Cebu as the new industrializing economy in Asia By Perry Fajardo, Executive Director, Cebu Business Club

1. The Broad Strokes
of the Philippine Economy and the
Cebu-Central Visayas Region
Perry Fajardo
Fifth Annual Economic Briefing and Investment Forum
City Sports Club of Cebu, Cebu Business Park
Cebu City, Philippines 6000
September 18, 2015

2. Presentation Outline
• The National Economy
• The long past
• The last five years
• The last two quarters
• Cebu and the Central Visayas Region
• Global Outlook
• Philippine Outlook
• Conclusion

3. The National Economy

4. Failure of policy to shift from early
success in import substitution into export
industrialization and poor governance in general ,
characterized by high level of corruption from the top
down to the local level, constrained the country from
sustaining its rapid economic growth and advantage
over its neighbors that it enjoyed in the first
decade and a half after the last war.

5. 6.3
7.6
10.8
6.2
8.9
7.5
6.97.0
5.4
3.5
6.8
1.4
5.6
4.8
7.1
3.4
5.3
4.4
5.3
4.94.7
3.8
5.45.4
8.9
3.6
5.6
8.8
5.6
5.2
5.6
5.1
3.43.6
1.9
-7.3 -7.3
3.4
4.3
6.8
6.2
3.0
-0.6
0.3
2.1
4.44.7
5.8
5.2
-0.6
3.1
4.4
2.9
3.6
5.0
6.7
4.8
5.2
6.6
4.2
1.1
7.6
3.7
6.7
7.1
6.1
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0 Philippine Annual GDP Growth (In%)
1949-2014 (Based on NSCB data)

6. Annual Economic (GDP) Growth
(Under 6 Philippine Presidents)
Marcos 1 Marcos 2 C. Aquino F. Ramos J. Estrada G. Arroyo B. Aquino III
1965 5.3 1976 8.8 1986 3.4 1992 0.3 1998 -0.6 2001 1.8 2010 7.6
1966 4.4 1977 5.6 1987 4.3 1993 2.1 1999 3.4 2002 4.4 2011 3.7
1967 5.3 1978 5.2 1988 6.8 1994 4.4 2000 6.0 2003 4.9 2012 6.8
1968 4.9 1979 5.6 1989 6.2 1995 4.7 2004 6.4 2013 7.2
1969 4.7 1980 5.1 1990 3.0 1996 5.9 2005 5.0 2014 6.1
1970 3.8 1981 3.4 1991 -0.6 1997 5.2 2006 5.4 2015
1971 5.4 1982 3.6 1992 0.3 1998 -0.6 2007 7.2 2016
1972 5.4 1983 1.9 2008 4.6
1973 8.9 1984 -7.3 2009 1.1
1974 3.6 1985 -7.3 2010 7.6
1975 5.6
Ave. 5.2 Ave. 2.5 Ave. 3.3 Ave. 3.1 Ave. 2.9 Ave. 4.8 Ave. 6.3

7. Philippine 2014 Global Ranking
• Many decades of sluggish
economic growth, coupled
with relatively faster
population growth put the
country behind its neighbor
which did better in both
counts.

8. Population, GDP and GDP Per Capita, and GDP Per Capita Ratio, 2014
Country
Population
(In 000)
Nominal GDP
(In M US$)
GDP (PPP) Per
Capita (In US$)
Nominal GDP Per
Capita (In US$)
GDP Per Capita
Ratio (RP=1.00)
1. China 1,372,100 10,380,380 (2) 12,880 (89) 7,589 (79) 2.65
2. India 1,277,190 2,049,501 (9) 5,855 (125) 1,627 (143) 0.57
3. US 321,833 17,418,925 (1) 54,597 (10) 54,597 (10) 19.1
4. Indonesia 255,462 888,648 (16) 10,641 (102) 3,534 (118) 1.23
10. Japan 126,865 4,616,335 (03) 37,390 (28) 36,332 (26) 12.70
12. Philippines 102,058 284,927 (39) 6,962 (119) 2,865 (129) 1.00
14. Vietnam 91,583 186,049 (55) 5,635 (126) 2,053 (134) 0.72
21. Thailand 65,104 373,804 (32) 14,354 (81) 5,445 (95) 1.90
27. South Korea 51,465 1,416,949 (13) 35,277 (30) 28,101 (30) 9.81
43. Malaysia 30,707 326,933 (35) 24,654 (50) 10,804 (64) 3.77
102. Hong Kong 7,299 289,628 54,722 39,871 13.92
114. Singapore 5,470 308,051 (36) 82,762 (3) 56,319 (9) 19.66

9. Failure to industrialize
condemned the Filipino workers to engaged in low
paying activities in agriculture in the rural areas and
services in the urban areas or to
work/migrate abroad.

10. GDP by Sector in Percent, 1960-2013
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
Agriculture Industry Services

11. Employment by Sector in Percent, 1980-2012
0
10
20
30
40
50
60
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Agriculture Industry Services

12. Industry has higher per capita output than
the rest of the economy
Sector
Percent Share of
Output 2012
Percent Share of
Employment
2012
Productivity
Index 2012
Agriculture 11.8 32.2 0.37
Industry 31.2 15.4 2.03
Services 56.9 51.4 1.11
Total 100.00 100.00 1.00

13. Not a miracle yet
but the Philippine economy surged in the last five
years under the “Daang Matuwid” banner of the
Aquino government

14. GROWTH RATES IN GROSS DOMESTIC PRODUCT BY INDUSTRY AND TYPE OF EXPENDITURE
2009 – 2014 (AT CONSTANT 2000 PRICES)
Now led by industry from the production side
ANNUAL GROWTH RATES
BY INDUSTRY ORIGIN 2009-10 2010-11 2011-12 2012-13 2013-14
Average
2010-14
1. AGRICULTURE -0.2 2.6 2.8 1.1 1.6 1.58
2. INDUSTRY SECTOR 11.6 1.9 7.3 9.2 7.9 7.58
a. Mining & Quarrying 11.4 7 2.2 1.2 4.9 7.13
b. Manufacturing 11.2 4.7 5.4 10.3 8.3 5.85
c. Construction 14.3 -9.6 18.2 10.3 9.9 8.32
d. Electricity, Gas and Water
Supply
9.9 0.6 5.3 3.6 2.8 3.55
3. SERVICE SECTOR 7.2 4.9 7.1 7.0 5.9 6.42
GROSS DOMESTIC PRODUCT 7.6 3.7 6.7 7.1 6.1 6.24

15. GROWTH RATES IN GROSS DOMESTIC PRODUCT BY INDUSTRY AND TYPE OF EXPENDITURE
2009 – 2014 (AT CONSTANT 2000 PRICES)
Led by investment or capital formation from demand side
ANNUAL GROWTH RATES
BY TYPE OF EXPENDITURE 09-10 10-11 11-12 12-13 13-14
Average
2010-14
1. Household Final Consumption
Expenditure 3.4 5.6 6.6 5.6 5.4 5.32
2. Government Final Consumption
Expenditure 4.0 2.1 15.5 5.0 1.7 5.66
3. Capital Formation 31.6 2.8 -4.3 27.7 5.4 12.64
4. Plus Exports 21.0 -2.5 8.6 -1.0 11.3 7.48
5. Less Imports 22.5 -0.6 5.6 4.4 8.7 8.12
GROSS DOMESTIC PRODUCT 7.6 3.7 6.7 7.1 6.1 6.24

16. INDICATORS DERIVED FROM THE NATIONAL ACCOUNTS
BASE YEAR: 2000
2010 2011 2012 2013 2014
1. Labor Productivity (in pesos, constant)
Total 158,182 158,914 167,596 178,023 187,988
Growth Rate 4.7 0.5 5.5 6.2 5.6
Labor Productivity Total (GVA/total number
of hours worked, in pesos, constant)* 72.8 74.3 78.7 78.2 84.7
2. Fixed Capital Formation/GDP (in %, current) 20.5 18.7 19.6 20.5 20.8
3. Total Exports (in million, current)
US $ (FOB) 69,485 71,801 77,057 76,697 81,667
Share to GDP (in percent) 34.8 32.0 30.8 28.0 28.7
4. Total Imports (in million, current)
US $ (CIF) 73,167 79,948 85,266 88,050 92,295
Share to GDP (in percent) 36.6 35.7 34.1 32.2 32.4
(Exports-Imports)/GDP (in percent, current) -1.8 -3.6 -3.3 -4.2 -3.7
(Exports+Imports)/GDP (in percent, current) 71.4 67.7 64.9 60.2 61.1
5. National Government Debt Service (in M PhP) 689,799 722,750 729,774 758,160 532,838
Debt Service/GDP 7.7 7.4 6.9 6.6 4.2

17. Latest Economic Performance: First half 2015
• For the first semester of 2015, GDP
grew by 5.3 percent from 6.2 percent in
the previous period. GDP grew year-on-
year by 5.6 percent in the second
quarter of 2015.
• In production, the second quarter
growth was driven by the Services
sector with the positive growth
exhibited by Trade, Other Services Real
Estate, Renting & Business Activities,
and supported by the growth of
Manufacturing and Construction.
• In demand, growth was led by capital
formation or investment.

18. GROSS DOMESTIC PRODUCT BY INDUSTRY:
2nd Quarter 2014 and 2nd Quarter 2015
AT CONSTANT 2000 PRICES, IN MILLION PESOS
INDUSTRY/INDUSTRY GROUP Q2 2014 Q2 2015
Growth Rate
(%)
Agriculture 167,048 166,133 -0.5
Industry 614,797 652,594 6.1
Services 1,050,348 1,115,233 6.2
GROSS DOMESTIC PRODUCT 1,832,193 1,933,961 5.6
Net Primary Income 364,294 372,332
GROSS NATIONAL INCOME 2,196,487 2,306,293 5

19. GROSS DOMESTIC PRODUCT BY TYPE OF EXPENDITURE:
2nd Quarter 2014 and 2nd Quarter 2015
AT CONSTANT 2000 PRICES, IN MILLION PESOS
TYPE OF EXPENDITURE Q2 2014 Q2 2015
Growth Rate
(%)
1. Household Final Consumption Expenditure 1,213,137 1,288,074 6.2
2. Government Final Consumption Expenditure 216,265 224,704 3.9
3. Capital Formation 330,285 387,755 17.4
4. Exports 887,453 920,041 3.7
A. Exports of Goods 714,658 693,545 -3.0
B. Exports of Services 172,795 226,496 31.1
5. Less : Imports 803,283 905,027 12.7
A. Imports of Goods 652,546 714,579 9.5
B. Imports of Services 150,737 190,448 26.3
6. Statistical Discrepancy -11,663 18,414
GROSS DOMESTIC PRODUCT 1,832,193 1,933,961 5.6

20. Cebu and Central Visayas

21. With 5,000 sq. km. in land area,
Cebu is 4.8 times bigger than Hong Kong and
7.4 times bigger than Singapore.
Like the two city states,
Cebu is also strategically located.
It has a good seaport and airport.
A new airport terminal is under construction and a
new container port is planned to be
constructed soon.

22. Cebu too is not far behind
Singapore and Hong Kong in population.
Growing at 2.2% annually,
Cebu’s population is estimated at 4.5 million this year
and will reach 5.2 million by 2020.
In 2014, the population of
Singapore was placed at 5.52 million and
Hong Kong, 7.26 million.

23. Land Area, Population and Annual Growth Rate
City/
Municipality
Total Land Area
(Surface Area
in Sq. Km.)
Total Population
Annual Growth
Rate (In %)
Estimated
Population
May 1, 2010 2000-2010 2015
Metro Cebu 1,053.2 2,551,009 2.83 2,932,993
1. Lapu-Lapu City 60.3 350,467 4.91 445,381
2. Mandaue City 28.9 331,320 2.46 374,127
3. Cebu City 300.5 866,171 1.88 950,711
4. Other 10 LGUs 663.5 1,003,051 3.18 1,173,007
Rest of Cebu 4,019.1 1,616,311 1.25 1,719,887
Total Cebu 5.072.3 4,167,320 2.19 4,644,070
Region VII 6,800,180 1.77 7,294,567
Metro Manila 11,855,975 1.78 12,949,396
Philippines 300,000.0 92,337,852 1.9 101,449,681

24. Unlike the rest of the Philippines,
up to 80% of the workers in Cebu and more than 90%
in Metro Cebu are already employed in industry and
service activities, away from agriculture which in the
country still engaged a third of the workforce.

25. Employment Structure, 2010
(Percent distribution of gainful workers 5 years old and over by major
kind of business or industry)
Business Activity/Industry
Metro
Cebu
Cebu Region 7 NCR PHIL
Total 100.00 100.00 100.00 100.00 100.00
Agriculture 7.23 20.62 32.13 0.55 32.02
Industry 29.11 25.51 19.87 18.73 15.91
Mining & Quarrying 0.40 0.50 0.39 0.37 0.57
Manufacturing 17.48 13.75 9.90 8.39 6.97
Electricity, Gas & Water 0.56 0.49 0.44 0.47 0.36
Construction 10.68 10.79 9.14 9.51 8.02
Services 63.20 53.51 47.64 77.84 50.90
Not Reported 0.45 0.36 0.36 2.88 1.17

26. While the Philippines is now closing
in on China in GDP growth, Cebu today is even doing
much better.
With Cebu, the GDP of the Central Visayas Region
grew in average by 9.0% in the last five years. This was
1.4 times faster than the whole country and fastest
among 17 regions.

27. GRDP Growth Rates, 2010 to 2014 (at constant 2000 prices)
REGION / YEAR 2009-10 2010-11 2011-12 2012-13 2013-14
Average
2010-14
Growth
Elasticity
PHILIPPINES 7.6 3.6 6.8 7.1 6.1 6.2 1.00
NCR METRO MANILA 7.6 3.1 7.0 9.2 5.9 6.6 1.05
CAR CORDILLERA 6.3 1.3 1.0 5.4 3.2 3.4 0.55
I ILOCOS 7.1 2.4 5.2 6.8 5.7 5.4 0.87
II CAGAYAN VALLEY (1.1) 5.6 8.1 6.2 6.4 5.0 0.81
III CENTRAL LUZON 10.7 7.1 6.5 4.4 9.0 7.5 1.21
IVA CALABARZON 11.1 1.7 7.3 6.7 5.1 6.4 1.02
IVB MIMAROPA 1.1 3.1 4.8 1.3 6.5 3.4 0.54
V BICOL 5.2 1.9 6.9 8.1 4.2 5.3 0.84
VI WESTERN VISAYAS 3.7 6.2 7.7 3.4 4.9 5.2 0.83
VII CENTRAL VISAYAS 12.5 6.8 9.4 7.4 8.8 9.0 1.44
VIII EASTERN VISAYAS 2.0 2.1 (6.4) 4.5 (2.3) 0.0 0.00
IX ZAMBO PENINSULA 3.6 0.1 12.9 4.1 6.5 5.4 0.87
X NORTHMINDANAO 6.9 5.8 7.2 5.3 7.2 6.5 1.04
XI DAVAO REGION 5.0 3.7 7.4 6.7 9.4 6.4 1.03
XII SOCCSKSARGEN 2.0 5.3 8.0 8.4 6.4 6.0 0.96
XIII CARAGA 7.4 8.5 10.7 8.1 7.8 8.5 1.36
ARMM MUSLIM MINDANAO 2.3 (0.3) 1.1 3.8 3.0 2.0 0.32

28. From only 6.0% of the country in 2010,
the Central Visayas GRDP has increased to 6.5% in
2014, the fourth biggest after Metro Manila,
Calabarzon, and Central Luzon.
Basing on population alone, Cebu contributes
up to 2/3 of the CV GRDP which is more actually if we
consider that Cebu has relatively more workers in
highly productive industrial activities and high level
service activities than the rest of the region.

29. Gross Regional Domestic Product, 2010 to 2014
Percent Share by Region, in Percent (at constant 2000 prices)
REGION / YEAR 2010 2011 2012 2013 2014
PHILIPPINES 100.0 100.0 100.0 100.0 100.0
NCR METRO MANILA 35.7 35.6 35.7 36.4 36.3
CAR CORDILLERA 2.1 2.1 1.9 1.8 1.8
I ILOCOS 3.2 3.1 3.1 3.1 3.1
II CAGAYAN VALLEY 1.8 1.8 1.8 1.8 1.8
III CENTRAL LUZON 9.0 9.3 9.3 9.1 9.3
IVA CALABARZON 17.7 17.4 17.4 17.3 17.2
IVB MIMAROPA 1.8 1.8 1.7 1.6 1.6
V BICOL 2.0 2.0 2.0 2.0 2.0
VI WESTERN VISAYAS 4.0 4.1 4.1 4.0 3.9
VII CENTRAL VISAYAS 6.0 6.2 6.3 6.3 6.5
VIII EASTERN VISAYAS 2.6 2.6 2.3 2.2 2.0
IX ZAMBO PENINSULA 2.1 2.0 2.1 2.0 2.0
X NORTH MINDANAO 3.7 3.8 3.8 3.7 3.7
XI DAVAO REGION 3.8 3.8 3.8 3.8 3.9
XII SOCCSKSARGEN 2.7 2.7 2.7 2.7 2.8
XIII CARAGA 1.1 1.2 1.2 1.3 1.3
ARMM MUSLIM MINDANAO 0.8 0.8 0.8 0.7 0.7

30. Central Visayas, and Cebu for that matter,
is now fast modernizing with its industry growing at
13.4% in the last five years consistent with the
experience of Asia’s NICs when
they were still emerging.

31. Central Visayas Gross Regional Domestic Product
Annual Growth Rate, 2010-2014
INDUSTRY/YEAR 2009-10 2010-11 2011-12 2012-13 2013-14
Average
2010-14
I. AGRICULTURE 0.9 3.7 -0.6 0.3 (2.6) 0.34
II INDUSTRY SECTOR 22.1 9.3 12.0 9.5 13.9 13.36
a. Mining & Quarrying 30.8 13.0 6.5 (1.7) 20.2 13.76
b. Manufacturing 28.2 7.9 6.3 14.0 10.0 13.28
c. Construction 10.6 13.8 27.5 2.2 24.7 15.76
d. Electricity, Gas and
Water Supply
9.2
4.6 7.8 3.8 1.4 5.36
III SERVICE SECTOR 8.8 5.7 9.1 6.9 6.6 7.42
GROSS DOMESTIC
PRODUCT 12.5 6.8 9.4 7.4 8.8 8.98

32. Nearing PhP1.0 trillion (at current prices),
the Central Visayas GRDP, about a third of which is
from Cebu, are now derived less from agriculture
(6.0%) and more from industry (39.0%), and services
(55%) which is in line with the output structure of
Asia’s NICs. Nationally, the proportion is 10.0% in
agriculture and 33.0% and 57.0%, respectively, in
industry and services.

33. Gross Regional Domestic Product, Percent Distribution by Sector, 2014
In thousand PhP at current and constant 2000 Prices
INDUSTRY/YEAR
2014
(At Current Price)
2014
(At 2000 Prices)
Percent Distribution
I. AGRICULTURE 56,386,577 27,822,307 5.99
II INDUSTRY SECTOR 309,877,143 183,241,418 39.43
a. Mining and Quarrying 7,662,574 4,141,653 0.89
b. Manufacturing 178,411,071 114,612,411 24.66
c. Construction 110,292,854 56,482,444 12.15
d. Electricity, Gas and Water 13,510,643 8,004,909 1.72
III SERVICE SECTOR 465,569,555 253,682,749 54.59
GROSS DOMESTIC PRODUCT 831,833,275 464,746,474 100.00

34. Board of Investments (BOI) approved investments
going to Central Visayas are more attracted to locate
in Cebu as shown by data on investment projects
approved by the BOI which amount to PhP1.47 billion
out of PhP1.57 billion from 2010 to 2013 with 11.2
thousand jobs also being generated.

35. BOI APPROVED NEW INVESTMENTS IN CEBU AND
REGION VII, 2010-2013
New Investment/
Employment
2010 2011 2012 2013
Total
2010-13
Cebu
New Investment
($000)
44,554 280,397 1,027,440 118,604 1,470,995
Employment 2,063 4,110 1,983 3,056 11,212
Region VII
New Investment
($000)
45,315 280,397 1,063,653 186,565 1,575,930

36. Cebu has six fully operational
Export Processing/Economic Zones.
They now has a total of 278 locators with P13.8 B in
investments, with 117 thousand jobs created and
$3.6B in annual export sales.

37. EPZA APPROVED INVESTMENTS IN CEBU
Name
Investment
(PHP mil.)
Number of
Locators
Number of
Employees
Export Sales
(In M US$)
MEZ 1 2,980 158 60,739 2.213
MEZ 2 770 54 15,620 308
CLIP 367 35 1.957 24
WCIP 8,478 20 16,662 692
MRI Ecozone 1.048 7 20,814 285
New Cebu
Township 141 4 859 27

38. Business Process Outsourcing
• Cebu also host several EPZA approved IT Parks/Building.
• In 2012, four of these I.T. Park had 139 locators (BPOs) with about 95 thousand
employed workers.
• Cebu is now in the top ten of the Tholons’s list of 100 Emerged Global
Outsourcing Cities.
• Being in the top ten means that Cebu is now meets the stringent requirements
BPO investors in IT infrastructure and connectivity, social services, manpower
pool, cost of operation, government regulation and commercial risk.
• The Cebu City IT-BPO roadmap aims to generate U.S. 2.4 billion in total
revenues and around 150,000 employees by 2017.
• The challenge for Cebu is to get at least 20% of the national BPO and KPO
market.

39. Cebu is also a favorite
tourism destination in the Philippines.
Total tourist arrival grew by 11.1 % annually from
1.25 million in 2006 to 2.6 million in 2013 with foreign
visitors rising much faster at 13.5% annually
in the same period.
Total tourist arrival, both domestic
and foreign, again went up by 16.4 percent
to 3.0 million in 2014.

40. Tourist Arrival
474,720
602,002 649,599 625,098
708,400
833,441
997,303
1,152,821
772,767
890,264
946,639
993,172
1,059,834
1,088,797
1,222,035
1,439,247
1,247,487
1,492,266
1,596,238
1,618,270
1,768,234
1,922,238
2,230,323
2,598,250
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
2006 2007 2008 2009 2010 2011 2012 2013
Foreign Domestic Total
AGR 2006-2013 (%)
Foreign = 13.5
Domestic = 9.3
Total = 11.1

41. Total foreign trade in Cebu
reached $8.84 B in 2014 with exports
valued at $5.36 B and imports at $3.48 with a
favorable trade balance of $1.88 B.

42. Up to 90% of Region VII Export is from Cebu
Indicator
Value of Exports and Imports
(FOB in Million US Dollars)
Percent Increase/
(Decrease)
2012 2013 2014 2012-2013 2013-2014
TOTAL
Exports
Imports
BALANCE OF TRADE
7,085.9
4,334.3
2,751.6
1,582.7
6,534.1
3,877.2
2,656.9
1,220.3
8,844.6
5,364.6
3,480.0
(7.8)
(10.5)
(3.4)
35.4
38.4
31.0

43. No doubt, the Philippines is now
emerging new NIC in Asia with GDP growth second
only to the slowing China with Cebu and Central
Visayas playing a major role.

44. Global Outlook

45. • Global GDP forecasts
anticipate gradual
strengthening in 2015
and 2016.
• Global GDP forecasts
by leading
organizations range
between 2.8% and
3.8% for 2015, with
slightly better growth
rates in 2016.
- McKinsey: The Outlook for
Global Growth in 2015

46. • Indicators show steadiest
improvement in developed
economies.
• Advanced economies
continued to improve in
January, while Brazil and
Russia weakened.
- McKinsey: The Outlook for
Global Growth in 2015

48. IMF WEO, July 2015 Update
Real GDP Actual Projection
2013 2014 2015 2016
World 3.4 3.4 3.3/3.5 3.8/3.7
Advanced Economies 1.4 1.8 2.1 2.4
United States 2.2 2.4 2.5 3.0
Euro area -0.4 0.8 1.5 1.7
Japan 1.6 -0.1 0.8 1.2
Emerging Market Developing
Economies
5.0 4.6 4.2 4.7
Emerging Developing Asia 7.0 6.8 6.6 6.4
China 7.7 7.4 6.8 6.3
India 6.9 7.3 7.5 7.5
Asian 5 5.1 4.6 4.7 5.1
Philippines 7.2 6.1 6.7 6.3

49. Latest IMF GDP Forecast (for Oct. 2015 update)
Real GDP
2014 2015 2016
World 3.3 3.0/3.3 3.6/3.8
United States 2.4 2.4 2.6
Euro area 0.9 1.6 1.9
Japan -0.1 0.6 1.2
Germany 1.6 1.6 2.0
France 0.2 1.0 1.4
Italy -0.4 0.7 1.3
United Kingdom 3.0 2.4 2.3
Canada 2.4 1.1 2.1
China 7.4 6.7 6.5
India 7.2 7.2 7.3
Brazil 0.2 -2.8 -0.7
Rest of the world 2.8 2.3 3.3

52. Philippine Outlook

53. Despite the inability of the global economy
to return to its pre-Great Recession growth path, the
Philippine economy still managed to grow at twice the
global rate and at its more rapid rate than in the past.
Can we still sustain this in the next five years?
The answer depends on the headwind that are
brewing up globally and locally and
how we respond to them.

54. Global headwinds
• The uneven global growth among regions and among
countries within regions and the divergent economic
policies applied by the different countries of the world that
run counter to each other (Quantitative easing, Yuan
devaluation, etc.)
• The steep decline in the price of oil and commodities which
while beneficial to importing countries are destructive to
the producers.
• Geopolitical reasons to include not only the events in the
Middle East with the rise of the ISIS but also the boiling
water of the South and East China Sea.

55. Local headwinds:
• Weak infrastructure that may dampen the enthusiasm of
investors to bet on the gains that the present administration
has so far achieved in the field of doing business and other
measures of good governance.
• Failure of the government to do its part in spending its
budget on time which is show to have contributed to the
growth slowdown last year and this year, including failing to
use the ODA on time.
• The forthcoming election which may again change our
priorities and the way we tackle our national development
priorities.

56. Can we overcome this headwinds?
• Part of the answer is in the next election. What kind of leaders are we
going to elect? Are they up to the challenges that are facing today and
in the future?
• Another answer lies on the strength of the financial market since much
of the disturbance coming from outside or inside are first translated
and felt in our finance sector. How resilient and strong are our banks to
resist the volatility in the market?
• But the final answer depends so much on how we respond to these
challenges and how good we are at taking advantage of the many
opportunities that are now opened with the ASEAN Economic
Integration and those that are still to come with the APEC.

57. Conclusion
?
Thank you.