Philippines Quarterly Update, June 2010

World Bank

Philippines Quarterly Update, June 2010

Autores

World Bank

Editor

Washington, DC

Descripción

The Philippines economy posted robust growth in early 2010, in part due to large one-off factors. As did many countries in the region, the Philippines benefited from a strong rebound in global trade. Manufacturing and investment activity expanded briskly as a result. Private consumption continued to expand, as consumer confidence improved. Growth also benefited from election-related spending. Expansionary (and now pro-cyclical) fiscal policy continued to support growth. Despite a withdrawal of liquidity-enhancing measures and a stronger peso, a closing output gap meant that monetary policy remained accommodative. A World Bank study of Philippines migration pattern during the global recession reveals that deployment of overseas foreign workers (OFWs) actually accelerated during the crisis. Partly this reflected the fact that the top OFW destinations were not as affected as the rest of the world. The most affected OFWs were males, production workers (especially construction workers) and new hires. By contrast, females, services workers, seafarers and rehires proved resilient to the crisis or even benefited from it. Globally, less tolerance towards weak public finances is expected, raising the need to introduce a credible medium-term fiscal consolidation plan for the Philippines. Running a pro-cyclical fiscal policy with relatively high debt and limited fiscal space-as undertaken in the first-half of 2010-raises risks and should be reverted. Credibility towards such a goal could be achieved, for example, by designing a comprehensive multi-year reform package. As the output gap closes, the accommodative monetary policy introduced in 2008 would need to be gradually unwound, starting by reaching a broadly neutral stance in 2010. An increase in policy rates currently negative or slightly positive could achieve such a goal.

Palabras clave

ACCOUNTING, ADVANCED ECONOMIES, AGRICULTURE, ANNUAL GROWTH, ASSET VALUES, BALANCE OF PAYMENTS, BALANCE OF TRADE, BANK CREDIT, BANK LENDING, BANKING SYSTEM, BASIS POINTS, BILL, BOND ISSUANCES, BUDGETING, BUFFER, CAPITAL FLOWS, CAPITAL INFLOWS, CASH TRANSFER, CENTRAL BANK, COMMODITY PRICES, COMPETITIVENESS, CONSOLIDATION, CONSUMER CONFIDENCE, CORE INFLATION, CREDIBILITY, CREDIT DEFAULT, CREDIT DEFAULT SWAPS, CREDIT GROWTH, CURRENT ACCOUNT, CURRENT ACCOUNT DEFICITS, CURRENT ACCOUNT SURPLUS, CURVE YIELD, CYCLICAL FACTORS, DAMAGES, DEBT CRISIS, DEBT DEFAULTS, DEBT LEVEL, DEBT LEVELS, DEBT RATIOS, DEBT STOCK, DEBT SUSTAINABILITY, DEBT-SERVICE, DEPRECIATION, DEVELOPING COUNTRIES, DISBURSEMENTS, DOMESTIC INTEREST RATES, DOMESTIC LIQUIDITY, DURABLE, DURABLE EQUIPMENT, ECONOMIC CONDITIONS, ECONOMIC DEVELOPMENT, ECONOMIC DEVELOPMENTS, ECONOMIC GROWTH, ECONOMIC SLOWDOWN, EFFECTIVE EXCHANGE RATE, EFFECTIVE EXCHANGE RATES, EMERGING MARKETS, EQUIPMENT, EURO ZONE, EUROPEAN MONETARY UNION, EXCHANGE RATE, EXCHANGE RATE SHOCKS, EXCHANGE RATES, EXIT STRATEGY, EXPENDITURE, EXPENDITURES, EXPORT GROWTH, EXPORTERS, EXPORTS, EXPOSURE, EXPOSURES, EXTERNAL BORROWINGS, EXTERNAL DEBT, EXTERNAL POSITION, EXTERNAL SHOCKS, FINANCIAL ASSET, FINANCIAL ASSETS, FINANCIAL CONSTRAINTS, FINANCIAL CRISIS, FINANCIAL MARKET, FINANCIAL MARKET PARTICIPANTS, FINANCIAL MARKETS, FINANCIAL STATEMENTS, FINANCIAL VULNERABILITY, FISCAL BALANCE, FISCAL BALANCES, FISCAL DEFICIT, FISCAL DEFICITS, FISCAL POLICIES, FISCAL POLICY, FISCAL POSITIONS, FOOD PRICES, FOREIGN ASSETS, FOREIGN CURRENCY, FOREIGN DEBT, FOREIGN DIRECT INVESTMENTS, FOREIGN EXCHANGE, FOREIGN EXCHANGE RISK, FOREIGN FINANCING, FORWARD CONTRACTS, GDP, GLOBAL BOND, GLOBAL BONDS, GLOBAL ECONOMY, GLOBAL MARKET, GLOBAL TRADE, GOVERNMENT DEFICITS, GOVERNMENT FINANCING, GOVERNMENT POLICY, GOVERNMENT REGULATION, GOVERNMENT SPENDING, GROWTH PERFORMANCE, GROWTH RATE, GROWTH RATES, HIGH INFLATION, HOLDING, HOLDINGS, HOUSEHOLD INCOMES, IMPORT, IMPORT DEMAND, IMPORTS, INFLATION, INFLATION EXPECTATIONS, INFLATION FORECAST, INFLATION RATE, INFLATION RISK, INFLATIONARY PRESSURES, INSURANCE, INTEREST PAYMENTS, INTERNATIONAL INVESTMENT, INTERNATIONAL RESERVES, INTERNATIONAL TRADE, INVENTORIES, INVENTORY, INVESTMENT ACTIVITY, INVESTMENT CLIMATE, INVESTMENT FLOWS, INVESTMENT STRATEGIES, ISSUANCE, JUDICIAL INDEPENDENCE, JUDICIAL SYSTEM, LABOR FORCE, LABOR MARKET, LACK OF CREDIT, LEGAL FRAMEWORK, LIQUIDITY, LIVING STANDARDS, LOCAL BANKS, LONG-TERM LOANS, LOSS OF COMPETITIVENESS, M2, MACROECONOMIC SHOCKS, MARK-TO-MARKET, MARKET EFFICIENCY, MARKET FORCES, MARKET LAWS, MARKET REFORMS, MATURITY, MONETARY AUTHORITIES, MONETARY CONDITIONS, MONETARY FUND, MONETARY POLICY, NATURAL DISASTERS, NATURAL RESOURCES, NEGATIVE SHOCKS, NET EXPORTS, OIL PRICE, OIL PRICES, OUTPUT GAP, POPULATION GROWTH, PORTFOLIO, PORTFOLIO INVESTMENTS, POVERTY REDUCTION, PRICE INCREASES, PRICE INDEX, PRICE INFLATION, PRIVATE CONSUMPTION, PRIVATE SECTOR CREDIT, PUBLIC DEBT, PUBLIC DEBT STOCK, PUBLIC EXTERNAL DEBT, PUBLIC FINANCES, PUBLIC FUNDS, PUBLIC SECTOR DEBT, RAPID GROWTH, RATE OF GROWTH, REAL EFFECTIVE EXCHANGE RATE, RECESSION, REGULATORY REFORM, REMITTANCE, REMITTANCES, RESERVES, RETURN, RISK AVERSION, SAFETY NET, SECURITIES, SHORT-TERM EXTERNAL DEBT, SHORT-TERM VOLATILITY, SLOWDOWN, SOVEREIGN DEBT, SOVEREIGN DEBT RESTRUCTURING, SOVEREIGN DEBTS, SOVEREIGN YIELD, SPOT MARKET, STABLE INFLATION, STOCK EXCHANGE, STOCK MARKET, STOCK MARKET INDEX, STOCKS, STRUCTURAL REFORMS, SUPPLY SIDE, TAX, TOTAL EXTERNAL DEBT, TOTAL REVENUE, TRADE BALANCE, TRADE DATA, TRADE DEFICIT, TRADING, TRADING PARTNERS, TRANSPARENCY, TREASURY, TREASURY BONDS, UNCERTAINTY, UNEMPLOYMENT, UNEMPLOYMENT RATE, VALUATION, WARRANTS, WEAK BANKING SYSTEM, WEIGHTS, WITHDRAWAL, WORLD TRADE, YIELD CURVE