Credit Management September 2023

COUNTRY FOCUS
AUTHOR – Adam Bernstein
economies in 2022… in a challenging external
environment.” According to Trading Economics,
the inflation rate in May was 6.1 percent,
down from 6.6 percent in April, while the
unemployment rate over the same period fell
from 4.7 to 4.5 percent.
Main sectors of industry – Agriculture
Part of the Philippines' economy is based on
food processing. The PSA reported that the
agricultural sector in Q1 2023 contributed to 8.9
percent of GDP and employed 24 percent of the
labour force.
In terms of produce, the PSA details palay,
livestock, poultry and egg production, corn,
coconut including copra, other animal
production, and mango as all growing in
importance. Beyond that is rice production
and which accounts for 2.5 percent of world
production. However, sugarcane including
muscovado sugar-making, pineapple, forestry
and logging, rubber and cacao all fell in
production volumes over the same period in
2022. But even though sugar volumes fell, the
country is still one of the largest producers in
the world with nearly a million acres under
cultivation.
A report from Lloyds Bank – from June 2023
– notes that the Philippines’ agricultural sector
suffers from low productivity, weak economies
of scale and inadequate infrastructure. It added:
“The government is working on restructuring
and modernising the sector, and have been
implementing policies such as converting
government lands to agriculture use.”
Mining
As for mining, the Philippines is one of the
richest countries of the world in terms of
minerals.
A January 2023 report from Chambers and
Partners noted that the country is “the fifth
most mineralised country in the world, with an
estimated $1tn in untapped reserves of copper,
gold, nickel, zinc and silver.” Recent statistics
from the Philippine Mines and Geosciences
Bureau indicate that there are only 49 operating
metallic mines, employing around 196,000
workers. However, in the first third of 2022,
total exports of minerals amounted to almost
$3,851bn, and the Philippine Department of
Environment and Natural Resources placed the
gross production value for large-scale metallic
mining at PHP 101.1bn.
Industry
The industrial sector contributed 29.9 percent of
GDP in Q1 2023, down from 30.6 percent in the
same period in 2022 (PSA). Lloyds data suggests
that it employed 19.1 percent of the workforce
with industrial food processing being one of the
Philippines' main manufacturing activities.
Other sectors to note are production of cement,
glass, chemicals products and fertilisers,
iron, steel and refined oil products.
Philippines
Manila, the capital of the Philippines, is a densely populated bayside
city on the island of Luzon, which mixes Spanish colonial architecture
with modern skyscrapers. Intramuros, a walled city in colonial times,
is the heart of Old Manila.
In more detail, sourcinghub.io wrote – in May
2020 – about key products made by the Filipino
economy. This included clothing, textiles and
apparel (much of which went to the US) such
as activewear, formal wear, t-shirts, men’s clothing,
women’s clothing, and accessories; electronics
products, components and devices with
Texas Instruments, Toshiba and Lexmark having
bases; aerospace components from firms
such as Moog to the tune of $3bn a year; and automotive
with manufacturing by Volvo, BMW,
Honda, Mercedes-Benz, Mitsubishi, Nissan,
and Suzuki. Data from Statista covering 2021
states that the sector employed 18.68 percent of
the workforce.
Services
The tertiary sector, according to June 2023
PSA data represents 61.1 percent of GDP.
Statista suggests that it employs 57.05 percent
of the country’s workforce. Key features of
the sector include telecommunications, call
centres and finance. Lloyds states that the
Philippine government’s goals for the sector
include “attracting investments in human
resource development, design, R&D, finance,
and infrastructure; bolstering manufacturingderived
services; and establishing new
ecosystems linked with manufacturing.”
Growth areas noted by PSA were wholesale
and retail trade; repair of motor vehicles and
motorcycles; retail trade; and financial and
insurance activities. Indeed, with 110m people
it’s not surprising that these sectors have led
the way to growth, helped by the development
of e-commerce. In fact, Brittany.com.ph
comments that “as part of its goal to become
a global e-commerce leader, the Philippine
government’s goal is to increase e-commerce
revenue to $24.2 bn.”
Brave | Curious | Resilient / www.cicm.com / September 2023 / PAGE 36