ind cators

COMPREHENSIVE MACROECONOMIC ADVICE FROM THE EXPERTS

A publication of the School of Economics, University of Asia & the Pacific, Philippines

The peso, the dollar,

and the problem of
“jobless” growth
Everybody wants an economic miracle for the Philippines, which would mean not
only high gdp growth but also a significant increase in employment and income
nationwide. The best way to achieve this goal has not been determined. As in other
aspects of development, the experience of some of our Asian neighbors can provide
useful lessons, one of which is on the relationship between currency valuation and
R E C E N T job generation. This article presents empirical findings on how a peso depreciation,
ECONOMIC when undertaken carefully, can lead to economic competitiveness with real-world
benefits such as jobs for the majority of the country’s population.

Victor A. Abola, Ph.D.

Associate Professor
School of Economics, ua&p

ISSN 0116–6743

R
ecently, one of the most positive economic news came out,
june but few, including high-profile government officials, took
2014 notice. We refer to the April 2014 Labor Force Survey
released on June 10 by the National Statistics Office, which
showed that the economy created 1.65 million new jobs in the
year ending April 2014. This was one of the few times in which
new jobs exceeded the 1.15 million entrants into the labor force,
IN THIS ISSUE
as estimated by the World Bank.1
Economic indicators 7
1
World Bank (2014). “Philippine Economic Update: Pursuing Inclusive Growth through Sustainable
Reconstruction and Job Creation,” p. 39.
 2 The peso, the dollr, and the problem of “jobless” growth • Victor A. Abola
2014 2012
MARCH

By contrast, despite rapid gross domestic product the peso appreciates. Our capital goods (machinery
(gdp) growth of 6.8% and 7.2% in 2012 and 2013, and equipment, buildings and infrastructures) are
respectively, the Philippine economy generated an imported to a large extent. Thus, when the peso
JUNE

annual average of only 260,000 new jobs for those appreciates, capital goods become cheaper relative
indicators

two years (see Figure 1). Those years had been dubbed to labor, and more capital goods are used in the
economicindicators

as having “jobless” growth, which confounded many production of goods and services.
analysts. We, however, were not surprised, as we shall Looking at the spending side, again, we can
explain in this article. consider the prices of imported goods relative to
the prices of domestically
Figure 1 • Net new jobs created, April 2010-April 2014
produced goods. When the
peso appreciates, imported
goods become relatively
2,500 0 Annual Increase in Labor
cheaper than locally
2,000 0 produced goods; thus, more
Average Jobs Created of our spending is diverted
1,500
recenteconomic

to imported goods, whether

1,000 raw materials or finished
500 products.
The latter is also
0
expressed in our balance
-500 of trade (i.e., exports
minus imports of goods).
-1,000
A peso appreciation makes
-1,500 imports more attractive
Apr-10 Oct-10 Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 for domestic producers or
recent

Source of basic data: NSO, World Bank

consumers while exports
become less competitive
in the world market. Thus, a trade deficit emerges
The fundamental reason: peso overvaluation
or enlarges. For example, in 2012 and 2013, the
The basic macroeconomic model is that of a circular
Philippines’ trade deficit was 7.2% and 6.8% of gdp,
flow of goods and services, which is expressed in the
respectively. During those years, according to the
following equation:
National Statistical Coordination Board, the country
spent P756B and P790B on imports over and above
Production = Income = Spending
income generated from exports in 2012 and 2013,
respectively. The amount reflected a situation in
where employment is related to input to production
which significant spending of the country did not
for which they are compensated (thus, constituting
create domestic employment. On the contrary,
income).
although few local jobs were created, more jobs
How goods are produced and what goods attract
abroad were generated.
income spending are fundamentally dependent on
Overvaluation indeed retards growth and
relative prices—a key concept in economics. The
employment generation, as already pointed out
same goods and services may be produced by a mix
by numerous economic studies. However, the
of labor and capital inputs. That mix is affected by
opposite—i.e., the case of undervaluation promoting
the productivity of labor and capital and their relative
faster economic growth and employment—had
prices. If capital becomes relatively cheaper than
failed to earn consensus in the economic academe.
labor, the producers use more capital than labor for
Nevertheless, new evidence exists to support both
their additional production. This is the case when
propositions. One example is particularly startling.
The peso, the dollar, and the problem of “jobless” growth • Victor A. Abola 3

By contrast, that of the

Figure 2 • A glaring example
Philippines was $3,270 in
the same year. These figures
show that South Korea was
7.9 times richer than the
Philippines. Obviously, the
exchange rate in itself does
1950 Exchange Rate P2.00/$1 2.50 Won/$1 not reflect prosperity. What
the contrast implies is that
2014 Exchange Rate P44/$1 1,030 Won/$1 South Korea deliberately
allowed its exchange rate to
1950,53 $Per Capita Income $175 $125 depreciate so that it would
be more competitive in the
2013 $Per Capita Income $3,270 $25,920
world markets and generate
more employment and
Korea’s Per Capita GNI now 7.9x more than PH income for its people.
The next question is
whether this example can be
generalized and embodied into a theory as empirical
A surprising contrast evidence of economic growth.
Let us start with a glaring example: contrasting the
Philippine exchange rate and per capita income levels Empirical determinants of economic growth
over a 60-year period to those of South Korea. While this article focuses on exchange rate valuation
Flashback to the 1950s when the exchange rates and economic growth and job generation, the studies
of the two countries were fairly close relative to the that we rely on investigate its statistical significance
US dollar. The Philippines had an exchange rate of together with other well-known determinants of
P2.00/$1 while South Korea had 2.50 won/$1 in economic growth. These include beginning level of
1953. South Korea was the poorer part of the Korean per capita income, education, health (life expectancy),
peninsula and its standard of living was not even close infrastructure and communication spending,
to that of the Philippines. inflation, initial percentage of potential labor force,
However, South Korea developed and implemented trade openness, financial openness, and governance/
economic policies similar to those responsible for institutions.

UNIVERSITY OF ASIA & THE PACIFIC

the success story of Japan at that time: export- The first proposition is that “currency overvaluation
driven growth made possible by an undervalued or impedes growth,” which is generally accepted by
competitive exchange rate. most economists and confirmed by many studies. As
Fast forward to 2014. The peso-dollar rate is roughly explained, a lower peso-dollar rate makes imports of
P44/$1 at present, while the South Korean exchange raw materials, finished goods (especially machinery
rate is approximately 1,030 won/$1 or roughly more and equipment) more attractive than producing
than 23 times needed to obtain $1 compared to the goods for domestic and export markets, leading to
Philippine peso. Should we then rejoice? large balance of trade (X-M) deficits. With domestic
If we judge simply by the exchange rate levels, production discouraged and some manufacturing
South Korea should be worse off than the Philippines. firms going bankrupt (e.g., garments in the 1990s,
However, when we look at the per capita income (or furniture starting in 2004), less investments would be
per capita gross national income) of the two countries, made.
we would see that the opposite is true. A cursory look at the share of the Philippine
According to the World Bank, the per capita manufacturing sector in total gdp would support this
income of South Korea was $25,920 in 2013. view. In 1990, the sector’s share was 25.7%. After
 4 The peso, the dollar, and the problem of “jobless” growth • Victor A. Abola
2014 2012
MARCH
the peso appreciation in 1993-1996, this figure fell
to 24.3%. However, the peso appreciation from 2004
to 2011 was even more pronounced. In 2004, the
JUNE
peso-dollar rate averaged P56.0339 and tended to
indicators
appreciate; by 2011, the exchange rate had plunged
economicindicators
by 22.7% to P43.313. As of 2011, the manufacturing
sector’s share in total gdp had dropped further to
22.4%.
The other side of the coin
Conversely, an undervalued real exchange rate should
promote faster growth for the following reasons: (1)
it makes exports more competitive and domestic
goods relatively cheaper than imported raw materials
or finished goods; and (2) with increased domestic
recenteconomic
production, firms earn higher profits that lead to
increased investments. The former is obvious, and for
the latter, higher profits enable firms to expand their
production capacity by financing it with additional
profits and/or using the same to repay loans for
expansion. In other words, undervaluation promotes
faster economic growth through the investments
channel. Undervaluation has become synonymous
with export-led growth, the main characteristic of the
“Asian miracle” that has occurred in Japan since the
recent
1950s and in China since the 1980s.
If this proposition is so easy to understand, why
have developing countries been slow to embrace this
policy? An important reason is that this contrary
proposition to the earlier one—that overvaluation
slows growth—has found few advocates in the
academe.
Surjit Bhalla (2012), an Indian economist who
had worked for the imf, World Bank, and Goldman
Sachs, uncovered the problem of measurement errors
in determining undervaluation or overvaluation,
which is no small task. In econometrics, this type of
error “biases estimated relationships toward zero” or
does not show any apparent statistical relationship.
The breakthrough came in 2007-2008 when both
Dani Rodrick2 of Harvard (2007) and Bhalla3 (2008)
found positive association of faster growth with
undervaluation, after more efforts to remove the
2
Dani Rodrick (2007), “The Real Exchange Rate and Economic
Growth: Theory and Evidence,” unpublished paper. Cambridge, MA:
Harvard JFK School of Government.
3
Surjit Bhalla (2008), “Economic Development and the Role of
Currency Undervaluation,” Cato Journal, Vol. 28, No. 2. pp. 313-340.
“measurement errors,” both across samples usually
exceeding 100 countries and time periods covering
more than a few decades.
Since then, Bhalla has subjected the newfound
relationships to different specifications or tests, and
obtained results that were not much different from his
earlier findings. Bhalla has put together his studies in
the book Devaluing to Prosperity (2012), which takes
a closer look at the more recent period from 1950 to
2011 based on the long-term data of 180 countries.4
He has validated the overall results in specific country
experiences as well.
We find a corollary to this observation quite
appealing. If undervaluation promotes faster growth,
then it should generate more jobs as more domestic
production is undertaken for the same amount or
equivalent spending. The recent three-decade-long
average 10% growth of China, during which period
it also recorded continuing trade surpluses and lifted
more than 500 million people out of poverty, is a
phenomenal feat in modern economic history.
Besides, our empirical studies would show also
that for every peso of appreciation, the Philippine
government loses P23.5B in tax revenue.5 The converse
would be a gain for every peso of depreciation.
Two decades of growth before appreciations
The actual experience of our East Asian and asean
neighbors confirm the positive impact of currency
undervaluation. In concrete terms, Bhalla (2012)
finds that for the period 1950-2011, the Philippines’
per capita grew only by an average 1.0% per annum
compared to the average 4.7% annual gains of the
asean 7. A large part of this growth is due to the fact
that the annual undervaluation of the Philippine peso
was only 1.0% compared to 2.4% for the asean 7.
That is not all. The currency appreciations in East
Asian “miracle” countries occurred only after two
decades of rapid growth. Whether from the short
period, such as Hong Kong’s 11-year (1973-1997)
growth spurt with an average 7.8% annual growth
before having a currency appreciation to South
4
Surjit S. Bhalla (2012), Devaluing to Prosperity: Misaligned
Currencies and Their Growth Consequences. Washington D.C.: Petersen
Institute for International Economics.
5
Victor A. Abola (2013), Unpublished results updating, “The
Problems of a Strong Peso.” UA&P-SEC Recent Economic Indicators,
October 2007. Pasig City: University of Asia and the Pacific. pp. 1-3.
The peso, the dollar, and the problem of “jobless” growth • Victor A. Abola 5

Korea’s 9.2% annual growth over 26 years (1960- rate. For example, if the peso depreciates by 10%,
1986), the experience has been similar. In fact, for then the inflation rate rises by an additional 10%, all
nine East Asian and asean countries, a long period of other things equal.
rapid growth (with an average of 8.75% per annum) The reality, however, differs strongly from the
occurred before the country allowed its currency to theory. Even in advanced countries where the erpt is
appreciate. In terms of duration, the average period is expected to be high, it is less than 1 and only 72%
an astonishing 23.9 years. is transmitted to import prices for 11 Eurozone
countries6 (Campa and
Figure 3 • Peso appreciation and GDP growth rate Goldberg, 2005). Since
imports usually constitute
9.6%
only a small part of consumer
Malaysia Average No.
Average Number of Years:
of Years: 23.9
23.9 Years spending, the pass through
Hong 7.8% Average GDP
Average GDP Growth
GrowthRate:
Rate:8.75%
8.75%
Kong, SAR to inflation should be much
Singapore 9.9% less than the aforementioned
figure.
Japan 9.0%
In the Philippines, several
Taiwan 9.0% economists, including
Thailand 7.0% ourselves, have estimated the
erpt, this time all the way to
Korea 9.2%
inflation rates. Prior to 1993,
China 9.8% the erpt was estimated at
Indonesia 6.4% 33%, i.e., for every 10% peso
0 5 10 15 20 25 30 35 depreciation, only a third or
NO. OF YEARS BEFORE APPRECIATING 3.3% is added to the inflation
rate (Lamberte, 2003).
For the Philippines, being a small country (and a However, this figure had declined by half for the
laggard) in the world economy, the negative impact period 1993-2004 (Balbieran and Hernandez, 2006).
of an undervalued or competitive peso on other The most recent finding, which covers 2000-2011,
countries is likely to be minimal. After all, our shows a further decline of erpt to only 3.8% (Abola
progressive neighbors have already done it and no one and Mercado, 2014). Thus, a 10% peso depreciation
complained. adds only 0.38% to inflation, which is definitely

UNIVERSITY OF ASIA & THE PACIFIC

minimal.
Possible objections The main reason for the low impact of exchange rate
Two possible objections may be posed. First, doesn’t changes on the inflation rate is the foreign exchange
theory and actual experience say that inflation and tariff liberalization of the early 1990s that
follows currency depreciation? Second, doesn’t the exposed Philippine producers to foreign competition.
government benefit from a currency appreciation In short, when a peso depreciation occurs, domestic
when it has to pay its foreign debts? producers can no longer simply pass on the higher
In tracing the effect of currency depreciation on costs of raw materials or finished goods to consumers,
the inflation rate, economists have formulated the unlike during the earlier era of high tariffs and trade
concept of exchange rate pass through (erpt), which restrictions (quotas). They have to become more
simply measures how much of the percentage change efficient and/or use cheaper local raw materials.
of the currency is eventually transmitted to the The second objection refers to the positive effect
inflation rate. In this case, the prevailing economic of a peso appreciation on the payment (interest and
theory is 1-for-1, i.e., 100% of the percentage change 6
J. Campa and L.S. Goldberg (2006), “Distribution Margins,
in the exchange rate is transmitted to the inflation Imported Inputs and the Sensitivity of the CPI to Exchange Rates.”
Federal Reserve Bank of New York Staff Reports, April 2006.
 6 The peso, the dollar, and the problem of “jobless” growth • Victor A. Abola
2014 2012
MARCH

How can the government

Figure 4 • Exchange rate pass through
take advantage of the

REALITY
present situation in which
JUNE

the current exchange rate

indicators

is lower than when the

economicindicators

debt was contracted? We

% % Increase in
Study have already examined this
Depreciation Inflation Rate
angle (Abola, 2013)7 and
Prior to 1993 10% 3.0%-3.5% found that it is best for the
government to take actual
After 1993 (Lamberte, 1993-2002;
Tan & Hernandez, 1993-2004)
10% 1.5%-1.6% profit from the situation
now by paying off some
2014 (Mercado-Abola, 1993-2011)
10% 0.38% long-standing foreign
loans with high interest
Implication: FX rate as a tool to control inflation is misplaced rates (coupon rates) and
recenteconomic

replacing them by peso debt

with lower interest rates.
principal) of the government’s foreign loans. This is In other words, any policy to promote employment
undeniable and we have studied this angle as well (some would say, “quality” employment) could
(Abola, 2013). First of all, this perspective considers easily be subverted by an appreciating or overvalued
only the payment part of the equation. We have peso. We have to keep in mind that unless the peso
shown that the government loses some P23.5B in tax becomes undervalued, Filipinos will not see the
revenues for every peso appreciation. The amount “economic miracle” that we all want for the country.
is much larger than the savings of P5.7B (in 2011) Nevertheless, we need to act quickly because the poor
on debt servicing. Thus, the government loses a net simply cannot wait. rei
recent

amount of P17.8B per peso appreciation.

7
Victor A. Abola (2013), “A Sensible Debt Management Strategy,”
UA&P-SEC Recent Economic Indicators, October 2013. Pasig City:
University of Asia & the Pacific.
T R E N D S 7

I EXTERNAL SECTOR
TABLE I PHILIPPINE BALANCE OF PAYMENTS (NEW CONCEPT) (US$ million)

Accounting period Growth (%)
2013 2014 Year-to-
Sep Oct Nov Dec Jan Feb Monthly Annual date

CURRENT ACCOUNT................................................................... 426 . ..... 2,107 . ....... 998 . ....... 592 ........ (263)........ 1,438 . ........ 646.77 ...... 121.23 ........ (19.24)
Goods and Services............................................................... (1,430)......... (224)..... (1,244)..... (1,385)...... (1,991)......... (439)............. 77.95 ........ 58.82 ........ (34.03)
Exports................................................................................. 5,888 . ..... 6,247 . .... 5,623 . .... 5,698 ....... 4,888 ....... 5,086 . ............ 4.05 ........ 12.32 ........... 5.00
Imports................................................................................. 7,318 . ..... 6,471 . .... 6,867 . .... 7,083 ....... 6,879 ....... 5,525 . ......... (19.68)......... (1.23)........... 9.65
Goods................................................................................. (2,108)......... (731)..... (1,687)..... (2,005)...... (2,319)......... (938)............. 59.55 ........ 43.49 ........ (15.05)
Credit: Exports.................................................................... 3,730 . ..... 4,296 . .... 3,728 . .... 3,664 ....... 3,225 ....... 3,393 . ............ 5.21 ........ 11.32 ........... 0.29
Debit: Imports.................................................................... 5,838 . ..... 5,027 . .... 5,415 . .... 5,669 ....... 5,544 ....... 4,331 . ......... (21.88)......... (8.01)....... 675.58
Services.................................................................................... 679 . ........ 508 . ....... 443 . ....... 620 .......... 328 .......... 499 . .......... 52.13 ....... (15.99)........ (18.68)
Credit: Exports.................................................................... 2,159 . ..... 1,951 . .... 1,895 . .... 2,034 ....... 1,663 ....... 1,693 . ............ 1.80 ........ 14.39 ......... 15.72
Debit: Imports.................................................................... 1,480 . ..... 1,443 . .... 1,452 . .... 1,414 ....... 1,335 ....... 1,194 . ......... (10.56)........ 34.76 ......... 34.31
Income........................................................................................ 33 . .......... 36 . ....... 234 . ..... (142)........... 100 .......... 236 . ........ 136.00 ........ 10.80 ......... 30.74
Credit: Receipts........................................................................ 665 . ........ 708 . ....... 689 . ....... 679 .......... 685 .......... 737 . ............ 7.59 ........ 18.30 ......... 11.53
Debit: Disbursements.............................................................. 632 . ........ 672 . ....... 455 . ....... 821 .......... 585 .......... 501 . ......... (14.36)........ 22.20 ........... 6.68
Current Transfers.................................................................... 1,823 . ..... 2,295 . .... 2,008 . .... 2,119 ....... 1,628 ....... 1,641 . ............ 0.80 .......... 9.18 ........... 8.57
Credit: Receipts..................................................................... 1,880 . ..... 2,346 . .... 2,041 . .... 2,170 ....... 1,687 ....... 1,683 . ........... (0.24).......... 8.93 ........... 8.85
Debit: Disbursements................................................................ 57 . .......... 51 . ......... 33 . ......... 51 ............ 59 ............ 42 . ......... (28.81)........... - .............. 18.82
CAPITAL AND FINANCIAL ACCOUNT........................................ 1,444 . ...... (539)........ (113)........ (774)...... (3,505)........... 525 . ........ 114.98 ...... 225.90 . (11,361.54)
Capital Account............................................................................. 8 . ............ 9 . ........... 7 . ......... 11 .............. 8 .............. 9 . .......... 12.50 ........ 12.50 ............ -
Credit: Receipts.......................................................................... 10 . .......... 11 . ......... 10 . ......... 12 .............. 9 ............ 10 . .......... 11.11 ........... - ............... (5.00)
Debit: Disbursements.................................................................. 2 . ............ 2 . ........... 3 . ........... 1 .............. 1 .............. 1 . ............. - ............ (50.00)........ (33.33)
Financial Account.................................................................... 1,436 . ...... (548)........ (120)........ (785)...... (3,513)........... 516 . ........ 114.69 ...... 221.41 ... (6,869.77)
Direct Investments..................................................................... (3)............. 72 . ......... 14 . ..... (121)........... 315 ............ 33 . ......... (89.52)....... (94.40)........ (60.54)
Debit: Assets, Residents’ Investments Abroad........................... 54 . .......... 51 . ......... 48 . ....... 118 ............ 25 .......... 116 . ........ 364.00 ...... 792.31 ....... 151.79
Credit: Liabilities, Non-Residents Investments in the Phils.......... 51 . ........ 123 . ......... 62 . ......... (3)........... 340 .......... 149 . ......... (56.18)....... (75.25)........ (47.87)
Portfolio Investments............................................................ 1,393 . ........ 273 . ..... (415)........ (806)...... (2,288)........... 284 . ........ 112.41 ....... (93.06)...... (149.00)
Debit: Assets, Residents’ Investments Abroad....................... (297)......... (141).......... (43).......... (67)........... 567 ........ (152).......... (126.81).. (1,281.82)....... 400.72
Credit: Liabilities, Non-Residents’ Investments in the Phils.... 1,096 . ........ 132 . ..... (458)........ (873)...... (1,721)........... 132 . ........ 107.67 ....... (68.12)...... (523.73)
Financial Derivatives................................................................... 17 . .......... (4)............ 20 . ......... 30 ............ 20 .......... (10).......... (150.00)........ 76.19 ....... 123.81
Debit: Assets, Residents’ Investments Abroad......................... (28)........... (19).......... (29).......... (37)........... (38)........... (16)............. 57.89 .......... 5.88 ........ (50.00)
Credit: Liabilities, Non-Residents’ Investments in the Phils....... (11)........... (23)............ (9)............ (7)........... (18)........... (26)............ (44.44).......... 7.14 ......... 43.59
Other Investments...................................................................... 29 . ...... (889).......... 261 . ....... 112 ..... (1,560)........... 209 . ........ 113.40 ...... 114.64 ........... 3.22
Debit: Assets, Residents’ Investments Abroad..................... 1,129 . ........ 399 . ....... 433 . ....... 202 ....... 1,053 .......... (61).......... (105.79)..... (126.41)......... 41.51
Credit: Liabilities, Non-Residents’ Investment in the Phils.... 1,158 . ...... (490).......... 694 . ....... 314 ........ (507)........... 148 . ........ 129.19 ...... 112.36 ......... 48.35
NET UNCLASSIFIED ITEMS....................................................... (1,387)...... (1,480).......... (33).......... 634 ..... (1,087)...... (1,564)............ (43.88)....... (41.80)...... (274.44)
OVERALL BOP POSITION.............................................................. 465 . ............ 5 . ....... 837 . ....... 419 ..... (4,480)........... 345 . ........ 107.70 ...... 135.94 ...... (481.46)

*Undefined: The divisor or the dividend is either zero or unavailable.

Source: Bangko Sentral ng Pilipinas (BSP)

TABLE 2 TRADE INDICATORS

UNIVERSITY OF ASIA & THE PACIFIC

Accounting period Growth (%)
2013 2014 Year-to-
Sep Oct Nov Dec Jan Feb Monthly Annual date

Foreign-exchange rate (P/$)................................................... 43.83 . ....... 43.18 ....... 43.55 . ....... 44.10 ........ 44.93 ........ 44.90 . ........ (0.07)........... 10.38 ..... 10.34
Gross international reserves (in US$ million)........................ 83,507 . ..... 83,607 ..... 83,572 . ..... 83,187 ...... 79,357 ...... 80,540 . .......... 1.49 ......... (3.69)....... (5.33)
Import cover of reserves (months)......................................... 11.70 . ....... 11.70 ....... 11.70 . ....... 11.50 ........ 10.90 ........ 11.00 . .......... 0.92 ......... (5.98)....... (6.81)

Note: Gross International Reserves includes the reserve position in the Fund.
Import cover is normally computed as gross international reserves over merchandise imports (of the same month). If the corresponding data are unavailable,
the import cover is computed as current GIR over the average import of the latest three months.

Source: BSP

TABLE 3 IMPORTS (US$ million)

Accounting period Growth (%)
2013 2014 Year-to-
Sep Oct Nov Dec Jan Feb Monthly Annual date

CAPITAL GOODS................................................................... 1,637 . ....... 1,499 ....... 1,599 . ....... 1,291 ........ 5,955 ........ 4,721 . ........ (20.73)..... 298.78 . .. 318.70
Power generating and specialized machines.......................... 361 . .......... 316 .......... 304 . .......... 310 ........... 389 ........... 290 . ........ (25.65)......... 4.20 . .... 15.52
Office and EDP machines...................................................... 135 . .......... 142 .......... 144 . ............ 99 ............. 95 ........... 103 . ........... 8.12 ...... (12.55)..... (19.91)
Telecommunications equipment and..................................... 607 . .......... 564 .......... 611 . .......... 397 ........... 447 ........... 333 . ........ (25.60)...... (47.04)..... (40.53)
electrical machinery
Land-transport equipment except......................................... 107 . .......... 109 ............ 97 . .......... 120 ........... 130 ........... 110 . ........ (15.52)......... 2.08 . .... 10.98
passenger cars and motorcycles
 8 T R E N D S
2014 2012
MARCH

TABLE 3 IMPORTS (US$ million)

Accounting period Growth (%)
2013 2014 Year-to-
Sep Oct Nov Dec Jan Feb Monthly Annual date
JUNE

RAW MATERIALS AND INTERMEDIATE GOODS..................... 2,401 . ....... 1,871 ....... 1,626 . ....... 2,048 ........ 2,370 ........ 2,173 . .......... (8.30)....... 28.99 . .... 31.64
indicators

Unprocessed raw materials................................................... 258 . .......... 220 .......... 136 . .......... 192 ........... 219 ........... 158 . ........ (27.85)....... 16.41 . ..... (6.57)
Wheat................................................................................. 86 . ............ 81 ............ 48 . ............ 72 ............. 93 ............. 50 . ........ (46.07)...... (32.43)..... (14.12)
economicindicators

Crude materials, inedible................................................... 151 . .......... 117 ............ 54 . ............ 43 ............. 64 ............. 80 . ......... 24.77 ....... 61.47 . ... (31.70)
Semiprocessed raw materials............................................. 2,143 . ....... 1,651 ....... 1,489 . ....... 1,857 ........ 2,151 ........ 2,015 . .......... (6.31)....... 30.09 . .... 36.70
Chemical........................................................................... 526 . .......... 477 .......... 463 . .......... 467 ........... 541 ........... 453 . ........ (16.26)......... 0.30 . ...... 5.04
Manufactured goods......................................................... 442 . .......... 416 .......... 439 . .......... 456 ........... 587 ........... 461 . ........ (21.50)....... 16.11 . .... 21.19
Embroideries.......................................................................... 9 . ............ 12 .............. 8 . ............ 12 ............. 11 ............... 3 . ........ (71.90)...... (75.26)..... (42.73)
Material and accessories for the...................................... 1,095 . .......... 614 .......... 480 . .......... 774 ........... 843 ........... 918 . ........... 8.99 ....... 61.85 . .... 83.47
manufacture of electrical equipment

MINERAL FUELS AND LUBRICANTS.......................................... 968 . .......... 715 ....... 1,221 . ....... 1,186 ........ 1,279 ........... 820 . ........ (35.89)...... (32.17)....... (1.74)
Crude petroleum.................................................................. 476 . .......... 316 .......... 653 . .......... 614 ........... 698 ........... 296 . ........ (57.58)...... (56.60)..... (14.78)

CONSUMER GOODS................................................................ 663 . .......... 705 .......... 718 . .......... 724 ........... 773 ........... 632 . ........ (18.22)......... 6.82 . .... 12.04
Durable.................................................................................... 340 . .......... 354 .......... 369 . .......... 372 ........... 336 ........... 296 . ........ (12.00)........ (3.73)........ 2.01
Passenger cars and motorcycles............................................ 208 . .......... 201 .......... 194 . .......... 220 ........... 176 ........... 193 . ........... 9.88 ......... 5.93 . ...... 6.01
Non-durable............................................................................ 323 . .......... 351 .......... 349 . .......... 351 ........... 437 ........... 336 . ........ (23.02)....... 18.22 . .... 30.04
Food..................................................................................... 299 . .......... 321 .......... 317 . .......... 314 ........... 397 ........... 306 . ........ (22.83)....... 19.56 . .... 32.77

Special transactions.................................................................... 42 . ............ 33 ............ 71 . ............ 45 ............. 38 ............. 33 . ........ (12.15)...... (12.79)..... (14.40)
recenteconomic

Articles temporarily imported and exported................................ 22 . ............ 13 ............ 17 . .............. 9 ............. 10 ............. 72 . ....... 600.33 ..... 338.13 . .. 137.64

TOTAL IMPORTS............................................................... 5,710.70 . .. 4,824.06 .. 5,235.57 . .. 5,294.34 ... 5,954.82 ... 4,720.55 . ........ (20.73)......... 0.28 . .... 13.15

Breakdown may not add up to totals due to rounding off

Note: The items in this table have been changed to conform with the BSP’s classification.

Source: National Statistics Office (NSO)

TABLE 4 EXPORTS (US$ million)

Accounting period Growth (%)
2013 2014 Year-to-
Sep Oct Nov Dec Jan Feb Monthly Annual date

COCONUT PRODUCTS............................................................................. 149 . ......... 89 . ....... 73 ........ 114 ........ 113 ......... 121 ............ 6.53 . ...... 6.70 . ..... (11.55)
Coconut oil............................................................................................. 81 . ......... 55 . ....... 42 .......... 82 .......... 82 ........... 74 ......... (10.45)....... (7.36)....... (18.71)
Desiccated coconut................................................................................. 17 . ......... 20 . ....... 14 .......... 13 .......... 13 ........... 19 .......... 42.36 . ...... 1.65 . ........ 9.61
recent

Copra meal/cake..................................................................................... 26 . ........... 9 . ....... 12 .......... 17 .......... 17 ........... 25 .......... 52.08 . .... 88.18 . ........ 4.08
SUGAR AND SUGAR PRODUCTS................................................................ 19 . ......... 17 . ....... 16 .......... 31 ............ 1 ........... 21 ..... 2,643.78 . ... (49.23)....... (74.70)
Centrifugal and refined........................................................................... 17 . ......... 16 . ....... 12 .......... 28 ............. - ........... 16 ............. - . ........ (60.46)....... (79.92)
FRUITS AND VEGETABLES........................................................................ 122 . ....... 143 . ..... 106 .......... 65 ........ 101 ......... 137 .......... 35.58 . .... 31.96 . ........ 6.16
Canned pineapple................................................................................... 20 . ......... 11 . ....... 10 .......... 17 .......... 10 ............. 8 ......... (15.61)..... (16.90)....... (21.82)
Pineapple juice.......................................................................................... 3 . ........... 4 . ......... 5 ............ 5 ............ 4 ............. 4 .......... 13.85 . .... 33.23 . ........ 1.30
Pineapple concentrates............................................................................. 3 . ........... 4 . ......... 2 ............ 3 ............ 2 ............. 2 ........... (3.40)..... (39.23)....... (42.10)
Bananas.................................................................................................. 70 . ......... 98 . ....... 66 .......... 29 .......... 66 ........... 99 .......... 51.33 . .... 58.75 . ...... 19.71
Mangoes.................................................................................................. 2 . ........... 1 . ......... 1 ............ 1 ............ 0 ............. 0 .......... 37.95 . ...... 3.69 . ..... (20.45)
OTHER AGRO-BASED PRODUCTS............................................................... 85 . ......... 86 . ....... 73 ........ 153 .......... 63 ......... 129 ........ 105.33 . .... 51.69 . ...... 22.40
Fish, fresh or preserved.....................................................................................................................................................................................................................
Shrimps and prawns............................................................................ 46 . ......... 46 . ....... 37 ........ 117 .......... 30 ........... 76 ........ 151.73 . .. 109.40 . ...... 49.27
FOREST PRODUCTS...................................................................................... 7 . ........... 8 . ......... 5 ............ 4 ............ 5 ............. 7 .......... 44.23 . .... 13.64 . ....... (7.50)
MINERAL PRODUCTS............................................................................... 373 . ....... 369 . ..... 188 ........ 187 ........ 150 ......... 237 .......... 58.25 . .. 139.90 . ...... 32.62
Copper concentrates............................................................................... 79 . ......... 56 . ....... 68 .......... 36 .......... 19 ........... 43 ........ 125.30 . .. 171.84 . .... 113.03
Copper metal.......................................................................................... 98 . ......... 73 . ....... 39 ............. - ............. - .............. - ............. - . ............ - . ........ (100.00)
PETROLEUM PRODUCTS............................................................................ 55 . ......... 48 . ....... 44 .......... 53 .......... 67 ........... 32 ......... (52.76)...... 11.55 . ....... (2.12)
MANUFACTURES.................................................................................. 4,162 . .... 4,178 . .. 3,720 ..... 3,914 ..... 3,798 ...... 3,885 ............ 2.28 . .... 22.42 . ...... 19.04
Electronic products, electronic equipment and parts........................... 2,150 . .... 2,160 . .. 1,944 ..... 1,907 ..... 1,780 ...... 1,880 ............ 5.62 . .... 26.77 . ...... 24.13
Garments.............................................................................................. 156 . ....... 154 . ..... 131 ........ 120 ........ 146 ......... 121 ......... (16.95)..... (16.10).......... 9.44
Furniture and fixtures.............................................................................. 34 . ......... 23 . ....... 16 .......... 20 .......... 23 ........... 32 .......... 41.06 . .... 88.38 . ...... 73.22
Chemicals............................................................................................. 248 . ....... 215 . ..... 141 ........ 153 ........ 179 ......... 212 .......... 18.66 . .... 65.15 . ..... (35.58)
Machinery and transport equipment..................................................... 343 . ....... 344 . ..... 347 ........ 259 ........ 386 ......... 412 ............ 6.63 . ..... (2.37)........ 11.20
Processed foods and beverages............................................................. 118 . ....... 152 . ..... 129 ........ 108 .......... 71 ......... 134 .......... 89.48 . .... 15.14 . ........ 5.44
Basketwork, wickerwork, and other activities............................................ 4 . ........... 5 . ......... 3 ............ 2 ............ 5 ............. 4 ......... (14.79)..... (25.41)......... (6.40)
of plaiting materials
Miscellaneous manufactured articles, n.e.s.............................................. 54 . ......... 43 . ....... 38 .......... 37 .......... 61 ........... 46 ......... (24.75)....... (9.82)........ 28.48
Others.................................................................................................. 468 . ....... 393 . ..... 345 ........ 744 ........ 529 ......... 381 ......... (27.98)...... 13.75 . ...... 40.34
SPECIAL TRANSACTIONS........................................................................... 85 . ......... 87 . ....... 69 .......... 83 .......... 81 ........... 86 ............ 5.80 . ..... (5.32).......... 4.68
RE-EXPORTS.............................................................................................. 10 . ......... 11 . ....... 13 ............ 7 .......... 15 ........... 16 ............ 4.98 . ... (31.36)....... (20.21)
TOTAL EXPORTS.................................................................................... 5,056 . .... 5,026 . .. 4,294 ..... 4,599 ..... 4,379 ...... 4,654 ............ 6.28 . .... 24.42 . ...... 16.53

Breakdown may not add up to totals due to rounding off

Source: NSO
T R E N D S 9

TABLE 5 OFW REMITTANCES BY COUNTRY OF ORIGIN AND TYPE OF WORKER (US$ million)

Accounting period
Growth (%)
2013 2014 Year-to-
Sep Oct Nov Dec Jan Feb M
onthly Annual date

ASIA.............................................................................. 282 ........... 306 .......... 293 ........... 306 .......... 277 ........... 270 ................ (2.63)............ 19.32 . ......... 10.69
Land-based.................................................................. 222 ........... 238 .......... 222 ........... 233 .......... 204 ........... 196 ................ (4.09)............ 16.50 . ........... 5.63
Sea-based...................................................................... 59 ............. 68 ............ 71 ............. 73 ............ 73 ............. 75 ................. 1.42 ............ 27.42 . ......... 27.14
Japan.............................................................................. 73 ............. 86 ............ 75 ............. 79 ............ 76 ............. 78 ................. 2.85 ............ 13.14 . ........... 9.53
Land-based.................................................................... 50 ............. 58 ............ 48 ............. 53 ............ 53 ............. 51 ................ (3.94)............ 11.91 . ......... 10.30
Sea-based...................................................................... 23 ............. 28 ............ 27 ............. 26 ............ 23 ............. 28 ............... 18.19 ............ 15.48 . ........... 7.98
Hong Kong..................................................................... 45 ............. 49 ............ 54 ............. 55 ............ 53 ............. 53 ................ (0.41)............ 46.35 . ......... 52.89
Land-based.................................................................... 34 ............. 36 ............ 33 ............. 34 ............ 29 ............. 31 ................. 5.51 ............ 20.89 . ......... 21.00
Sea-based...................................................................... 11 ............. 13 ............ 20 ............. 21 ............ 24 ............. 22 ................ (7.68).......... 107.90 . ....... 133.89
Singapore....................................................................... 97 ............. 99 ............ 98 ........... 102 ............ 89 ............. 90 ................. 1.08 ............ 22.63 . ......... 28.01
Land-based.................................................................... 79 ............. 79 ............ 81 ............. 83 ............ 70 ............. 72 ................. 2.26 ............ 27.75 . ......... 36.02
Sea-based...................................................................... 18 ............. 19 ............ 18 ............. 19 ............ 19 ............. 18 ................ (3.34).............. 5.82 . ........... 4.34

AMERICAS..................................................................... 896 ........... 932 .......... 977 ........ 1,010 .......... 797 ........... 806 ................. 1.22 ............. (2.35)............. 2.12
Land-based.................................................................. 676 ........... 710 .......... 764 ........... 798 .......... 585 ........... 585 ................ (0.03)............. (3.57)............. 3.42
Sea-based.................................................................... 220 ........... 222 .......... 214 ........... 212 .......... 211 ........... 221 ................. 4.90 .............. 1.06 . .......... (1.35)
North America.............................................................. 849 ........... 870 .......... 919 ........... 936 .......... 725 ........... 743 ................. 2.46 .............. 0.50 . ........... 5.36
Land-based.................................................................. 633 ........... 651 .......... 708 ........... 726 .......... 516 ........... 525 ................. 1.66 .............. 0.66 . ........... 8.62
Sea-based.................................................................... 216 ........... 219 .......... 211 ........... 210 .......... 209 ........... 218 ................. 4.44 .............. 0.13 . .......... (1.81)
Canada........................................................................... 37 ............. 51 ............ 49 ............. 64 ............ 60 ............. 52 .............. (12.98)........... (34.75).......... (29.98)
Land-based.................................................................... 35 ............. 50 ............ 47 ............. 63 ............ 60 ............. 51 .............. (14.66)........... (36.24).......... (30.44)
Sea-based........................................................................ 1 ............... 2 .............. 1 ............... 2 .............. 0 ............... 1 ............. 372.41 ........... (83.34).......... (82.22)

OCEANIA......................................................................... 47 ............. 46 ............ 40 ............. 40 ............ 26 ............. 33 ............... 30.09 ............ 43.49 . ........... 4.43
Land-based.................................................................... 45 ............. 45 ............ 38 ............. 39 ............ 25 ............. 33 ............... 31.95 ............ 57.56 . ........... 8.99
Sea-based........................................................................ 1 ............... 1 .............. 1 ............... 1 .............. 1 ............... 1 .............. (24.64)........... (74.34).......... (60.22)
Australia......................................................................... 39 ............. 40 ............ 33 ............. 34 ............ 21 ............. 27 ............... 32.78 ............ 79.84 . ......... 25.40
Land-based.................................................................... 39 ............. 39 ............ 32 ............. 33 ............ 20 ............. 27 ............... 34.15 ............ 85.52 . ......... 27.75
Sea-based........................................................................ 1 ............... 1 .............. 1 ............... 1 .............. 1 ............... 1 ................ (8.58)........... (24.05).......... (25.55)

EUROPE......................................................................... 330 ........... 348 .......... 319 ........... 342 .......... 315 ........... 295 ................ (6.40)........... (10.79)............ (7.75)
Land-based.................................................................. 179 ........... 183 .......... 162 ........... 181 .......... 153 ........... 141 ................ (7.96)........... (31.66).......... (27.75)
Sea-based.................................................................... 152 ........... 166 .......... 157 ........... 161 .......... 162 ........... 154 ................ (4.91)............ 24.03 . ......... 24.45
Italy................................................................................ 21 ............. 22 ............ 16 ............. 20 ............ 21 ............. 17 .............. (19.45)........... (18.67).......... (18.53)
Land-based.................................................................... 17 ............. 18 ............ 12 ............. 16 ............ 17 ............. 13 .............. (24.51)........... (28.03).......... (27.38)
Sea-based........................................................................ 4 ............... 4 .............. 4 ............... 4 .............. 4 ............... 4 ................. 1.35 ............ 35.34 . ......... 44.78
Germany......................................................................... 54 ............. 50 ............ 40 ............. 43 ............ 44 ............. 44 ................. 0.87 .............. 0.10 . ........ (17.34)
Land-based.................................................................... 22 ............. 21 ............ 11 ............. 13 ............ 13 ............. 12 ................ (9.23)........... (48.65).......... (60.72)
Sea-based...................................................................... 31 ............. 30 ............ 29 ............. 30 ............ 31 ............. 32 ................. 5.30 ............ 56.41 . ......... 50.65
United Kingdom........................................................... 122 ........... 131 .......... 132 ........... 134 .......... 109 ........... 103 ................ (5.39)............ 16.91 . ......... 21.73
Land-based.................................................................... 81 ............. 83 ............ 86 ............. 89 ............ 64 ............. 64 ................. 0.17 ............ 19.22 . ......... 19.02
Sea-based...................................................................... 41 ............. 48 ............ 46 ............. 44 ............ 45 ............. 39 .............. (13.35)............ 13.29 . ......... 26.13

MIDDLE EAST................................................................. 396 ........... 444 .......... 449 ........... 473 .......... 383 ........... 389 ................. 1.73 ............ 34.22 . ......... 26.65

UNIVERSITY OF ASIA & THE PACIFIC

Land-based.................................................................. 393 ........... 440 .......... 447 ........... 470 .......... 381 ........... 386 ................. 1.42 ............ 33.73 . ......... 26.55
Sea-based........................................................................ 2 ............... 4 .............. 2 ............... 3 .............. 2 ............... 3 ............... 52.90 .......... 125.78 . ......... 41.27
Kuwait............................................................................ 19 ............. 22 ............ 29 ............. 26 ............ 17 ............. 20 ............... 18.96 ............. (3.69).......... (14.26)
Land-based.................................................................... 19 ............. 22 ............ 29 ............. 26 ............ 17 ............. 20 ............... 19.31 ............. (5.29).......... (15.16)
Sea-based........................................................................ 0 ............... 0 .............. 0 ............... 0 .............. 0 ............... 0 ................. 1.52 ............ 67.50 . ......... 26.67
Saudi Arabia................................................................. 206 ........... 219 .......... 225 ........... 233 .......... 190 ........... 190 ................ (0.17)............ 37.44 . ......... 42.91
Land-based.................................................................. 205 ........... 218 .......... 224 ........... 232 .......... 189 ........... 189 ................ (0.15)............ 37.33 . ......... 43.03
Sea-based........................................................................ 0 ............... 1 .............. 1 ............... 0 .............. 0 ............... 0 .............. (12.54).......... 181.65 . .......... (5.60)

AFRICA.............................................................................. 2 ............... 2 .............. 1 ............... 2 .............. 2 ............... 2 ................ (6.81)........... (56.07).......... (47.90)
Land-based...................................................................... 1 ............... 1 .............. 1 ............... 2 .............. 2 ............... 1 .............. (18.12)........... (47.45).......... (26.44)
Sea-based........................................................................ 1 ............... 0 .............. 0 ............... 1 .............. 1 ............... 1 ............... 25.56 ........... (66.37).......... (68.86)

OTHERS.............................................................................. 0.................0................. 0.................0................. 0.................0....................*..................... *....................*

Land-based....................................................................... 0.................0................. 0.................0................. 0.................0....................*..................... *....................*
Sea-based......................................................................... 0.................0................. 0.................0................. 0.................0....................*..................... *....................*

TOTAL......................................................................... 1,953 ........ 2,079 ....... 2,080 ........ 2,173 ....... 1,799 ........ 1,796 ................ (0.20).............. 5.62 . ........... 5.77
Land-based............................................................... 1,517 ........ 1,618 ....... 1,634 ........ 1,722 ....... 1,350 ........ 1,341 ................ (0.61).............. 3.77 . ........... 4.34
Sea-based.................................................................... 436 ........... 461 .......... 446 ........... 451 .......... 450 ........... 454 ................. 1.02 ............ 11.51 . ......... 10.29

0 - less than 1 million $

Breakdown may not add up to totals due to rounding off
*Undefined: The divisor or the dividend is either zero or unavailable

Source: Bangko Sentral ng Pilipinas (BSP)

 10 T R E N D S
2014 2012
MARCH

II SELECTED INTERNATIONAL ECONOMIC INDICATORS

TABLE 1 SELECTED FOREIGN INTEREST RATES (%)
JUNE

Accounting period
2013 2014 Basis pts
indicators

Jul Aug Sep Oct Nov Dec Jan Feb change

United States........................................................................ 3.25 ......... 3.25 . ......... 3.25 .......... 3.25 . ........ 3.25 ........... 3.25 . ......... 3.25 . ........ 3.25 .......... -
economicindicators

Germany............................................................................... 0.50 ......... 0.50 . ......... 0.50 .......... 0.50 . ........ 0.33 ........... 0.25 . ......... 0.25 . ........ 0.25 .......... -
Japan.................................................................................... 1.48 ......... 1.48 . ......... 1.48 .......... 1.48 . ........ 1.48 ........... 1.48 . ......... 1.48 . ........ 1.48 .......... -
Hong Kong........................................................................... 5.00 ......... 5.00 . ......... 5.00 .......... 5.00 . ........ 5.00 ........... 5.00 . ......... 5.00 . ........ 5.00 .......... -
Switzerland........................................................................... 0.50 ......... 0.51 . ......... 0.50 .......... 0.50 . ........ 0.50 ........... 0.50 . ......... 0.50 . ........ 0.50 .......... -

LIBOR
Three months....................................................................... 0.27 ......... 0.26 . ......... 0.25 .......... 0.24 . ........ 0.24 ........... 0.24 . ......... 0.24 . ........ 0.24 ........ (0.30)
Six months............................................................................ 0.40 ......... 0.39 . ......... 0.38 .......... 0.36 . ........ 0.35 ........... 0.35 . ......... 0.34 . ........ 0.33 ........ (0.72)

SIBOR
Three months....................................................................... 0.41 ......... 0.41 . ......... 0.41 .......... 0.41 . ........ 0.41 ........... 0.41 . ......... 0.40 . ........ 0.40 ........ (0.24)
Six months............................................................................ 0.47 ......... 0.47 . ......... 0.47 .......... 0.47 . ........ 0.47 ........... 0.47 . ......... 0.48 . ........ 0.48 ........ (0.03)

Source: BSP
recenteconomic

TABLE 2 FOREIGN EXCHANGE RATES (currency units per US$)

Accounting period Growth (%)

2013 2014 Year-to-
Sep Oct Nov Dec Jan Feb Monthly Annual date

Japanese yen........................................................................ 99.16 ....... 97.81 . ....... 99.97 ...... 103.15 . .... 144.53 ....... 102.11 . ...... (29.35).......... 9.77 ....... 35.55
British pound sterling.............................................................. 0.63 ......... 0.62 . ......... 0.62 .......... 0.61 . ........ 0.61 ........... 0.60 . ........ (0.46)......... (6.32)........ (4.69)
Australian dollar...................................................................... 1.08 ......... 1.05 . ......... 1.07 .......... 1.11 . ........ 1.13 ........... 1.11 . ........ (1.04)........ 15.03 ....... 16.64
Hong Kong dollar................................................................... 7.75 ......... 7.75 . ......... 7.75 .......... 7.75 . ........ 7.76 ........... 7.76 . ......... 0.02 . ........ 0.04 ......... 0.05
Singapore dollar...................................................................... 1.26 ......... 1.24 . ......... 1.25 .......... 1.26 . ........ 1.27 ........... 1.27 . ........ (0.47).......... 2.22 ......... 2.91
New Taiwanese dollar........................................................... 29.65 ....... 29.38 . ....... 29.51 ........ 29.67 . ...... 30.12 ......... 30.30 . ......... 0.61 . ........ 2.27 ......... 1.96
Swiss franc.............................................................................. 0.92 ......... 0.93 . ......... 0.91 .......... 0.89 . ........ 0.90 ........... 0.89 . ........ (0.94)......... (2.76)........ (2.53)
Thai baht.............................................................................. 31.71 ....... 31.18 . ....... 31.59 ........ 32.25 . ...... 32.90 ......... 32.63 . ........ (0.79).......... 9.50 ......... 9.47
Malaysian ringgit.................................................................... 3.25 ......... 3.18 . ......... 3.19 .......... 3.24 . ........ 3.30 ........... 3.31 . ......... 0.35 . ........ 6.87 ......... 7.73
recent

European Monetary Union ..................................................... 0.75 ......... 0.73 . ......... 0.74 .......... 0.73 . ........ 0.73 ........... 0.73 . ........ (0.16)......... (2.12)........ (2.32)
Canadian dollar...................................................................... 1.04 ......... 1.04 . ......... 1.05 .......... 1.06 . ........ 1.09 ........... 1.11 . ......... 1.34 . ........ 9.71 ......... 9.87
Brunei dollar........................................................................... 1.27 ......... 1.25 . ......... 1.25 .......... 1.26 . ........ 1.28 ........... 1.27 . ........ (0.47).......... 2.21 ......... 2.90
S.Korean won.................................................................. 1,084.60 .. 1,066.10 . .. 1,061.57 ... 1,055.97 . . 1,064.96 .... 1,071.81 . ......... 0.64 . ....... (1.39)........ (0.70)
Indonesian rupiah.......................................................... 11,235.96 . 11,363.64 . 11,494.25 . 12,048.19 . 12,195.12 .. 11,904.76 . ........ (2.38)........ 22.62 ....... 24.71
Saudi rial................................................................................. 3.75 ......... 3.75 . ......... 3.75 .......... 3.75 . ........ 3.75 ........... 3.75 . ........ (0.00).......... 0.00 ......... 0.00

Source: BSP

III FISCAL SECTOR

TABLE 1 NATIONAL GOVERNMENT CASH OPERATIONS (P million)

Accounting period Growth (%)

2013 2014 Year-to-
Sep Oct Nov Dec Jan Feb Monthly Annual date

Revenues........................................................... 127,336 . ..... 134,309 ........ 164,996 ....... 150,228 ...... 148,822 ....... 120,286 ....... (19.17)............ 7.07 ......... 7.34
Tax..................................................................... 112,858 . ..... 124,688 ........ 155,334 ....... 121,226 ...... 134,864 ....... 106,871 ....... (20.76)............ 8.88 ....... 10.59
BIR....................................................................... 86,034 . ....... 95,587 ........ 126,462 ......... 96,659 ...... 104,151 ......... 78,378 ....... (24.75)............ 5.18 ......... 7.85
BoC..................................................................... 25,733 . ....... 27,863 .......... 28,254 ......... 23,796 ........ 29,773 ......... 27,416 ......... (7.92).......... 22.01 ....... 21.65
Others................................................................... 1,091 . ......... 1,238 ............... 618 .............. 771 ............. 940 ........... 1,077 ......... 14.57 . ........ (7.63)...... (14.06)
Nontax................................................................. 14,436 . ......... 9,611 ............ 9,662 ......... 28,819 ........ 13,938 ......... 13,371 ......... (4.07)........... (5.61)...... (14.91)

Expenditures...................................................... 145,952 . ..... 145,546 ........ 163,996 ....... 202,826 ...... 183,040 ....... 130,004 ....... (28.98)............ 4.76 ....... 11.01
Allotment to LGUs............................................... 25,812 . ....... 25,831 .......... 26,680 ......... 23,964 ........ 28,160 ......... 28,617 ........... 1.62 . ....... 10.26 ......... 9.27
Interest payments................................................ 29,214 . ....... 20,484 .......... 18,116 ......... 26,745 ........ 56,465 ......... 15,865 ....... (71.90)......... (11.47)........ (0.59)

Overall surplus (or deficit)................................... (18,616)........ (11,237)............. 1,000 ....... (52,598)....... (34,218).......... (9,718)........ (71.60)......... (17.29)....... 40.46

Source: Bureau of the Treasury (BTr)

T R E N D S 11

TABLE 2 NATIONAL GOVERNMENT OUTSTANDING DEBT (P million)

Accounting period Growth (%)
2013 2014 Year-to-
Sep Oct Nov Dec Jan Feb Monthly Annual date

Domestic debt............................................ 3,677,568 ...... 3,727,189 ..... 3,744,754 ..... 3,733,422 .... 3,620,441 . ... 3,644,286 . ............ 0.66 ........ 5.68 ........ 5.91
NG direct................................................... 3,677,126 ...... 3,726,747 ..... 3,744,312 ..... 3,732,980 .... 3,619,999 . ... 3,643,844 . ............ 0.66 ........ 5.74 ........ 5.97
Government securities.............................. 3,676,970 ...... 3,726,591 ..... 3,744,156 ..... 3,732,824 .... 3,619,843 . ... 3,643,688 . ............ 0.66 ........ 5.74 ........ 5.97
Agencies............................................................. 156 ................ 156 ............... 156 ............... 156 .............. 156 . ............. 156 . ................. - ......... - .............. -
Assumed.............................................................. 442 ................ 442 ............... 442 ............... 442 .............. 442 . ............. 442 . ................. - ..... (80.73)..... (80.73)

Foreign debt............................................... 1,932,097 ...... 1,921,369 ..... 1,930,494 ..... 1,947,731 .... 1,973,306 . ... 1,947,248 . .......... (1.32).......... 3.75 ........ 3.16
Direct............................................................ 709,508 ......... 704,747 ........ 699,400 ........ 699,852 ....... 719,517 . ...... 706,979 . .......... (1.74)......... (1.70)....... (1.86)
Agencies...................................................... 667,274 ......... 663,061 ........ 658,485 ........ 659,465 ....... 679,732 . ...... 668,000 . .......... (1.73)......... (0.83)....... (1.00)
Relent............................................................ 42,234 ........... 41,686 .......... 40,915 .......... 40,387 ......... 39,785 . ........ 38,979 . .......... (2.03)....... (14.63)..... (14.50)
Assumed.................................................................. 2 .................... 2 ................... 2 ................... - ................... - . .................. - . ................. - ... (100.00)... (100.00)
Foreign bonds............................................ 1,222,587 ...... 1,216,620 ..... 1,231,092 ..... 1,247,879 .... 1,253,789 . ... 1,240,269 . .......... (1.08).......... 7.13 ........ 6.27

Total........................................................... 5,609,665 ...... 5,648,558 ..... 5,675,248 ..... 5,681,153 .... 5,593,748 . ... 5,591,534 . .......... (0.04).......... 5.00 ........ 4.93

Source: BTr

IV MONETARY SECTOR
TABLE 1 MONETARY AGGREGATES ( P million)

Accounting period Growth (%)
2013 2014 Year-to-
Sep Oct Nov Dec Jan Feb Monthly Annual date

RESERVE MONEY........................................ 1,621,609 ...... 1,690,204 ..... 1,765,707 ..... 1,925,872 .... 1,829,767 . ... 1,808,690 . .......... (1.15)........ 36.88 ...... 34.02
SOURCES
Net foreign assets of the BSP................... 3,617,329 ...... 3,596,749 ..... 3,637,600 ..... 3,674,699 .... 3,586,402 . ... 3,578,148 . .......... (0.23).......... 5.76 ........ 4.83
Foreign assets....................................... 3,636,076 ...... 3,615,604 ..... 3,656,865 ..... 3,693,338 .... 3,605,611 . ... 3,597,222 . .......... (0.23).......... 5.79 ........ 4.87
Foreign liabilities............................................. 556 ................ 711 ............... 870 ................. 89 .............. 265 . ............. 411 . .......... 55.09 ...... 11.68 ...... 13.61
USES
Currency outside monetary authorities........ 633,892 ......... 672,152 ........ 680,320 ........ 797,452 ....... 701,440 . ...... 693,047 . .......... (1.20)........ 14.53 ...... 15.57
Liabilities to other depository corporations.. 987,364 ...... 1,017,696 ..... 1,084,946 ..... 1,127,972 .... 1,127,878 . ... 1,115,193 . .......... (1.12)........ 55.77 ...... 48.79
MONEY SUPPLY: MEASURE AND COMPONENTS
M1............................................................. 1,819,884 ...... 1,858,818 ..... 1,919,853 ..... 2,041,666 .... 2,041,065 . ... 2,007,837 . .......... (1.63)........ 26.39 ...... 28.61
Currency outside depository corporations... 519,891 ......... 550,265 ........ 562,220 ........ 639,143 ....... 578,593 . ...... 581,013 . ............ 0.42 ...... 15.62 ...... 16.58
Transferable deposits............................... 1,299,993 ...... 1,308,553 ..... 1,357,633 ..... 1,402,523 .... 1,462,472 . ... 1,426,824 . .......... (2.44)........ 31.38 ...... 34.16
M2............................................................. 6,073,556 ...... 6,119,038 ..... 6,568,121 ..... 6,800,061 .... 6,798,955 . ... 6,795,895 . .......... (0.05)........ 37.63 ...... 38.36
Savings deposits....................................... 2,675,296 ...... 2,664,753 ..... 2,823,621 ..... 2,914,573 .... 2,985,893 . ... 3,023,723 . ............ 1.27 ...... 36.10 ...... 35.94
Time deposits.......................................... 1,578,376 ...... 1,595,467 ..... 1,824,647 ..... 1,843,822 .... 1,771,997 . ... 1,764,335 . .......... (0.43)........ 56.45 ...... 54.78
M3............................................................. 6,167,602 ...... 6,217,041 ..... 6,665,877 ..... 6,896,988 .... 6,896,513 . ... 6,894,453 . .......... (0.03)........ 37.15 ...... 37.84
Securities other than shares.......................... 94,046 ........... 98,003 .......... 97,756 .......... 96,927 ......... 97,558 . ........ 98,558 . ............ 1.03 ...... 10.45 ........ 9.64
Money multiplier.................................................. 3.75 ............... 3.62 .............. 3.72 .............. 3.53 ............. 3.72 . ............ 3.76

Source: BSP

UNIVERSITY OF ASIA & THE PACIFIC

TABLE 2 LOANS OUTSTANDING OF UNIVERSAL AND COMMERCIAL BANKS (P million)

Accounting period Growth (%)
2013 2014 Year-to-
Sep Oct Nov Dec Jan Feb Monthly Annual date

TOTAL.............................................................. 3,153,241 .... 3,152,487 ... 3,239,133 .... 3,415,468 . ... 3,375,746 . .. 3,405,503 .............. 0.88 ...... 17.80 .... 16.99

Agriculture, hunting and forestry........................ 173,120 ....... 173,602 ...... 175,482 ....... 179,642 . ...... 181,234 . ..... 180,385 ............ (0.47)........ 13.39 .... 11.67
Fishing.................................................................... 8,287 ........... 8,681 .......... 9,379 ......... 10,187 . ........ 10,238 . ....... 10,748 .............. 4.98 ...... 39.62 .... 36.89
Mining and quarrying........................................... 18,219 ......... 18,316 ........ 19,477 ......... 18,155 . ........ 17,747 . ....... 19,947 ............ 12.40 ........ 9.74 .... 19.75
Manufacturing.................................................... 582,484 ....... 554,186 ...... 587,421 ....... 645,082 . ...... 613,177 . ..... 597,353 ............ (2.58)........ 11.30 .... 11.99
Electricity, gas, and water.................................... 344,209 ....... 359,532 ...... 381,926 ....... 378,397 . ...... 384,971 . ..... 396,553 .............. 3.01 ...... 34.75 .... 32.15
Construction......................................................... 71,107 ......... 73,126 ........ 75,383 ......... 81,314 . ........ 81,554 . ....... 84,321 .............. 3.39 ...... 41.60 .... 46.38
Wholesale and retail trade.................................. 498,068 ....... 509,147 ...... 520,058 ....... 554,746 . ...... 533,001 . ..... 536,359 .............. 0.63 ...... 18.85 .... 17.53
Transportation, storage & communication........... 227,608 ....... 225,331 ...... 231,108 ....... 231,942 . ...... 233,028 . ..... 238,555 .............. 2.37 ........ 2.44 .... (2.20)
Financial intermediation...................................... 295,450 ....... 298,006 ...... 290,735 ....... 323,141 . ...... 327,968 . ..... 331,047 .............. 0.94 ...... 14.47 .... 12.66
Real estate, renting and bus. services.................. 663,860 ....... 652,761 ...... 665,375 ....... 705,546 . ...... 676,647 . ..... 701,838 .............. 3.72 ...... 20.27 .... 18.79
Public administration and defense....................... 105,166 ....... 105,104 ...... 105,051 ....... 107,663 . ...... 107,528 . ..... 106,515 ............ (0.94)........ (1.72)..... (0.48)
Education............................................................. 11,802 ......... 11,899 ........ 12,061 ......... 14,697 . ........ 14,667 . ....... 14,562 ............ (0.72)........ 23.58 .... 23.75
Health and social work.......................................... 19,216 ......... 19,620 ........ 20,160 ......... 21,068 . ........ 21,229 . ....... 21,662 .............. 2.04 ...... 37.97 .... 38.58
Other community, social and personal services...... 78,180 ......... 85,721 ........ 88,457 ......... 87,456 . ...... 111,103 . ..... 100,740 ............ (9.33)........ 31.27 .... 38.84
Hotels and restaurants.......................................... 56,465 ......... 57,456 ........ 57,058 ......... 56,432 . ........ 61,653 . ....... 64,916 .............. 5.29 ...... 41.46 .... 42.42

Source: BSP
 12 T R E N D S
2014 2012
MARCH

TABLE 3 DOMESTIC INTEREST RATES (%)

Accounting period
2013 2014 Basis pts YTD
JUNE

Aug Sep Oct Nov Dec Jan Feb change average

indicators

TREASURY-BILL RATE....................................................... 0.82 ............ 0.94 ........... 0.12 ......... 0.12 .............. ni . ......... 0.87 .......... 1.46 . .......... 58.40 ........... 1.17
91 day......................................................................... 0.59 ............ 0.87 ................. - ......... 0.00 .............. ni . ......... 0.69 .......... 1.46 . .......... 76.50 ........... 1.08
182 day....................................................................... 0.90 ............ 0.92 ........... 0.09 ......... 0.00 .............. ni . ............. ni .............. ni . ............. - ................. -
economicindicators

364 day....................................................................... 0.93 ............ 0.96 ........... 0.19 ......... 0.28 .............. ni . ......... 1.08 .............. ni . ............. - ................ 1.08

MANILA REFERENCE RATE.............................................. 1.44 ............ 1.63 ........... 1.44 ......... 1.50 .......... 1.50 . ......... 1.25 .......... 1.25 . ............. - ................ 1.25
60 days........................................................................ 1.25 ............ 1.44 ........... 1.31 ......... 1.25 .......... 1.38 . ......... 1.13 .......... 1.06 . ........... (6.20)........... 1.09
90 days........................................................................ 1.88 ............ 2.19 ........... 1.94 ......... 1.81 .......... 2.06 . ......... 1.88 .......... 2.06 . .......... 18.80 ........... 1.97
180 days...................................................................... 2.31 ............ 2.50 ........... 1.94 ......... 2.44 .......... 2.81 . ......... 2.06 .......... 2.31 . .......... 25.00 ........... 2.19

Bank average lending rate............................................... 5.77 ............ 5.72 ........... 5.72 ......... 5.52 .......... 5.72 . ......... 5.65 .......... 5.19 . ......... (46.00)........... 5.42
Time-deposit rate (30-45 days)........................................ 1.04 ............ 1.18 ........... 1.07 ......... 1.22 .......... 1.03 . ......... 1.00 .......... 0.97 . ........... (2.90)........... 0.99
Savings-deposit rate........................................................ 0.72 ............ 0.67 ........... 0.71 ......... 0.62 .......... 0.65 . ......... 0.55 .......... 0.50 . ........... (4.80)........... 0.53
Interbank call-loan rate................................................... 2.04 ............ 2.00 ........... 2.01 ......... 2.02 .......... 2.01 . ......... 2.01 .......... 2.01 . ........... (0.10)........... 2.01

na - not available
ni - no issue
nt - no transactions

Source: BSP
recenteconomic

TABLE 4 TOTAL LOANS (GROSS), LOAN LOSS PROVISION AND NON-PERFORMING LOANS (P million, unless otherwise indicated)

Accounting period Growth (%)
2013 2014 Year-to-
Sep Oct Nov Dec Jan Feb Monthly Annual date

Total loans ............................................ 3,922,085 ...... 3,926,527 . .... 4,036,523 ...... 4,256,963 ..... 4,198,475 . .... 4,249,701 . ............. 1.22 ........ 18.47 ...... 17.40
Universal banks..................................... 2,877,124 ...... 2,859,444 . .... 2,947,560 ...... 3,200,610 ..... 3,144,783 . .... 3,121,870 . ........... (0.73).......... 23.76 ...... 24.33
Commercial banks................................... 202,105 ......... 196,090 . ....... 201,990 ......... 167,075 ........ 176,834 . ....... 172,985 . ........... (2.18).......... (3.47)....... (4.92)
Government banks.................................. 413,248 ......... 442,435 . ....... 458,433 ......... 446,749 ........ 464,353 . ....... 521,677 . ........... 12.34 ........ 25.93 ...... 18.47
Foreign banks.......................................... 429,608 ......... 428,559 . ....... 428,540 ......... 442,529 ........ 412,505 . ....... 433,169 . ............. 5.01 ........ (8.06)..... (11.48)
Non-performing loans . ............................ 100,638 ......... 100,356 . ......... 96,146 ........... 90,509 .......... 91,865 . ......... 94,239 . ............. 2.58 ........ (5.73)....... (7.86)
Universal banks.......................................... 73,242 ........... 72,853 . ......... 69,430 ........... 66,775 .......... 67,214 . ......... 69,089 . ............. 2.79 ........ (6.57)....... (9.17)
Commercial banks....................................... 9,766 ............. 9,604 . ........... 9,514 ............. 7,952 ............ 8,304 . ........... 8,240 . ........... (0.77).......... (8.83)....... (8.94)
Government banks.................................... 14,966 ........... 15,163 . ......... 14,416 ........... 12,959 .......... 13,331 . ......... 13,598 . ............. 2.00 ........ (3.09)....... (2.63)
recent

Foreign banks.............................................. 2,663 ............. 2,736 . ........... 2,787 ............. 2,823 ............ 3,015 . ........... 3,313 . ............. 9.88 ........ 12.46 ........ 7.27
Loan loss provision . ................................. 131,338 ......... 130,993 . ....... 127,153 ......... 130,440 ........ 130,652 . ....... 130,245 . ........... (0.31)............ 2.60 ........ 1.60
Universal banks.......................................... 94,852 ........... 94,380 . ......... 90,734 ........... 95,520 .......... 95,934 . ......... 95,710 . ........... (0.23)............ 3.89 ........ 2.56
Commercial banks....................................... 8,569 ............. 8,569 . ........... 8,565 ............. 7,825 ............ 7,480 . ........... 7,546 . ............. 0.88 ...... (10.78)..... (11.88)
Government banks.................................... 18,490 ........... 18,418 . ......... 17,983 ........... 17,396 .......... 17,452 . ......... 17,527 . ............. 0.43 .......... 3.65 ........ 3.63
Foreign banks.............................................. 9,428 ............. 9,626 . ........... 9,871 ............. 9,699 ............ 9,785 . ........... 9,463 . ........... (3.29)............ 0.13 ........ 0.60

NPL/Total loans (%)......................................... 2.57 ............... 2.56 . ............. 2.38 ............... 2.13 .............. 2.19 . ............. 2.22
Universal banks.............................................. 2.55 ............... 2.55 . ............. 2.36 ............... 2.09 .............. 2.14 . ............. 2.21
Commercial banks......................................... 4.83 ............... 4.90 . ............. 4.71 ............... 4.76 .............. 4.70 . ............. 4.76
Government banks........................................ 3.62 ............... 3.43 . ............. 3.14 ............... 2.90 .............. 2.87 . ............. 2.61
Foreign banks................................................ 0.62 ............... 0.64 . ............. 0.65 ............... 0.64 .............. 0.73 . ............. 0.76

Source: BSP

RECENT ECONOMIC INDICATORS is published monthly by the School of Economics of the University of Asia
and the Pacific. The views expressed in this publication are solely the responsibilities of the authors and do not
represent any position held by the university. These papers may not be reproduced or distributed in full or in part
without prior written authorization. • Editing Karen Atienza • Research and Layout Glenda P. Hitosis • Design
Art & Copy Communication Design Inc. • Printing Inkwell Publishing Co., Inc.

UNIVERSITY OF ASIA AND THE PACIFIC formerly the Center for Research and Communication • Pearl Drive,
Ortigas Complex, Pasig City, Metro Manila, the Philippines 1605 * Telephone: 637-0912 to 26 • School of
Economics * Telephone: 637-0912 to 15 Loc. 253, 376; Telefax: 632-7968.