsidized prices must only be availed
primarily by the poorest of the poor and perhaps, must be more accessible in rural areas
and regions with very high poverty incidence. To complement this, the study also
recommended that income-generating interventions should be prioritized by the
government. Since most of the poor consumers come from rural areas, country-side
development should done to reduce poverty incidence in these areas through provision
of better jobs and income opportunities, and consequently to potentially reduce rice
consumption of rural consumers.

CONSUMER SURPLUS

"With the Quantitative Restriction (QR) on import of rice, expected to be abolished in July,
2017, in the Philippines, it is a need of the hour to work out an interim strategy to build
the capacity of domestic farmers and other actors to face international competition,"

would gain by PHP 6 billion. the model suggested that rice imports in 2013 would have been 3. Importers. 2014. Dr. In such a scenario.702 tons. the average retail price of rice at PHP 33. have received limited investment.18 per kilogram. the model suggests that retail prices would fall by PHP 2.8 billion tons higher than the actual 404. .8/ kg. Furthermore. Senior Fellow. To summarise. Dr Briones explained that pursuing a free trade regime in the rice sector will lead to an aggregate benefit of over USD 3 billion. in the second situation with relaxed import quota. On the aggregate the economy would benefit by PHP 25 billion. while producer (farmer) surplus would fall by P6. Briones simulated two scenarios in the rice sector: first. Philippines Institute for Development Studies in the third National Reference Group meeting held under the CREW project in Manila. The objective of the meeting was to discuss the key findings of the Philippines Diagnostic Country Report (DCR) and crystallise a national advocacy plan. the consumer surplus will rise by PHP 178 billion. on the other hand. they are unprepared for liberalisation. However.6 billion decline in the producer surplus and the importer’s revenue respectively. as the farmers have been protected from international competition and at the same time. For the free trade scenario. Roehlano Briones.claimed Dr. Further. a model for economic surplus analysis. where imports were allowed to reach 1 million tons against the actual 404. Using the Total Welfare Impact Simulator for Trade (TWIST).702 tons in 2013.7 billion. Whereas. along with the farmers.6 billion. free trade scenario and second. more than offsetting the PHP 34 billion and PHP 5. resulting in a consumer surplus of PHP 138 billion (or over USD 3 billion).70/kg would drop to equal the border price of PHP 19. Philippines on 30 October. with the import quota. Consumer surplus would go up by PHP 25.

confirmed the idea and mentioned that the same could also include the element of scheduled franchise licenses. in the case of bus transport sector. The agglomeration could have a monopoly in their zones where they would follow the policy of self-policing. It was decided that in the rice sector. Dr. with the expected opening up of the import market it is essential that the same be done with safety nets to ensure protection of farmers and other stakeholders. and researcher for the bus transport sector explained that the loss due to traffic congestion faced in the Philippines is about PHP 5. The sector has suffered a failure in terms of policy implementation and the high number of operators and buses have made it more difficult to discipline the sector. on the other hand. Domingo suggested revisiting the Martial Law where the bus operators were clubbed into agglomeration in order to make them accountable and easy to regulate.8 billion in six years. a competitiveness package would be chalked out to prepare the rice chain for international market and the role of National Food Authority which holds the import monopoly would be revisited.the millers and other members of the rice value chain are also expected to face losses. the same will result to a net present value of PHP 13. Neha ." stated Mr. where the licenses would carry the schedule. The meeting concluded with strong take aways in terms of the advocacy. Sonny Domingo. rather harmful competition in an arterial patch in Metro Manila.5 billion per year. Hence. "It is crucial to cut vehicular flow of traffic through traffic management and accomplish infrastructure and competition reforms in the bus transport sector. IDEALS. if an effective decongestion policy is brought in place. Tony Salvador. referred to as EDSA (Epifanio de los Santos Avenue). Domingo. PIDS. the bone of contention was cut throat competition. station and timings for the buses.3 billion in three years and PHP 19. it was decided that the probable application of Marshall Law (1970s) and ways to cut down the number of buses and effective implementation decongestion rules will be looked. Furthermore. While. Dr. This calls for an interim strategy that should be the focus of the Philippines government especially since the QR is likely to not be renewed. In the bus transport sector.

There is a view that the office can evolve into the Competition Authority.” NRG members agreed that the way to move forward is to create a government body for competition in the Philippines. “the emerging consensus is that the Competition Authority will regulate the exercise of market power. PRODUCER SUPLUS THE Philippines needs to work on the global competitiveness of the country’s agricultural sector by opening up the rice sector to free trade with enough safety net. The meeting discussed the key findings of the Philippines Diagnostic Country Report.” Prof.Tomar.” PIDS Senior Fellow Roehlano Briones said during the Third National Reference Group meeting in Manila. Senior Research Fellow of PIDS. Action for Economic Reforms said. we are trying to translate cut throat competition regulated competition. “That is the rising consensus. but there is also a view that this might be risky.” She added that the authority “will look into possible abuses by existing monopolies or existing dominant players in the different industries. the government think tank said. The Philippine Institute for Development Studies (PIDS) said in a statement on Thursday doing so would prepare the sector for the eventual expiration of the quantitative restriction (QR). Sta. Ana. Dr. Adoracion Navarro. expected to be abolished in July 2017. it is a need of the hour to work out an interim strategy to build the capacity of domestic farmers and other actors to face international competition.” “The possible role of the Department of Justice – Office on Competition is still being reviewed. in the other sector. It . “With the QR on import of rice. added that in a congressional hearing to consolidate legislative proposals and bills on competition policies in Congress she attended. in the Philippines. CUTS International remarked that the case of the Philippines was interesting as while in one sector we are strategically trying to instil healthy competition.

according to this model. consumer surplus would climb by P25. a model for economic surplus analysis. imports were relaxed and allowed to reach 1 million tons against the actual 404. With this scenario.70 per kilogram would drop to equal the border price of P19. along with the farmers. however. they are unprepared for liberalization. Importers. according to a PIDS statement. The model suggests that “retail prices would fall by P2. or over $3 billion.702 tons in 2013. The PIDS study said consumer surplus will rise by P178 billion. Using free trade scenario and import quota scenario. while producer or farmer surplus would fall by P6. resulting in a consumer surplus of P138 billion.18 per kilogram.702 tons.80 per kilogram. the millers and other members of the rice value chain are also expected to face losses.came up with a national advocacy plan. more than offsetting the P34 billion and P5. would benefit by P25 billion. Briones explained “that pursuing a free-trade regime in the rice sector will lead to an aggregate benefit of over $3 billion. The economy as a whole. “Further.” Briones said citing a PIDS study. especially since . With the expected opening up of the import market. would gain by P6 billion.6 billion decline in the producer surplus and the importer’s revenue respectively. which “calls for an interim strategy that should be the focus of the Philippines government.7 billion. In such a scenario. which used the Total Welfare Impact Simulator for Trade.6 billion.” As the farmers have been mainly shielded from the necessary global competition in order to grow and “received limited investment.” the study said. Using the import quota scenario. the average retail price of rice at P33. Briones said pursuing a free trade regime on rice sector will be the way forward for the country. the PIDS noted the importance of safety nets to ensure protection of farmers and other stakeholders. The free trade scenario model suggest that “rice imports in 2013 would have been 3.” the statement said.8 billion tons higher than the actual 404.

” TAXES Individuals earning compensation income are taxed based only on the income tax schedule for individuals. or just with a flat tax rate of 8% on their gross sales (or gross receipts plus other non-operating income). which holds the import monopoly.000 0% P250. they have the option to be taxed either on the basis of the income tax schedule for individuals and the applicable percentage taxes. Income tax schedule for individuals effective FY 2018 until FY 2022[3] Annual taxable income Tax to pay But not Over over P0 P250. On the other hand.000 P400. if their gross sales (or gross receipts plus other non-operating income) does not exceed the VAT threshold. However. and value-added tax (VAT).000 P30. concluded that in the rice sector. the PIDS said. self-employed individuals and professionals are taxed based on the income tax schedule for individuals.” The meeting. would be revisited.the QR is likely to not be renewed. “a competitiveness package would be chalked out to prepare the rice chain for international market and the role of National Food Authority.000 20% of the excess over P250. applicable percentage taxes.000 + 25% of the excess over P400.000 P400.000 .000 P800.

000 P130.000 P2.000. 12%.P800.000. Capital gains from the sale of real property are taxed at the rate of 6%.000 + 30% of the excess over P800. except on books.410. 5%. . prizes and other winnings Interest income from bank deposits. royalties. less than five years.000. is taxed at the rate of 20%.000 P2. less than four years. Prizes and winnings from Philippine Charity Sweepstakes Office (PCSO) Lotto in excess of P10. when pre-terminated in less than three years after making such deposit or investment.000 P490. are taxed at the rate of 10%. deposit substitutes. Capital gains Capital gains from the sale of shares of stock not traded in stock exchange are taxed at the rate of 15%.000 or below are taxed on the basis of the income tax schedule for individuals) are taxed at the rate of 20%.000 P8.000 (upon which individual prizes and winnings P10.000 Interests.000 P2. literary works and musical compositions. except when such proceeds would be used to construct a new property within eighteen months after the sale had occurred. Income from long-term deposits and investments.000 + 35% of the excess over P8.000.000 + 32% of the excess over P2. Interest income from a depository bank under the expanded foreign currency deposit system is taxed at the rate of 15%. Dividends Cash and property dividends are taxed at the rate of 10%. trust funds.000.000.000 P8. Royalties. and other similar products (except for its long-term variants) is taxed at the rate of 20%. and.

. Value-added tax The value-added tax (VAT) rate since 2006 is 12%.919. Excise taxes Excise taxes apply to goods manufactured or produced in the Philippines for domestic sales or consumption or for any other disposition and to things imported. and. as amended.Income tax for corporations The income tax rate for corporations is 30%. properties or services in the course of trade or business and are exempt from value-added tax (VAT) under Section 109 (w) of the National Internal Revenue Code. whose gross annual sales and/or receipts do not exceed Php 1.  engaged in businesses specified in Title V of the National Internal Revenue Code.500 and who are not VAT-registered. Percentage tax Percentage tax is a business tax imposed on persons or entities/transactions:  who sell or lease goods.

rice at subsidized prices must only be availed primarily by the poorest of the poor and perhaps. As a student who is lucky to be given all the necessities needed in life it would be normal not to think of this because we normally do not notice it. To complement this. This study estimated the demand elasticities of rice that can be used to scientifically calculate and quantify the actual level of rice demand in the Philippines. and consequently to potentially reduce rice consumption of rural consumers. The vulnerability and resilience of low income and rural groups to price and income shocks was also determined. there are 55 people who die in the Philippines every day because of the lack of clean water. As one can see clean water is greatly needed by all people. the level of per capita rice demand and extent of commodity substitution with changes of incomes and relative prices of commodities was validated. the study also recommended that income-generating interventions should be prioritized by the government. It was recommended that a selective and targeted price intervention be implemented as a short-run strategy because. This was done by developing an appropriate demand equation to calculate income and price elasticity parameters. The results of the of the study pointed to several policy implications which could be used in developing strategic actions to achieve the country’s Rice Self-Sufficiency goal by 2013. where a key approach is the reduction of domestic rice demand. . Elasticity and its Application Chapter 3 Philippines Demand for rice in the Philippines has strengthened over time and at present. must be more accessible in rural areas and regions with very high poverty incidence. accordingly. country-side development should done to reduce poverty incidence in these areas through provision of better jobs and income opportunities. According to an article created by Vice News. Since most of the poor consumers come from rural areas. Other factors that influence demand for rice were also identified. accounts for twenty percent of a typical Filipino household’s daily expenditure. and using the elasticity parameters.

the government loses more than $1. Aside from the known factors that cause the decreasing amount of clean water such as El Nino and climate change. according to the PIS by 2050 the population of the areas with poverty in Manila will reach over 9 million! With the rising population of the Philippines there will be a problem with the economy of clean water because there will be too much demand for the supply of water. we need to. The reason why the amount of bodies of water with good quality water which can be used for sanitary or drinking purposes is pollution.However. An example of this was that out of 127 freshwater bodies only 47% had good water quality.3 billion dollars a year since it includes various expenses like tourism losses (worse ecosystem) and healthcare. quantity demanded is the amount of good that . in the article it stated that 50 out of 421 rivers in the Philippines are considered dead and this number continues to rise every few years. The problem with this is that despite the water being low quality or dirty those who cannot afford high quality water still buy it because the price of clean water goes higher as the supply of it goes down. According to Katrina Arianne Ebora. Some companies are said to have thrown their waste directly into the bodies of water. As I learned in class. Nowadays that the economy of the Philippines is booming and all the different infrastructures being built and more companies are increasing their supply it affects the water because of how they dump the trash.com which stated facts about the decreasing water supply in the Philippines. understand its demand and supply as well as the elasticity of clean water. Due to this there is an infinite demand for water since it is a necessity and we cannot live long without it. Due to this. It is understood that everyone in the world needs water to survive. who works for UNICEF’s Water. Also. This in turn decreases the supply that they can provide for the infinite demand of the people. Sanitation and Hygiene program in the Philippines stated that “Over 30 million people in the Philippines do not have access to improved sanitation facilities. To explain the effects of the water shortage around the Philippines we must look at its causes. According to an article from philstar. there is another factor that is not really talked about.” Also. The way that this affects the suppliers for fresh water is that they are running out of places to get resources from.

It also provides a rationale for subsidizing housing for the poor. For example. the ratio of unit housing cost to . This is attributed to several factors: first. This finding reflects the need to raise income levels of households such that significant changes in tenure or housing conditions may be undertaken specifically by poor households. We determined different factors to see if a product is elastic or not. if the prices of water rise. in this case of a shortage the factor is the price. When a product is deemed to be inelastic it is when the demand for a product does not change that much when the price is either raised or lowered. in this case it is water. holding other things equal. Estimates of income elasticity among different household types show that inelastic demand is common among poor households rather than non-poor households. Housing affordability is low in the country. the demand for housing by non-poor households is more responsive to a change in income (Table 9). a lot of people will still buy it despite the raising of the price. Housing demand in the Philippines has been mainly dictated by housing affordability. We also learned that there is a Law of Demand which states “Ceteris paribus. On the other hand. since there is an increase in price the amount of consumers that can pay for clean water goes down. there is a very slight change of quantity demanded when the price of the product increases. However. In class we learned that the Price Elasticity of Demand is how much a good responds to a change in price of that certain good. Since there is a shortage a supplier needs to sell the product (clean water) for a higher price in order to supply more for the demand. which refers not only to a household’s ability to pay but also the price of housing in the market and the financing schemes available. When a product's demand is elastic it means that the quantity demanded changes a lot to a raising or lowering of price.consumers are able to and wanting to purchase. There are many different factors which can affect the demand of water however. and if the price goes down the quantity demanded increases”. Poor households are more likely to spend an increase in income on other household needs other than housing. when the Price of a product rises the quantity demanded goes down. When you say a product is inelastic. in this case a factor that water has which makes it inelastic is that it is a necessity.

This being the case. the only recourse of households is informal arrangements since the rental housing market has not been developed. . There is also an apparent need to come up with innovative financing schemes (e. housing demand is inelastic since the income received by most households is barely sufficient to satisfy basic needs (e. education). However. Second. Third. The situation can be worst in some areas. economic improvements may bring about the needed boost in income for urban households to obtain access to the formal housing market. government has to institute ways to effectively reduce the high cost of housing in the country.income is very high. alternative forms of housing for urban households have to be considered. incremental housing schemes) that could provide low monthly amortization. which further makes housing less affordable. An increase in income will not necessarily be spent on housing but on other household needs. The rental housing market may provide a potential housing alternative for the low-income families given the increasing cost of homeownership in urban areas particularly in highly urbanized cities. innovative housing finance is limited. there is lack of low-cost alternative housing in the formal market. Fourth. in the short-run.g.g. The above conditions are reflected in the consumption pattern of households. micro financing. there has to be a significant increase in household incomes to bring about a significant change in the dwelling conditions of households. The path toward acceptable housing has been very slow and housing adjustments have been confined to home improvements with small changes on tenure. In the long-run. food. Estimates of household demand functions show that expenditures on housing are not highly responsive to income increases. Next to homeownership. Moreover. clothing. This leaves a significant number of households unable to obtain decent housing since homeownership (without subsidy) is only affordable to about 50% of households in the Philippines.

Over the past three decades. contributing 35 % of the population's total calorie intake on average. the macroeconomic environment. The purpose of this is to analyze the changes in the Philippine rice economy during the past three and a half decades.to stabilize prices. Rice also remains to be the main food staple. raise farm incomes. Government interventions have been aimed to achieve several. Demand and Government Policies Chapter 3 Philippines Rice continues to be the most important commodity in the Philippines. 37 days for crude oil and products in country stocks and 14 days in-transit.742 thousand barrels (MB) or 51-day supply equivalent. Likewise. Rice constitutes about 11% of total household expenditure. and double that ratio among the poor households. often conflicting. and as much as 60-65 % of the households in the lowest income quartile. changes in the world rice and fertilizer markets and technological developments through public and private international research have had equally important impacts on the performance of the Philippine rice economy and in shaping the nature of government interventions. This was higher by 15. the rice sector has historically been the central focus of government agricultural policy. Supply. and the political economy forces. accounting for about 15% of gross value added in agriculture. provide low prices to consumers. Because of the political and economic importance of rice in the Country. objectives -. It is grown on nearly two-thirds of the country's arable land and is a major source of livelihood of many small farmers and agricultural landless households.2 percent from FY 2015 . however. the level and nature of these government interventions and the relative importance of policy objectives have changed in response to changes in the domestic rice demand and supply factors. and attain rice self-sufficiency in pursuit of food security. December 2016 actual crudes and petroleum products inventory closed at 20. as well as to evaluate the policy options in light of the prospective rice supply and demand situation over the :next decade and beyond.

Volume wise. the top supplier of crude oil into the country.9 percent from 2015’s 76. FY December 2016 average inventory was recorded at 47 days. The other industry players accounted for majority of the product imports with 73.5 percent of the total imports volume.276 MB.6 percent share of the total crude mix. 6.772 MB. LPG and gasoline imports also rose by 19. up by 8. As such.005 MB. respectively.7 percent (5.g. earthquake.3 percent was sourced from the ASEAN (4.537 MB) was sourced from the Middle East.9 percent to 63. 1). diesel oil import grew by 24. an increase of 12.3 percent. Next is Kuwait with a 33.9.438 MB) came from Saudi Arabia. 19.7 and 3.132 . followed by UAE with a 13.256 MB) of crude oil was imported from Russia. Current MIR for refiners is in-country stocks equivalent to 30 days while an equivalent of 15 days stock is required for the bulk marketers and 7 days for the LPG players.3 percent share.level of 18. updates on the status of oil supply on areas heavily affected by typhoons were provided to the National Disaster Risk Reduction and Management Council (NDRRMC) to ensure continuous supply.319 MB from 2015’s 58. fuel oil import dropped by 15.6 percent compared with 2015 import. The remaining 6.060 MB. 38 days in country stock and 9 days in-transit. Kerosene/avturbo. FY 2016 petroleum product imports totaled 86. On the other hand.108 MB. etc. On the other hand.9 percent from 2015’s 78.7 percent. a slight increase of 0. flood. typhoon. The country imported various types of crude oil in 2016 which reached 78.1 percent (28. of which 36.).980 MB) and from local production (135 MB) (Fig. The government continued to enforce the Minimum Inventory Requirement (MIR) given the continuing risks faced by the downstream oil industry sector such as geopolitical instability and supply delivery problems to areas affected by calamities (e. Eighty-seven percent of the total crude mix (68.

9367 of 2006 mandated that all gasoline to be sold in the country should be E-10 (gasoline with 10% bioethanol content). The oil majors (Petron.904 MB of 2015. Meanwhile.3 percent from 1.478 MB of 2015 to 79. Total product import was 55.4 percent of the total products demand. Product import mix comprised mostly of diesel oil at 41. Moreover.144 MB to 22.0 percent.2 percent.5 percent was attributed to direct importers.MB.6 percent of LPG demand.7 percent from last year’s 74. LPG import on the other hand. petroleum coke for smelting plants (400 MT) was also imported during the year as well as butane in canisters (208 MT).789 MB.3. Total gasoline import reached 43. Refinery utilization during the period also increased by 1. kerosene/avturbo at 8.0 percent from 77. which included blending stocks.7 percent this year. Republic Act No. was 68.2 percent and other products at 10.632 MB ethanol was imported for fuel use during the year which dropped by 14.0 percent of the total product imports. .016 MB. as against 84. The country’s current maximum working crude distillation capacity is 285 thousand barrels per stream day (MBSD).0 percent share by direct importers. As for the refiners.5 percent of gasoline demand while diesel oil import was 54. LPG at 13. their import share in the total demand was 8. a total of 1. Total crude processed as of end year 2016 was up by 2. Chevron and Pilipinas Shell) accounted for the remaining 26.6 percent from last year’s 18.5 percent which increased by 25.5 percent of diesel demand.7 percent while the other players’ import share was at 40. fuel oil at 8.7 percent share in the total product mix.9 percent. The oil majors’ import share in the total demand was 14.4 percent to 75.5 percent.7 percent. while 46. The local refiners (Petron and Pilipinas Shell) accounted for 16. gasoline at 18.

Consequently. some 10 million families will be helped to cope with TRAIN-triggered increases in the prices of basic goods.1 percent from 75. .1 and 0.4 MB per day. Under the new law. LTFRB had been swamped with petitions for fare increases by public transport companies.2 percent. Even middle class families who will benefit from TRAIN through lower withholding tax on salaries will first feel the pain of higher commodity prices. Proponents of the tax reform law kept on reassuring the public that the poor would be protected from potential inflationary effects of increased levies on some basic commodities through a specially designed safety net. Similarly.5 million households who are not listed in the government’s Conditional Cash Transfer program and who are supposed to get P200 per month to help them bear the impact of new taxes on the cost of living. Kerosene/ avturbo output also rose by 10.5 million new families so they can be enrolled in the TRAIN rebate scheme. LPG and diesel oil also rose by 1.6 percent. Prices of almost everything people buy in the wet markets had gone up from vegetables.4 percent.751 MB to 78. gasoline output posted an increase of 10.5 million presently enrolled CCT families whose monthly stipends will also be increased by P200. the DSWD.8 percent which may be attributed to the expanded refinery of one local refiner. Senator Ralph Recto recently pointed out that the implementing agency for this safety net. does not have the manpower to effectively process 5. fish and meat. local petroleum refinery production output also grew by 3. I found this out the week I returned from the US and had to do the grocery because my wife was still abroad. respectively. And food prices have really gone up. now capable of producing more white petroleum products. Vis-à-vis FY 2015.113 MB. That’s on top of the 4. However. Additionally. fuel oil output dropped by 18. This is the 5. FY 2016 average refining output was at 213.

if the current level of economic growth can be sustained. with a considerable income gap between it and richer ASEAN countries such as Thailand and Malaysia. Major consumer items being exported to the Philippines include clothing. Producers and the Efficiency of markets Chapter 4 Philippines An archipelago state which is home to more than 100 million people. Consumers. sporting goods and footwear.8% and this momentum is expected to continue. toys. games. the Philippines is on track to become an upper-middle income country by 2022. Hong Kong’s exports of consumer goods to the Philippines have grown steadily at a compound annual growth rate (CAGR) of 5%. overseas Filipino workers remitted a total of US$27 billion back to the country. the Philippines is gradually transforming into a burgeoning modern consumer market. Consumption Power Fuelled by Robust Economic Growth In 2016. In 2016. However. the Philippines recorded an impressive economic growth rate of 6. the Philippines remains a lower middle income country at present. The chief factors fuelling the country’s current consumption power are foreign receipts from overseas remittance and business processing outsourcing (BPO) services. By the World Bank’s definition. The . Over the past six years.

It is estimated that Philippine BPO receipts amounted to US$25 billion in 2016[2]. and has become the country’s largest source of private-sector employment. Anchored by strong economic growth. translating into an impressive CAGR of 11%.[3] . The industry is driving income growth. Overseas receipts from remittances and BPO have driven local consumption and property investment in the Philippines. as BPO jobs are among the highest-paying jobs at all levels. However.remittance figure is much higher than the record US$7. as key reliable economic factors galvanised the country in spite of uncertainties caused by the change of president. Bangko Sentral ng Pilipinas (BSP) for the same year. generating a sturdy cycle of growth.9 billion.9 billion in actual foreign direct investment (FDI) recorded by the Central Bank. the net FDI inflow in 2016 increased by some 40% from 2015 levels. The fast-growing BPO sector is another important source of foreign exchange for the Philippines. Final consumption expenditure of the Philippines almost tripled in the decade up to 2015 to a level of around US$247. consumer confidence with the Philippines is now at a 10-year high and it topped world rankings in 2016.

400 sq m in the first quarter of 2017 to 7. Meanwhile. in order to shop for groceries and personal care products. modern retail in the Philippines is expanding rapidly. Sari-sari stores offer low prices and a greater degree of convenience to consumers. mainly in the form of sari-sari stores (small neighbourhood stores). showcasing a CAGR of 3.100 sq m in the first quarter of 2018[4]. from 6. Driven by strong economic growth and increasing purchasing power. it fuels consumer spending. Modern Retail Landscape Generally speaking.The Philippines also boasts a very youthful population with a median age of around 23 years old.2% during the period 2016 to 2020. . Also. This skews even younger than other populous ASEAN counterparts such as Indonesia and Vietnam. It is projected that by 2020 the total retail value of the country will increase by US$20 billion to around US$94 billion.483. Such a demographic signals a strong vibrancy within the labour market which is capable of sustaining economic growth. Young people usually operate on a low saving ratio and have a higher tendency to buy discretionary items. the total gross leasable area for retail is predicted to increase by 8% year-on-year.074. Filipino consumers still make use of the informal sector.

It is also worth noting that Filipino-Chinese citizens are influential in the retail sector. It is not uncommon to find chapels in large shopping malls. They regard visiting shopping malls as a weekend leisure activity which involves family and friends. alongside shops and restaurants. SM Supermalls. For example. Very often these giants operate subsidiary supermarkets or department stores inside their malls. The retail landscape of the Philippines is already rather competitive. the SM Groupand the up-and-coming DoubleDragon Properties are Filipino-Chinese owned. Major international fashion retail brands such . Robinson Malls and the CityMalls. more than 80% of Filipinos are Catholic.Filipino urban dwellers usually visit large shopping malls in city centres for big ticket items and quality products. Both local and foreign retailers are eyeing this burgeoning market and have been utilising various marketing and promotional initiatives. Additionally. They also form partnerships with foreign retail brands to introduce international brands into the malls. Shopping malls in the Philippines have mostly been developed by local conglomerates such as the Ayala Malls.

000 capital investment per store. foreigners continue to face a somewhat restrictive investment situation when looking to enter the retail market of the Philippines. fashion. Japanese investment has taken place in a wide range of retail sectors including convenience stores. Under these restrictions. H&M and Mango have already gained a foothold within the country. or retail trade in high-end or luxury products with no less than US$250. home & lifestyle.5 million.as Zara. Full foreign ownership in retail trade is only permitted for investment levels above US$2. retail FDI only accounts for less than 1% of the Philippines’s total FDI. High-end shopping mall featuring foreign brands in Manila. Uniqlo and Forever 21 have entered the Philippine market by forming . The majority of foreign retailers with stand-alone stores such as H&M. Department store inside a community shopping mall. Furthermore. Aside from business opportunities. No foreign ownership for retail trade is allowed for investment below this level.

40% of the population are concentrated in Central Luzon and Calabarzon (the part of Luzon Island south of Metro Manila). as President Duterte is taking a strong hand in tackling corruption and inefficient bureaucracy. which are the most developed parts of the Philippines. For recent developments under the Duterte Government. These households can afford to spend more on discretionary items such as electronic tablets. the NCR. Urbanisation Shaping Consumer Lifestyle Urbanisation is an important factor in driving modern retail growth and influencing consumer lifestyle within the Philippines. including those from Hong Kong. it is the households which fall within these three regions that have the highest purchasing power in the country. could work with local retail operators to supply their supermarkets and department stores. see The Philippines: The Prospect for Manufacturing Relocation. Unsurprisingly. Calabarzon and Central Luzon contribute to over half of the Philippines’ family expenditure. the population spread of the Philippines is highly uneven across the country. As shown in the table below. The investment environment in the Philippines is now undergoing changes for the better. corruptive practices and the Manila hostage issue (now resolved). Smaller brands and SMEs. Metro Manila (also known as National Capital Region.partnership with local businesses. The visibility profile of the Philippine market has been low among Hong Kong businesses due to a number of specific concerns. Booming business activities in the metro or urban areas also nurture an expanding middle class with strong consumer demand. the NCR) alone accounts for 14% of the population of the country. fashion and lifestyle goods and dining out. These include the preponderance of bureaucratic ‘red tape’. along with the tension between China and the Philippines over the South China Sea. Besides. As an archipelago state. .

modern retail is booming in the form of large shopping malls housing foreign brands. Many workers in 24-hour operations such as BPO centres often visit convenience stores to shop for snacks. consumers have attained a certain level of sophistication and specialised stores selling high-end consumer goods are also available. clear evidence of the keen degree of competition. Korea and other ASEAN countries. which can be seen everywhere in Metro Manila. daily necessities and fast food items. On the other hand. are gradually replacing sari-sari stores. . Convenience stores. supermarkets and food and beverage outlets.In these urban areas. Consumers can easily find imports from Japan.

detergents and deodorants is growing fast in these areas. In the provinces. but they are being gradually replaced by community shopping malls and supermarkets. BPO centres have also started expanding to second-tier cities outside of Metro Manila. Cagayan and the Davao region. sari-sari stores still dominate for the time being. spending power and urbanisation is spreading out across the provinces. While the more developed parts of the Philippines have a growing middle class to support modern consumer lifestyles. With improved incomes. Foreign fashion brands can be found in big shopping malls. more than half of the people in the Philippines still live outside of metro areas (generally referred to as ‘provinces’). Consumption of basic fast-moving consumer goods (FMCG) such as shampoo. soap. Supported by strong economic growth.High-end supermarket selling imports from the UK. notably in Visayas (where Cebu is located). families are able to .

Young.afford consumer durables such as fridges. According to the UNCTAD B2C E-commerce Index 2016(compiled to assess criteria such as internet-use penetration. Logistics Provision Upgrade Needed for E-tail to Thrive Given the country’s young demographic. about 41% of the Philippine population were internet users. As of 2015. the internet retail landscape of the Philippines remains challenging. trailing Vietnam (75th) and scoring only slightly higher than Indonesia. credit card penetration and postal reliability). the Philippines scored low in credit card penetration and postal reliability. However. Filipino social media users top the world by spending an average of 4. mobile platforms can be vital in reaching young Filipino consumers.3 hours on social media every day[5]. these products have yet to fully penetrate every household in the provinces. online retail in the Philippines has enormous potential. As such. though. In particular. currently accounting for only 1% of the retail sales total. E-tailing still Challenging In spite of strong potential demand. washing machines and air conditioning units. the Philippines ranked low at 89 out of 137 economies. secure server per one million inhabitants. . tech-savvy internet users are strongly influenced by trends in social media and often rely on reviews from social media when making consumer decisions.

The logistics industry in the Philippines is in dire need of upgrading its warehouse management and delivery management capacity. if not impossible. The logistics infrastructure of the Philippines is expected to gradually improve in the near future. as President Duterte has already set out top-priority initiatives to expand infrastructure provision. such as the lack of secure payment facilities and low credit card ownership. the situation is gradually improving as alternative payment methods such as ATM transfer. payment at convenience stores and cash on-delivery are being developed for e-tailing. but also make it difficult for sellers to operate with a profit. The Philippines is ranked 71 in World Bank’s Logistics Performance Index. lowest among the ASEAN-5 countries[6]. The more successful e-tailers in the Philippines such as Lazada and Zalora often engage in strategic partnership with store-based retailers in order to enhance the shopping experience.Practical factors. some e-tailers are dealing with the logistics challenges by using the ‘clicks-and-mortar’ model (whereby customers order goods online and pick them up in-store). However. Substandard logistics not only deter consumers from shopping online. At present. Last-mile handling. logistics infrastructure is generally poor. Outside urban area. Nevertheless. remain major obstacles in accelerating e-commerce development in the Philippines. is a major issue for e-tailers in the Philippines. e-tailing offers a comparatively low-cost option for SME owners wishing to sell their products in the Philippines. for now e-tailing development is heavily hindered by poor logistics performance. the e-tailing landscape will remain challenging until there is a significant upgrade in logistics provision. The challenging e-tailing landscape notwithstanding. in particular with last-mile delivery. Hong Kong businesses can . Nevertheless. The Philippines scored especially badly in logistics infrastructure quality and efficiency of customs clearance. making delivery times long and ultimately unreliable. then. Traffic congestion in Metro Manila is so notorious that timely delivery is difficult.

5B).81k. Wood Carpentry ($2. 1 of 1998.3B and imported $80.O. and roasted coffee beans (40 percent).93B).78B). turkey livers. In 2016. The top exports of the Philippines are Integrated Circuits ($13. Refined Petroleum ($3. Administrative Order (A. 8 of 1997 and A.25B). sugar and coffee. frozen or chilled (40 percent). Determinants of Trade. as amended by A. and have not changed since 2005. frozen or chilled (40 percent). i.2 percent.3B. The Philippines maintains a two-tiered tariff policy for sensitive agricultural products including rice.56B). a few TRQ products have achieved unified in-quota and out-of-quota tariff rates.91B).) 9 of 1996. the Philippines exported $54. using the 1992 revision of the HS (Harmonized System) classification.5 percent and 41. Cars ($3. Office Machine Parts($3.6B). . established rules for implementing TRQs and allocating import licenses.33B) and Insulated Wire ($2. These products are subject to a tariff rate quota (TRQ) and all imports outside of the minimum access volume are taxed at a higher out-of-quota rate. Computers ($4. Currently. including: chicken. which effectively doubles the rate of out-of-quota tariff protection. fresh and chilled (40 percent).98 percent in 2014.06B) and Crude Petroleum ($2. In-quota and out-of-quota tariff rates averaged 36.5B. International Trade Chapter 5 Philippines Is the 41st largest export economy in the world. Semiconductor Devices ($2.47B). there is an additional special safeguard duty in place for chicken meat.85 percent in 2006 to 11. At present. Agriculture Tariffs and Quotas The average tariffs on agricultural products increased from 11. corn. Its top imports are Integrate Circuits ($9. potatoes. respectively. resulting in a negative trade balance of $26.O. chicken meat. In 2016 the GDP of the Philippines was $304B and its GDP per capita was $7.O. pork.

according to the following schedule: 1. Republic Act No. The new excise tax levied on most premium beers (with a net retail price of 50 pesos or US$1. 2013 and significantly changed the rate of excise tax charged on distilled spirits. and  A specific tax of twenty pesos (P20. which found the Philippine application of excise tax on distilled spirits to be discriminatory against imported products.00) per proof liter. 10351. ii. Under the new law. and will likewise have a minimal effect on exports of U.” also called the "2012 Sin Tax Reform. Effective on January 1." took effect on January 1. craft beers. iii. the tax on most sparkling wines (with a net retail price of over 500 pesos or $12) dramatically increased from 413 pesos (US$10) to 700 pesos (US$17) per 750ml. regardless of the raw material used. wines and fermented liquor (see below). Wines and Fermented Liquor Under the reformed law (see above).23 per liter of volume capacity) increased by a mere two percent. Excise Taxes on Alcohol Products The Philippines raised excise taxes on alcohol and tobacco products in 2005. iv. extending preferential treatment for distilled spirits produced from indigenous raw materials and imposing significantly higher excise taxes on spirits made from non-indigenous raw materials. “An Act Restructuring the Excise Tax on Alcohol and Tobacco.S. 2013:  An ad valorem (“according to value”) tax equivalent to 15 percent of the net retail price (excluding excise tax and value-added tax) per proof liter. . the excise tax on imported and domestically produced distilled spirits. while the tax on most still wines (containing 14 percent alcohol per volume or less) increased slightly from 22 pesos (US$0.53) to 30 pesos (US$0. Distilled Spirits The 2012 Sin Tax Reform was drafted in response to a 2011 World Trade Organization ruling.73) per liter. will be based on a uniform ad valorem tax (depending on the net retail price) and a specific tax.

Import Regulations for Processed Food Products Philippine food regulations generally follow the U. 3. sugar. coffee. and coffee extract. and coffee. Food and Drug Administration policies and guidelines for food additives. fish. live animals. poultry meat. Sanitary and phytosanitary import clearances that serve as import licenses are required prior to the importation of all agricultural commodities. imported distilled spirits. and suitability of packaging materials for food use. All food products offered for sale in the Philippines must be registered with the Philippine Food and Drug Administration (FDA). meat and poultry products. although some documentation and. In addition. Registration of imported products may only be undertaken by a Philippine entity. poultry. and.S. and produce require a registered importer to be the receiver of the shipment. for certain types of products. compliance with U. particularly for labeling. Effective on January 1. In all cases. corn. and fishery items.  Import Requirements for Food Products The Philippines is a signatory to the World Trade Organization (WTO) and has lifted quantitative restrictions (QRs) on imports of food products except for rice. a minimum access volume certificate is required for products entering at the lower in-quota duty such as pork.00) shall increase by four percent effective on January 1. Minimum Access Volumes (MAV) has been established for these commodities.  A specific tax of twenty pesos (P20.00) per proof liter. 2015:  An ad valorem tax equivalent to 20 percent of the net retail price (excluding excise tax and value-added tax) per proof liter. v. including feeds. samples need to be provided. pork. plant and plant products. Hence. seafood. the specific tax rate of twenty pesos (P20. Tariff-Rate Quotas (TRQs) still remain on a number of sensitive products such as corn. In addition to the ad valorem tax. . imported meat. will almost always assure compliance with Philippine regulations.S. and every year thereafter. regulations for packaged foods. 2. The excise tax decreased significantly for many higher-value. good manufacturing practices. 2016.

faster than previous year’s growth of 6. up 0. FocusEconomics panelists see GDP growth of 6.7 percent for the entire year of 2017.6 percent. Moreover.3 percent. rebounding from a 1. the government’s strong investment push should buttress fixed investment and contribute to fill part of the infrastructure gap.3 percent growth recorded in the fourth quarter of 2016.6% in 2018. and Real Estate. Measuring Nation’s Income Chapter 5 Philippines This year should see the economy expanding at a pace largely similar to 2017. Industry had the fastest growth of 7. GNI grew by 6. driving the economy to grow by 6. As a result. Net Primary Income (NPI) accelerated by 4.1 percentage points from last month’s forecast. 6. Philippine Economy Posts 6. Trade. Household spending is expected to expand robustly thanks to the measures contained in the TRAIN. Gross National Income (GNI) posted a growth of 6.7 percent in 2017 Gross Domestic Product (GDP) posted a 6.2 percent.4 percent.3 percent decline in the same quarter of the previous year. Manufacturing. Among the major economic sectors during the fourth quarter of 2017. Agriculture grew by 2. followed by Services which grew by 6. while NPI’s growth is at 5. However.8 percent during the quarter. . and 6.5 percent.1 percent compared with the 3.5% in 2019. Renting and Business Activities were the main drivers of growth for the fourth quarter.0 percent.6 Percent GDP Growth in the Fourth Quarter of 2017. external conditions could become less supportive. On an annual basis.6 percent growth in the fourth quarter of 2017.

per capita GDP and per capita GNI grew by 5.With the country’s projected population reaching 105. .1 percent and 4. respectively.7 percent.3 million in the fourth quarter of 2017.

Consumer Price Index CPI in Philippines averaged 45. National Statistical Office Philippine Statistics Authority . reaching an all time high of 150.60 Index Points in November of 2017 and a record low of 1.77 Index Points from 1957 until 2017.70 Index Points in January of 2018 from 151.10 Index Points in December of 2017. Measuring the Cost of Living Chapter 6 Philippines Consumer Price Index CPI in Philippines increased to 152.30 Index Points in February of 1957.

sector statistics. enforce and administer civil registration functions in the country as provided for under Act 3753. Bureau of Agricultural Statistics (BAS) of the Department of Agriculture and the Bureau of Labor and Employment Statistics (BLES) of the Department of Labor. the PSA shall carry out the reorganization of the PSS in such a manner that personnel of the agencies absorbed by the PSA shall continue to perform their respective duties and responsibilities in a “holdover capacity” so as not to unduly delay the production of statistics from ongoing censuses. surveys and processing of administrative records. The PSA headed by the National Statistician shall be primarily responsible for all national censuses and surveys. Moreover. during the transition period. National Statistical Coordination Board (NSCB). . 2013 mandate the reorganization of the Philippine Statistical System (PSS) and the creation of the Philippine Statistics Authority (PSA) attached to the National Economic and Development Authority (NEDA) for purposes of policy coordination through the merging of the National Statistics Office (NSO). consolidation of selected administrative recording systems and compilation of national accounts. the Law on Registry of Civil Status. Section 6 (e) of the law also directs the PSA to carry out.Sections 3 and 5 of Republic Act 10625 (known as the Philippine Statistical Act of 2013) approved on September 12. As provided by Section 29 of RA 10625.

08. The Price Statistics Division (PSD) of the PSA acts as the secretariat of the IACPS. surveys and censuses of the PSA shall be considered privileged communication and as such shall be inadmissible as evidence in any proceeding. Data are provided free of charge to other government data producing agencies upon request. institution or business enterprise shall appear. corporation. The legal authority to collect the data is provided in RA 10625. Access to the PSA offices is restricted to staff only. The collection of data for the CPI is done by the PSA Field Offices under the coordination and supervision of PSA Central Office-PSD. association. The committee is chaired by a person representing the member agency in the Committee is appointed by the PSA. However. partnership. The PSA may release aggregated information from statistical inquiries.Price index: Consumer prices The PSA is responsible for the compilation of the CPI. Section 27 of RA 10625 states that any violation of this Act shall result in the imposition of the penalty of one (1) . The field offices are instructed to maintain appropriate levels of confidentiality in the storage of the collected individual price data. agencies have to pay the total cost of survey operations if they request for the conduct of special price surveys. National Statistical Office Philippine Statistics Authority Section 26 of RA 10625 states that individual data furnished by a respondent to statistical inquiries. surveys and censuses in the form of summaries or statistical tables in which no reference to an individual. The Inter-Agency Committee on Price Statistics (IACPS) which was formerly known as the Technical Committee on Price Statistics before the reconstitution and renaming per Memorandum Order No. and all information on the PSA servers is password protected. The follow-up of this law is guaranteed by internal procedures. The IACPS coordinates and reviews the methodologies of PSA.

There are about 17 personnel in the Central Office that do the final processing and computation of the CPI. Meanwhile. updating and computation of the provincial. a sort of data appreciation was given to the staff wherein the emphasis of the .00) to Five hundred thousand pesos (P500. A window-based system developed using visual basic in the encoding. They are frequently in personal contact with the respondents and had established rapport with them. The PSA Provincial Statistics Officers and the Central Office staff work within the approved budget for the collection and processing of the monthly statistical series. One computer is dedicated for the consolidation of all the results during the peak periods of processing and tabulation.000.During trainings. Price index: Consumer prices Noncompliance has not been a problem for the price collections. four (4) price collectors and one (1) statistician for each district during each survey round are responsible for the collection and verification of the weekly prices for food and alcoholic and non-alcoholic beverages items. Field Offices’ Price Collectors maintain good relationships with the respondents. regional and national indices. non-food items are gathered twice a month by a minimum of four (4) price collectors for each of the thirteen sample areas covered. Central Office used in the compilation of the statistical series.000. For the National Capital Region. There are about eighteen (18) computers in the PSA-PSD. A minimum of six (6) price collectors in every province collects prices for each survey period while one provincial staff does the consolidation of prices. The PSA promotes a vision and a quality policy that are well known by the staff.year imprisonment and a fine of One hundred thousand pesos (P100.00).

lecture is on the importance of the statistical series. and other statutory requirements. their intended use for the data requested and how satisfied they are with the delivery of their request. such as computing technology for data processing/dissemination. It adheres to the UN Fundamental Principles of Official Statistics in the production of quality general-purpose statistics and commit to deliver civil registration services in accordance with the laws. Periodic reviews of working processes were undertaken to ensure that they are improved particularly during the rebasing of the CPI series. The PSA strives to make the best use of newly emerging opportunities. Periodic reviews of budgeting procedures were undertaken to ensure that scarce resources are best employed in addressing major data problems or meeting new data priorities. The IACPS and the PSA Board chaired by the Secretary of the National Economic Development Authority (NEDA) do the assessment of the statistical series. seminars and workshops organized by international and regional organization to keep them informed of the recent trends in prices statistics. rules and regulations. The Philippine Statistics Authority commits to deliver relevant and reliable statistics and efficient civil registration services to our clients and stakeholders. It endeavors to live by the established core values and corporate personality of the PSA and adapt the appropriate technology in the development of our products and delivery of services. to effect resource savings. The Consumer Price Index User’s Manual that discusses in detail the manual and machine processing of the CPI along with the solutions to the common problems are provided to all the price collectors and processors for their reference. . PSA staff involved in generating price statistics attend price and price related meetings. The division also utilizes a feedback monitoring form that is being filled-up by the data users/requesters to know basic information such as their organization. Giving examples are also included in the discussion.

It is done by comparing the current outlet price of a commodity with its previous month’s price in the same outlet and comparing current average price with the previous month’s average price. field offices are required to verify or submit justifications. 10 percent from the others in the group).g. In practice. The PSA also implements the Statistical Survey Review and Clearance System (SSRCS) which involves the process of evaluating the design and instruments of statistical surveys conducted by government agencies. For the PSA field offices. Provincial price data collection is supervised by the provincial and regional office and problems encountered are brought to attention of the central office. . the PSA has various validation stages from data collection and CPI compilation.e if there is an unusual price change either very high or very low e. If there is a big difference in the two outlet’s price data or in the two average prices. and Review of the reasonableness and completeness of price data and the accuracy in the computation of current average prices. It gives recognition on the overall quality of data submitted by the field office by evaluating the field offices on timeliness. Comparison of item prices in different outlets (i. Immediate verification of the reasonableness and reliability of prices of commodities and services in a given area for a given month is done by: Careful examination of price survey reports. quantity and quality of their data.It commits to continually improve the effectiveness of our Quality Management System to ensure equitable development towards improved quality of life for all. a Field Award System has been developed and implemented.

Copies of the national and regional tables and the accompanying press release are e-mailed to local and international wire agencies. during which papers are presented and awareness in the use of statistics is emphasized. October is designated as National Statistics Month. Professionalism is seen as a cornerstone in the PSA. As elsewhere in government. There are forward plans that allocate budgetary resources to future statistical development based upon identified statistical needs for compiling the statistical series. The Laspeyres method is currently used in computing the 2006-based CPI. The CPI is generated from survey data collected weekly and twice a month through the Survey of Retail Prices of Commodities and Services. The NSO’s budget proposal is being presented to the Congress/Senate for approval.Checking of outliers is also included in the routine of the CPI processing system. The agency (public or private) requesting special data shares funding with NSO’s developmental activities. and the management clearly promotes a culture of professionalism through training and coordination within the PSS. Detailed commodity and provincial tables are also available at PSD. each position has been evaluated with Qualification Standard set by the Civil Service Commission (CSC). It is posted at the PSA website (www. Section 2 of RA 10625 early sets the ground for the independence of the statistical system. The CPI is made available to the public five (5) days after the reference month. Project proposals are submitted to funding agencies for funding research and methodological studies done at PSA. .psa.ph) at 10:00 A.M. The staff are also encouraged to present papers on conferences. as well as in other occasions.gov. Random spot checking of price data is done by central office staff in all provinces. The PSA is guided by the principles of truth and professional integrity. The Statistical Methodology Unit (SMU) of PSA reviews the methodology and/or develop new methodology appropriate for the undertakings of the agency. on the 5th day of each month. These tables are also available in hard copy at PSD of the PSA.

PSA publishes summary methodologies explaining the use of its price statistics and a metadata on CPI is updated regularly. Comments to misunderstandings are provided during meetings of National Price Coordinating Council where private associations are represented. Attribution is requested for any reference to its statistics or publications. The data sets were documented using the Microdata Management Toolkit and are disseminated through the National Data Archive. To prevent misunderstandings. monthly and annual publications all include PSA logo and name of the PSA. to the Secretary of the National Economic and Development Authority (NEDA) and to the Governor of the Bangko Sentral ng Pilipinas (BSP). The monthly press releases are also signed by the National Statistician. one day prior to the scheduled date of release for information. . A documentation of the survey and its results are posted in the PSA archive which is available in the PSA website. ADP is implemented as a satellite program of the PARIS21 Secretariat and is supported by the World Bank Marrakech Action Plan for Statistics (MAPS) Development Grant Facility. The repository system was developed in collaboration with the Organization for Economic Cooperation and Development (OECD) under its Accelerated Data Program (ADP) which hopes to make rapid improvements in the quality and availability of survey data in developing countries. including the CPI. under seal. Price index: Consumer prices A copy of the CPI monthly report and the accompanying press release is hand-delivered.Price index: Consumer prices The PSA follows regularly newspaper columns referring to its statistics and issues rejoinders on erroneous reporting. Price index: Consumer prices The CPI press release. An advanced release calendar is being posted on the PSA website and a press release is given in advance for the monthly schedule of release of various data.

the release of the data. A full report on the details of the rebasing of the CPI to 2006 was posted on the PSA web site on October 4. Since price is the cost or the amount of money for which something can be bought or sold. are emphasized to the informants as well as users of data. It shows how much on the average. The PSA’s core values emphasize the integrity. 2011) prior to the official release of the series. prices of goods and services have increased or decreased from a particular reference period known as base year. The obligations of PSA and its staff. The Core values of the office are posted on the website. Any changes in the methodology are usually implemented at the time when the rebasing of the series is done. since it happens relatively predictably in about every six years. the PSA has already completed the rebasing the CPI from 2006 to 2012.Changes in methodology. Currently. data or base year are first discussed in length at Interagency Committee meetings. CPI . New staff are made aware or these objectives during orientation and reminded periodically by the management.1. where also main users both in the government and private sector including the academe are represented. objectivity. Notice of major changes in methodology is made through press releases prior to. General codes of conduct for the staff are circulated in the form of a memorandum by the PSA. The latest rebase of CPI (2006-based) was announced through a press release by the PSA (June 28. This process takes time and most users are aware of this. The new CPI series is expected to be available by the second quarter of 2018. as provided by the legislation referred in 0. or together with. and professionalism of the statistical agency’s staff. Data revisions are indicated by footnote and are included in the next month’s release. A press release is also issued ahead of publishing a new series. 2011. weights.1. CPI is a single number used to measure changes in the average retail prices of a market basket or collection of goods and services commonly purchased by an average Filipino household.

It is the reference point of the index number series. Inflation rate is defined as the annual rate of change or the year-on-year change in the CPI. That is. CPI1 represents the CPI in the previous period. It is computed by getting the reciprocal of the CPI and multiplying the result by 100. Purchasing Power of Peso (PPP) is a measure of the real value of the peso in a given period relative to a chosen reference period. Detailed guide for specifying the characteristics of sample goods and services are provided to the field staff. Market basket is a term used to refer to a sample of goods and services that are commonly purchased and bought by an average Filipino household. adjusting or escalating wages and a deflator to express values in real terms. Base Period/Base Year refers to the period. The Inter-Agency Committee on Price Statistics reviews the price concepts and the methodology used in rebasing the series and in generating the monthly CPI.where CPI2 represents the CPI in the second period. Its objective is to compare price movements in different areas of the country and to measure change in the value of money or of the purchasing power of peso. usually a year.The monthly survey of price data is also in line with international standards. Retail Price refers to the price at which a commodity is sold in small quantities for consumption. It also serves as basis for determining inflation rates. That is. at which the index number is set to 100. Weight is a value attached to a commodity or group of commodities to . and resulting item specifications are centrally reviewed.therefore compares the current cost of certain goods and services with their cost at an earlier time. The CPI series constructed and published by PSA is specifically called the CPI for All-Income Households because the market basket and the weights in the CPI refer to the average income households.

Transactions covered by the CPI also broadly meet the household final consumption defined in the 1993 SNA. Prices of sample commodities/services were quoted from the sample outlets or sample establishments nationwide. This survey of retail prices is undertaken simultaneously in all provincial capitals or cities where the PSA provincial offices are located and in about 600 municipalities. . This includes households of all income levels and urban and rural households. Prices are collected through personal interviews from selected stalls in public markets. Permanency of outlet. as well as production for own final consumption. In particular. The scope is broadly consistent. sari-sari (variety) stores. and Accessibility of the outlet. expenditure on capital formation in form of owner occupied housing is included.indicate the relative importance of that commodity or group of commodities in the market basket. Consistency and completeness of stocks. The sample outlets were selected according to the following criteria: Popularity of an establishment along the line of goods to be priced. but otherwise all resident households are included. Institutionalized people are being excluded from the households. supermarkets and service shops all over the country thru the Survey of Retail Prices of Commodities and Services for the generation of CPI.

The 1993 SNA was used to classify the households and transactions. including taxes and distribution margins the consumer actually pay. Imputed rents from owner-occupied housing are not included in the monthly price survey. All unprocessed food items are priced every Tuesday of the reference week while all processed food items. and rental equivalent is used for owner occupied housing. The weight data are valued at purchasers’ prices. . Also. as well as illegal market goods and services. Review and maintenance of all national classifications are centralized at the PSA and various Technical Committees discuss the needs and issues with both producers and users of statistics. etc. beverages and tobacco are priced every Friday/Saturday of the reference week. Basis for recording is broadly consistent. Summer Sale.Exceptions to coverage Transactions is confined on cash basis only in the market and excludes blackmarket prices and prices of commodities which are on “sale” as in Christmas Sale. detailed products were collected for the monthly index. Prices of non-food items are gathered during the first five days of the month and on the 15th day of each month. Anniversary Sale. Market prices are used for own account production. Selling market prices for specific. Classifications used in the CPI meet the standards. Gifts and contribution to others and some other disbursements are also excluded. Durable consumer goods bought on second hand markets are left out of the price collection. Interest payments on credit purchase were excluded. Product classification used in the CPI follows the 2005 Philippine Commodity Classification for Individual Consumption According to Purpose (PCOICOP) patterned after the UNCOICOP. the amount of rental paid monthly by the households must exclude payments made on electricity and/or water.

In the absence of a price tag. if the sample house which is to be replaced has only one bedroom then the replacement must also be a house with only one (1) bedroom. The entry is carried all through the succeeding months until the next school year. . This survey of house rentals is done monthly. test purchase which means buying an item for the purpose of checking the price. weight/volume or its contents. so to attain a reasonable degree of consistency in pricing identical groups of items in the market. No price data for second hand purchases are collected. prices of some commodities are available from their price tags. usually before 10:00 a. fresh fish.. In many cases. personal observations which involve personal visit to the stores to find and record the prices marked on the items. Prices may be collected through personal interview. Prices of some service items are gathered less frequently.g. Prices of thesegoods are taken during the time of the day when most housewives do their marketing. the same addresses or the same housing unit regardless of its occupants must be the source of data in every survey period.Special attention is given to the pricing of highly perishable goods. once implemented. No netting in the weights is needed with respect to second hand goods. i. e. Thus. School tuition fees are taken twice a year... In the case of house rentals. quality. every beginning of the school semester (June or July and October or November as the case may be). telephone inquiry. an appropriate substitute should be selected. The entry is carried through the succeeding months until the next semester. Changes in transportation fares.m.e. vegetables and fruits. Elementary and high school tuition fees account for the monthly/annual fees. If the structure does no longer exist or if it has ceased to be rented. The amount of rental paid monthly by the households must exclude payments made on electricity and/or water. either. an inquiry from the storekeeper on the price of a particular commodity listed in the survey forms is being done. are immediately included in the computation of CPI for NCR and included in the next survey round in areas outside NCR if the implementation date falls after the survey period. College fees accounts for the per semester fees.

. Six (6) price quotations are required for every commodity or service listed in the forms.Except for Processed Food. Six (6) price quotations are required for every commodity or service listed in the forms. Beverages and Tobacco (FBT) which is monitored on a weekly basis in NCR. Prices for all commodities and cost of services must be taken from the same establishments already selected as regular price outlets. Only two (2) price quotations are required for every commodity or service listed in the forms. price collection is done twice a month to effectively monitor price changes. These are taken from the provincial capital. First collection phase is done during the first five days of the month while the second phase is on the 15th to 17th day of the month. In areas outside NCR. two (2) of these six (6) price quotations are taken from the provincial capital and the other four quotations from the sample municipalities.

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83 percent and Services by 0.86 from 51.40 percent. The local unit finished the week’s first trading session at 51.38 percent. Volume for the day reached USD516 million. Mining and Oil and Holding Firms also ended positively after these increased by 0.3 million a day ago. Higher foreign fund flows in the local equities market also boosted the local curency. bringing the average to 51. It was able to improve to 51. 0.005 percent. the unit opened better at 51.89 Friday last week.38 points. the trader said.00 Tuesday.42 points. the PSEi recovered and ended its three-day slump due to bargain hunting. or 2.499.9 billion. hike to 5.06 percent.88.82. Also. The broader All Shares followed with a 0. It went up by 0. Most of the sectors also finished with gains.81 percent. to 8. respectively. Industrial. The currency pair is seen to trade between 51.80 and 52.75 but was also pulled to 51.59 percent increase. Volume reached 4. .98 points. On the other hand.82 points.81 billion shares amounting to PHP9. Property fell by 0. For the day. which disadvantaged the greenback.80 against its 52. A trader pointed this to drop in US Treasury yields.00 start in the previous session.066. or 32. CHAPTER 7 PHILIPPINES Risk-on sentiment returned to the Philippines’ financial markets Monday and enabled both the peso and the Philippine Stock Exchange index (PSEi) to stay up. led by the Financials through a 1.60 percent and 0. down from USD656.

continue to surpass gainers at 112 to 105 while 43 shares were unchanged. Francisco said it was a “rare chance for institutions to get sizeable number of shares. Asked why he thought demand was strong for PSE shares. Bourse’s SRO priced above market at P252/share The PSE’s offering. (PDS Group).” Eduard Francisco.” “Also. marking a premium of 6.7 percent from the last traded price of P236. will run from March 12 to 16. Eligible stockholders of record as of March 1 will be given the right to subscribe to one new PSE share for every 6. said in a text message on Saturday. In a disclosure on Friday night.. It was surprising as stock rights are usually priced at a discount so this is the only SRO where it is priced above market. “We had a book-building and there was good demand from new investors so (pricing was) cleared at P252.” Francisco said. About 51 percent of the proceeds from this offering will be used to repay debt to be incurred in connection with its plan to acquire the Philippine Dealing Systems Holdings Corp. without any cornerstone investor backing. this reinforces their belief in combined stock and bond exchange.9-billion stock rights offering (SRO). adding that the demand all came from local investors.20 per share despite the volatile global financial markets. president of BDO Capital. the PSE said it had priced its stock rights offering at P252 per share.3847 shares held.Losers. arranged by BDO Capital and First Metro Investment Corp. however. The Philippine Stock Exchange (PSE)—racing against time to pursue an equity deal that could make or break its goal of unifying the country’s capital market infrastructure—has attained a surprising premium pricing for its P2. the holding firm for fixed-income trading platform Philippine Dealing .

.9-billion stock rights offering will allow the PSE to comply with the ownership limit as the sale of new shares to new investors will dilute the cumulative shares of stock brokers. vice president of fund management firm Philequity in an investors’ briefing on Saturday. which goes to show how much demand there is for shares of the PSE. To date. the PSE will still have to seek exemptive relief from the SEC to be able to acquire a controlling stake in PDS. Philippine Depositary and Trust Corp. This is a very attractive rights offering. “The pricing was very good.” said Miguel Agarao. That should increase the earnings of the PSE significantly. the Securities and Exchange Commission (SEC) issued exemptive relief to a handful of institutional investors which were invited come in to reduce stock brokers’ ownership of the local bourse. “They are buying the PDS. who has called out the PSE’s noncompliance to the 20-percent ownership limit of any single industry in an operating exchange. The stock rights offering will not be open to the brokers. To allow the demutualization or the conversion of the PSE from a nonstock. Once these are achieved.” Agarao said. and Philippine Securities Settlement Corp. It’s priced above market price which is unheard of in rights offerings. the PSE has signed deals with multiple parties that will give it 69. most of the proceeds from the offering will allow the PSE to pay for the shares in PDS that it will acquire.. ensuring that the PSE’s offering will be fully subscribed. A underwriting commitment has been signed with BDO Capital and First Metro for the SRO on Friday. But over a decade this demutualization. The P2.03-percent control of PDS. But it is facing an increasingly impatient regulator. At the same time. for-members only institution to a corporation held by stockholders in the 2000s. Finance Secretary Carlos Dominguez III. stock brokers’ cumulative ownership in the PSE is still in excess of 20 percent.and Exchange Corp.

34 pesos to the US dollar on Monday. It took no less than Finance Secretary Dominguez to ensure that full compliance is finally achieved. the bank’s governor said on Sunday. The SEC has welcomed what it deems as a “healthy” competition between Landbank and the PSE to take over PDS.” PSE chair Jose Pardo said.” PSE president and chief executive Ramon Monzon said. It ended the week at 51.inquirer.net/246566/bourses-sro-priced-market-p252-share#ixzz58 VCACJwI Follow us: @inquirerdotnet on Twitter | inquirerdotnet on Facebook Philippines pesos to US dollar exchange at 11-year lows Philippines central bank sells its dollar reserves as a defensive measure to manage excessive peso volatility. Measures taken .“This is a reform that has remained unresolved for many years. “The firm commitment of our underwriters to our SRO effectively reduces the ownership of brokers in the Exchange to below 20 percent. Meanwhile. Compliance with the Securities Regulation Code on the 20 percent maximum broker ownership in the Exchange has finally been achieved. The Philippines central bank is selling its dollar reserves as a defensive measure to manage excessive volatility driven by speculation against the peso. Read more: http://business. The Philippine peso closed at an 11-year low at 52. a rival bid to take over PDS has emerged from the state-controlled Land Bank of the Philippines.89. which is hovering near an 11-year low.

the central bank cut banks’ reserve requirement ratio by one percentage point to 19 percent. calling the fears of ensuing looser monetary policy "unfounded"." Espenilla told reporters. the highest since October 2014.The chief of the Bangko Sentral ng Pilipinas (BSP) sought to allay concern that recent market reforms would put more pressure on an already weak currency and stoke inflation. is expected to inject more than $1.5 billion in damages yearly due to typhoons and earthquakes." he said. The rule. Espenilla said. "What BSP is executing is just an operational adjustment that should have a neutral effect on the monetary policy stance. Around 20 typhoons make landfall in the Philippines every . Speculators. the BSP has many options to maintain firm monetary control. are using the reduction as a factor that could dampen the peso. PHILIPPINES The Philippines’s disaster risk financing and insurance strategy It is estimated that the country experiences a total of $3. adding that the tongue cancer he had been diagnosed with in November was successfully treated and he was closely monitoring the financial markets. which hit four percent in January. The central bank chief also dispelled market concern that a cut in banks’ reserve requirement ratio would accelerate inflation. Policy setting has remained steady since the central bank raised rates by 25 basis points in September 2014. The central bank lowered the reserve requirement to promote a more efficient and level financial system that is less biased against deposit-taking financial institutions. On February 16.5bn in liquidity. "BSP sells foreign exchange from its reserves to manage excessive peso volatility. which will take effect in March. "The bottom line." said BSP Governor Nestor Espenilla. Espenilla said.

Parametric Insurance Policy ON July 28. will provide catastrophe risk-insurance coverage for the national government. In addressing the issue of disaster risk financing.” There are. the GSIS is also mandated to insure government properties. 2017. and 25 selected and disaster-prone provinces. assets. with priority for those agencies involved in disaster risk-management. There is also the Disaster Risk Reduction and Management Fund under the general appropriation law. 2017. Commission on Audit and the Bureau of Treasury (BTr). insurance for government properties is recognized as one of the critical components. Under this program. This insurance program for government has been described as the “last line of defense against severe natural disasters. the National Economic and Development Authority. Office of Civil Defense. other financial-protection schemes put in place by which the Philippine government can address such calamitous occurrences.year. the Government Service Insurance System (GSIS). the GSIS. as the insurer. Other government agencies also had vital roles in the formulation of the program. and other interests under Republic Act (RA) 656 (Property Insurance law). All of these fall squarely under a general plan called the National Disaster Risk Reduction and Management Plan 2011-2028. The financial cost of these natural disasters is simply astounding. These include the Department of Budget and Management. This program is pioneering and is the first of its kind for the country. The premium for the program was allocated under the National Disaster Risk Reduction and Management Fund of the 2017 General Appropriations Act (RA 10924) in the amount . These would include the Development Policy Loan with a Catastrophe-Deferred Drawdown Option (CAT-DDO 2) which provides $500 million of standby financing. however. the Philippines launched a parametric catastrophe risk-insurance program (also called “Parametric Insurance Policy” and “climate insurance”) for government properties with the collaboration of the Department of Finance (DOF). the World Bank and the United Kingdom Department for International Development. The insurance coverage is good for one year starting July 28. While principally a state pension fund. the Department of the Interior and Local Government.

Payouts and coverage The parametric insurance program has a total coverage of $206 million (or about P10. through which the participating provinces were selected. Cagayan. Under a projected scenario. representing the national government and the LGUs. Camarines Sur. Rizal. Premiums have two categories.1 million) for typhoons and 20. Davao Oriental. P500 million of the fund will be allocated 79. Batanes. In other words.9 million) for earthquakes. disaster-specific and province-specific. The other P500 million will be province-specific and split equally among the 25 provinces at P20 million each.6 billion) for national government assets and assets of selected local government units (provinces). will act as the intermediary to transfer or cede GSIS’s risks to selected international reinsurers. was provided by AIR Worldwide. Isabela. These reinsurers are: Nephila. Pampanga. For disaster-specific premiums. Davao del Sur. through the International Bank for Reconstruction and Development. The provinces were chosen on the basis of their vulnerability to selected hazards. Surigao del Norte. Leyte. This is the first time that the World Bank will act as an intermediary for a reinsurance contract. Munich Re (through New Re). The risk modelling. The risks covered are earthquakes and typhoons for national government . Laguna. Ilocos Norte. The insurance payouts will then soon be released to the BTr. The reinsurers were selected through competitive bidding.2 percent (P396. Dinagat Islands. the World Bank. inclusive of cost for documentary stamp tax.5 million). reinsurance payouts will be released to the GSIS within two weeks after a disaster strikes. maximum peak ground acceleration and the average annual loss.of P1 billion ($19.8 percent (P103. Cebu. Aurora. Catanduanes. In turn. Swiss Re. AXA and Hannover Re. Northern Samar. Sorsogon. The BTr is the designated policyholder. it will transfer the local risks outside the country or to the global reinsurance market. Insurance proceeds will be released to the national government agencies and the LGUs within three weeks from the disaster. Camarines Norte. Eastern Samar. such as maximum wind speed. Quezon. The 25 provinces given the typhoon-insurance coverage include: Albay. Ilocos Sur. Surigao del Sur and Zambales.

It will also have no restrictions as to use. such as roads. will depend on estimated losses as determined by the catastrophic risk model.assets and typhoons only for provinces. Under RA 10924. The World Bank According to Joaquim Levy. they will be allocated for the repair and reconstruction of transport infrastructures. such as the Caribbean Catastrophe Risk Insurance Facility and the Pacific Catastrophe Risk Insurance Company.” Thus.” This program began in 2014 when the GSIS started discussions with the DOF and the World Bank to create a catastrophe risk-insurance program. and to reduce the impact on the poorest and the most vulnerable. Partial payouts are also allowed for “medium” disasters. The amount of payouts to provinces. school buildings. The World Bank had previously extended assistance to other catastrophe insurance programs. “Climate change is increasing the demand for and cost of insurance. to develop sustainable financing mechanisms. power and water infrastructures. as well as utilities. managing director and CFO of the World Bank Group. poor people and nations—those least responsible for climate change—are paying the . ports. local government buildings. empowering local governments to more effectively assist their citizens. Insurance payouts are triggered by the occurrence of parametric indicators. especially for poor countries. through the BTr. the insurance proceeds are specific for “government facilities. and airports. As stated by Jonathan Reeves of ActionAid International. The program’s development objectives are the maintenance of sound fiscal health. “Financial shocks caused by natural disasters undermine economic growth and poverty reduction. as well as for flood control and drainage facilities. evacuation centers. Catastrophe risk insurance is not without critics. The cost of premiums is seen by some as a burden. This new insurance program illustrates how the World Bank Group can leverage capital from the market to help governments receive fast cash injections for emergency response and to sustain essential services in times of crisis. bridges. agricultural infrastructure. hospitals. Yet.

.vast majority of the premiums.” It argues that needed resources are wastefully being diverted into long-term insurance facilities.

Of the country's total labor force of around 40. and fruits.201 billion. The 1997 Asian Financial Crisis affected the economy. Meanwhile. due to lower charges in basic necessities. South Korea. Taiwan. In the 1960s its economic performance started being overtaken.593 billion. resulting in a lingering decline of the value of the peso and falls in the stock market. The extent it was affected initially was not as severe as that of some of its Asian neighbors. the Philippines were for a time regarded as the second wealthiest in East Asia. Meanwhile. The country is a net importer but it is also a creditor nation. This was largely due to the fiscal . the inflation rate eases to 3. Agriculture employs 30% of the Filipino workforce as of 2014. next only to Japan. The Debt-to-GDP ratio continues to decline to 38. stands at 6. Filipinos planting rice. After World War II.1% as of March 2014 from a record high of 78% in 2004. petroleum products. the Netherlands. A newly industrialized country. the Philippine economy has been transitioning from one based upon agriculture to an economy with more emphasis upon services and manufacturing. Singapore. Gross international reserves as of October 2013 are $83. China. coconut oil. the agricultural sector employs 30% of the labor force. transport equipment.0%. Only in the 1990s with a program of economic liberalization did the economy begin to recover. Japan. garments. Hong Kong.7% in November. and Thailand. The economy stagnated under the dictatorship of President Ferdinand Marcos as the regime spawned economic mismanagement and political volatility. with an estimated 2017 gross domestic product (nominal) of $348. The industrial sector employs around 14% of the workforce and accounts for 30% of GDP.813 Million. Germany. The country suffered from slow economic growth and bouts of economic recession. Chapter 8 Unemployment The Philippine economy is the 34th largest in the world. Major trading partners include the United States. and accounts for 14% of GDP. Primary exports include semiconductors and electronic products. The unemployment rate as of 14 December 2014. Its unit of currency is the Philippine peso (₱ or PHP). copper products. the 47% of workers involved in the services sector are responsible for 56% of GDP.

The Philippines is a member of the World Bank. September 14. in comparison to the massive spending of its neighbors on the rapid acceleration of economic growth. Philippines total worth of foreign exchange remittances was US$28 billion. the World Trade Organization (WTO). In 2004. HSBC also projects the Philippine economy to become the 16th largest economy in the world. Despite constraints.conservatism of the government. the G-77 and the G-24 among other groups and institutions. although the government has taken steps to distribute economic growth by promoting investment in other areas of the country. the International Monetary Fund.45% in comparison to an average of 5. 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. Regional development is uneven. effective October. There have been signs of progress since. the Asian Development Bank which is headquartered in Mandaluyong. Minimum wage earners in Metro Manila will now earn P21 more after the regional wage board issued its decision on petitions for a wage increase on Thursday.1% in 2007.96% for the East Asia and the Pacific region as a whole. Goldman Sachs estimates that by the year 2050. Remittances peaked in 2010 at 10. the economy experienced 6. Average annual GDP growth per capita for the period 1966–2007 still stands at 1. The economy is heavily reliant upon remittances from overseas Filipinos. the Colombo Plan.6% in 2012 and in 2014. and were 8. which surpass foreign direct investment as a source of foreign currency. The . it will be the 20th largest economy in the world. partly as a result of decades of monitoring and fiscal supervision from the International Monetary Fund (IMF). The wage hike is way below the amounts that 3 labor unions proposed in their petition filed last June. with Luzon – Metro Manila in particular – gaining most of the new economic growth at the expense of the other regions. 5th largest economy in Asia and the largest economy in the South East Asian region by 2050. Goldman Sachs includes the country in its list of the "Next Eleven" economies but China and India have emerged as major economic competitors. The daily income for 45% of the population of the Philippines remains less than $2.4% GDP growth and 7. its fastest pace of growth in three decades. This brings the minimum wage to P512 from P491.4% of the national GDP.

https://en. "The P21 increase in daily wage remains insufficient for families to cope with rising prices of goods and increasing costs of goods. P21 is only 4.wikipedia. while the Trade Union Congress of the Philippines (TUCP) asked for a P259 increase and the Association of Minimum Wage Earners and Advocates (AMWEA) wanted the minimum wage to be raised to P1. The subsidy. Workers who helped built a high economic growth of 6.3 billion a month or P15 billion a year. But Labor and Employment Secretary Silvestre Bello III earlier said it will be difficult to approve the subsidy because it will cost the government P1." he said. (READ: Labor union to wage board. So it obviously did not lift workers out of poverty.9% average gross domestic product do not deserve this very small amount.rappler.org/wiki/Philippines https://www.200 in 4 tranches.51 in July based on figures from the Bangko Sentral ng Pilipinas (BSP) and the National Wages and Productivity Commission (NWPC). employers: Try living on P357 a day) ALU-TUCP spokesperson Alan Tanjusay lamented the measly hike.Associated Labor Unions (ALU) sought a P184 increase. Labor groups are proposing that funds from the Office of the President be used for the subsidy.Tanjusay said they will be urging President Rodrigo Duterte to grant their request last April for a P500 subsidy for minimum wage earners to alleviate poverty. similar to the Pantawid Pamilyang Pilipino Program.com/nation/182191-minimum-wage-increase-granted-metro-manila- workers . would be in cash voucher form if granted. The labor unions also stressed that the purchasing power of P491 already slid to just P354.27% of the current P491.

For instance. gold is precious purely because people want it. Gold therefore serves as a physical token of wealth. more advanced example of commodity money is a precious metal like gold – which for centuries was used to back paper currency up until the 1970s. this meant that foreign governments were able to take their dollars and exchange them at a specified rate for gold with the U. . confusing and inefficient. each possessing some goods the other wanted. you can't eat it. as you can see. In the 17th and early 18th centuries.S. This early form of barter. however. Another. Two individuals. these commodities were used to buy and sell other things. portable and easily storable.. To solve these problems came commodity money: a type of good that functions as currency.e. American colonialists used beaver pelts and dried corn in transactions. Federal Reserve. possessing generally accepted values.. for example.and so on. unlike the beaver pelts and dried corn (which can be used for clothing and food. What's interesting is that. gold is something you can safely believe has worth. based on people's perception. In the case of the American dollar. does not provide the transferability and divisibility that makes trading efficient. So. The lack of transferability of bartering for goods. if you have cows but need bananas. would enter into an agreement to trade. you must find someone who not only has bananas but also the desire for meat. money – people would barter to obtain the goods and services they needed. What if you find someone who has the need for meat but no bananas and can only offer you bunnies? To get your meat. but the majority of people think it is beautiful. you may not think a bunch of them is worth a whole cow. is tiring. he or she must find someone who has bananas and wants bunnies. for example. The kinds of commodities used for trade had certain characteristics: They were widely desired and therefore valuable.The Monetary System Before the development of a medium of exchange – i. It is not necessarily useful – after all.. and they know others think it is beautiful. and it won't keep you warm at night. You would then have to devise a way to divide your cow (a messy business) and determine how many bananas you are willing to take for certain parts of your cow. respectively). but they were also durable. But that is not where the problems end: Even if you find someone with whom to trade meat for bananas.

Roosevelt's support. we can gain some insight into how money gains its value – as a representation of something valuable. but the 1945 arrival of American liberation forces. As it was a monetary law. aided by Philippine Commonwealth troops and recognised guerrillas. discussions continued regarding the idea of a Philippine central bank that would promote price stability and economic growth. aborted its implementation. 52. Under the Commonwealth. through the Bureau of Banking. he instructed then-Finance Secretary Miguel Cuaderno. which would grant Philippine independence after 12 years. Quezon. The country's monetary system then was administered by the Department of Finance and the National Treasury. this would be the Tydings–McDuffie Act. the First Philippine Commission passed Act No. As required by the Tydings–McDuffie Act. In 1900. which was backed by 100 percent gold reserve. the Department of Finance. By 1933. which placed all banks under the Bureau of the Treasury and authorizing the Insular Treasurer to supervise and examine banks and all banking activity. the Hare–Hawes–Cutting Act would be rejected by the Senate of the Philippines at the urging of Commonwealth President Manuel L. This Senate then advocated a new bill that won United States President Franklin D. Shortly after President Manuel Roxas assumed office in 1946. and the Philippine piso was on the exchange standard using the United States dollar. In 1929. However. Franklin D. The . 1946. it required the approval of the President of the United States. but reserving military and naval bases for the United States and imposing tariffs and quotas on Philippine exports.If we think about this relationship between money and gold. A second law was passed in 1944 under the Japanese-controlled Second Republic during the Second World War. Roosevelt did not give his. as the standard currency. took over bank supervision. the National Assembly of the Philippines in 1939 passed a law establishing a central bank. The establishment of a monetary authority became imperative a year later as a result of the findings of the Joint Philippine-American Finance Commission chaired by Cuaderno. which would grant Philippine independence on July 4. a group of Filipinos had conceptualised a central bank for the Philippine Islands. to draw up a charter for a central bank. Sr. It came up with the rudiments of a bill for the establishment of a central bank after a careful study of the economic provisions of the Hare–Hawes–Cutting Act.

Years later.wikipedia.Commission.org/wiki/Bangko_Sentral_ng_Pilipinas . monetary. emphasizing the maintenance of domestic and international monetary stability as the primary objective of the Central Bank. Over the years. and fiscal problems in 1947. was further improved to strengthen the financial system.org/wiki/Monetary_policy_of_the_Philippines https://en. President Ferdinand Marcos' Presidential Decree No. recommended a shift from the dollar exchange standard to a managed currency system. 1972. In the 1973 Constitution. In 1981. The Bank's authority was also expanded to include regulation of the entire financial system of the Philippines and not just supervision of the banking system. 72 amended Republic Act No. A central bank was necessary to implement the proposed shift to the new system. which studied Philippine financial. the interim Batasang Pambansa (National Assembly) was mandated to establish an independent central monetary authority. Presidential Decree No. https://en. among the changes was the increase in the capitalization of the Central Bank from Php10 million to Php 10 billion. On November 29.wikipedia. 1801 designated the Central Bank of the Philippines as the central monetary authority (CMA). changes were introduced to make the charter more responsive to the needs of the economy. as amended. 265. RA 265. the 1987 Constitution adopted the CMA provisions from the 1973 Constitution that were aimed essentially at establishing an independent monetary authority through increased capitalization and greater private sector representation in the Monetary Board.

3 percent rise in .9 percent in January 2018 from 3 percent in December 2017.7 percent from 3.2 percent).9 percent).5 percent gain. On a monthly basis. as cost of food and transport surged while cost of housing continued to increase.4 percent) while inflation was steady for: clothing and footwear (1. prices rose more for: transport (3. consumer prices rose 1 percent. restaurant & miscellaneous goods & services (3. accelerating from a 3. and alcoholic beverages & tobacco (12.3 percent rise in previous month and above market expectations of a 3. Also.5 percent. health (2. household equipment and routine maintenance (2 percent from 1. following a 0.4 percent). prices of heavily-weighted food and non-alcoholic beverages increased at a faster 4. Prices slowed for both housing. and education (2. after a 3.6 from 2. In January.3 percent from 6.8 percent in December 2017) and recreation and culture (1. gas & other fuels (3. communication (0. It was the highest inflation rate since October 2014.4 percent).4 percent from 1.7 percent from 3 percent). furnishing. water electricity.5 percent).2 percent from 2.8 percent).5 percent rise in the preceding month.2 percent). CHAPTER 9 Money Growth and Inflation PHILIPPINES Philippines Inflation Rate 1958-2018 Consumer prices in the Philippines increased 4 percent year-on-year in January of 2018. Core inflation rate went up to a near 5-year high of 3.

December. For example. Cost was flat for education and communication. health (0. recreation and culture (0.5 percent). such as the Federal Reserve Board in the United States of America. and restaurant and miscellaneous goods and services (0. water.1 percent). gas & other fuels (0. alcoholic beverages & tobacco (5. transport (0. o rgov-ernment controls the supply and availability of money. M3.5 percent). These indicators tell whether to increase or decrease the supply. and stabilize currency.4 percent). M2.1 M1: Narrow Money .the cost of money.7 percent).9 percent). electricity. and the Bangko Sentral ng Pilipinas in the Philippines.1 percent). these are used by economists to confirm their expectations and help forecast trends in consumer price inflation. and taxes). 1. etc. the government’s intentions in regulating the economy and the consequences that result from it. The New Generation Philippine Banknotes Money supply indicators are often found to contain necesssary information for predicting future behavior of prices and assessing economic activity. Monetary policy of the Philippines Monetary policy is the monitoring and control of money supply by a central bank. clothing & footwear (0. It was the highest inflation since February 2011. furnishing. Prices increased for most categories: food (1. to a certain extent.4 percent). Moreover. and the rate of interest. Monetary Policy is generally the process by which the central bank. housing. Measures that include not only money but other liquid assets are called money aggregates under the name M1. Monetary Policy is considered to be one of the two ways that the government can influence the econ-omy–the other one being Fiscal Policy (which makes use of government spending.9 percent). This is used by the government to be able to control inflation. household maintenance and routine maintenance (0. the government may opt to increase money supply to stimulate the economy or the government may opt to decrease money supply to control a possible mishap in the economy. One can pre-dict.

4 M4: Liquidity Money These include M3 plus transferable deposits. time deposits and balances in retail money market mutual funds. both bills and coins. 1.M1 includes currency in circulation. and other checkable deposits.3 M3: Broad Money Liabilities Broad Money Liabilities include M2 plus money substitutes such as promissory notes and commercial papers.2 M2: Broad Money This is termed broad money because M2 includesa broader set of financial assets held principally byhouseholds. Adjusted M1 is calculated by summing all the components mentioned above. 1.5 Implications If the velocity of M1 and M2 money stock has been low. tourists’ checks from non-bank issuers.this indicates that there is a lot of money in the hands of consumers and money is not changing hands frequently. Basically. Generally we would expect that when money supply indicators are growing faster than interest rates plus growth. 1. these are funds readily available for spending.Money . Philippines . treasury bills and deposits held in foreign currency deposits. This contains all of M1 plus peso saving deposits (money market deposit accounts). 1. highly liquid assets will be included in this measure. Almost all short-term. plus peso demand deposits. It is the base measurement of the money supply and includes cash in the hands of the public.

The decisions were motivated by manageable inflation and well-anchored inflation expectations.5%. and robust economic growth were the key drivers of the BSP’s decisions. Philippines Interest Rate Forecast Against this backdrop. as well as the government’s ongoing infrastructure push.Money Data 2012 2013 2014 2015 2016 Money (annual variation in %) 9. In its communiqué. Meanwhile. marking an over three-year high. economic growth was again spurred by strong private consumption and fixed investment. The ODF establishes the floor. Moreover.5 9. the Bank left the reserve requirement ratios untouched. The Bank thus considers the spike in inflation to be transitory. whereas the OLF establishes the ceiling of the interest rate corridor system. as domestic demand remains buoyant and the global economic recovery continues at a sustained pace.1 13. The BSP last hiked interest rates in September 2014.80% for the end of 2019. Philippines . all decisions were in line with market expectations.0 percent plus or minus 1. Finally. However.0 percentage point in 2019. respectively. the Bank stated that the current monetary policy stance should be maintained going forward. it kept the Overnight Lending Facility (OLF) and the Overnight Deposit Facility (ODF) rates steady at 3. as well as economic growth.6% year-on-year in Q4. the PMI for January suggests the pace of economic activity moderated in the manufacturing sector. FocusEconomics Consensus Forecast panelists expect that the Central Bank will raise the RRP this year. up from December’s 3. Manageable and within-target inflationary pressures. it also specified that it will stand ready to take the actions deemed necessary to safeguard price and financial stability. which came into effect on 1 January.Central Bank of the Philippines (BSP) decided to leave the Overnight Reverse Repurchase Facility (RRP) rate unchanged at 3. the external sector’s contribution to growth swung from positive to negative in Q4. However. and forecasts that inflation will return to within the inflation target range of 3.5% and 2.0% in January.51% for the end of 2018 and 3. Price pressures in January intensified on the back of higher excise taxes imposed by the Tax Reform for Acceleration and Inclusion (TRAIN). GDP expanded 6.3 . which nevertheless continued to enjoy expansionary conditions.5 10. mainly due to possible future increases in oil prices. inflationary risks remain tilted to the upside. as import growth accelerated on the back of stronger domestic demand.4 33. with an average forecast of 3. Moving into 2018. Inflation accelerated to 4.0%.3%.

Source: Central Bank of the Philippines. Philippines Money Chart Note: Annual variation of M2 in %. .

1 percent. An absence of entrepreneurial dynamism thwarts development. and the rule of law. The gradually modernizing financial sector remains relatively stable and sound. overseas banks have been allowed to acquire 100 percent equity in existing banks.6 point. Open-Economy Macroeconomics PHILIPPINES Trade is significant for the Philippines’s economy. but deeper institutional reforms are required in interrelated areas: business freedom. and property rights indicators outpacing improvements in trade freedom and judicial effectiveness. The average applied tariff rate is 2. The strong growth of the Philippines’ economy has allowed the government to prioritize domestic law-and-order issues over economic policy concerns. Its overall score has decreased by 0. The judicial system remains weak and vulnerable to political influence. the combined value of exports and imports equals 65 percent of GDP. Figure 4: Exports and Imports (as % of Nominal GDP) . Since 2014. monetary freedom. The Philippines is ranked 13th among 43 countries in the Asia–Pacific region. with lower scores for the government integrity. and its overall score is above the regional and world averages. Some fiscal reforms have been adopted. A rapid decline in the president’s popularity caused investor confidence to wane by the end of 2017. Nontariff barriers impede trade. Government openness to foreign investment is above average.0. making its economy the 61st freest in the 2018 Index. investment freedom. The Philippines’ economic freedom score is 65.

From 2003 to 2004. OFW remittances have grown by 12. Despite this. . the balance of trade has been negative. the growth of the current account surplus is expected to continue.Figure 4 shows imports and exports as proportions of GDP.55 billion.8% to around US$ 8. With the perceived shift in 8 the nature of services rendered by OFWs to more knowledge-based ones. The rising current account surplus in the face of a negative trade balance and fluctuating capital and financial flows can be traced to the rapidly accelerating inflow of remittances from overseas Filipino workers (OFWs). the current account has shifted to an increasingly positive BOP balance. This positive BOP balance seems to persist in the face of fluctuating capital and financial flows. By this time. The graph indicates that except for very brief periods. the International Monetary Fund (IMF) recorded growth of the current account balance at 465.28%.