In this short article, I will discuss the Philippine economy and see where we stand today and what we can expect in the future.
I will pick out four specific areas we can all be interested in and take in spite of a lot of negative economic information there’s still a bit of good that can be celebrated on.
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Stock Smarts General Santos – October 6 – 7, 2018
Stock Smarts Cebu — October 27 – 28, 2018
Stock Smarts Taiwan – November 3
Stock Smarts Davao — November 10 – 11, 2018
Stock Smarts Dubai — November 16 – 20, 2018
Stock Smarts Singapore — November 28 – December 2, 2018
Stock Smarts Manila — November 24, 25, December 8, 9 & 15
Top 10 Stocks for 2019 — December 15, 2018
The first area we can see a sustained growth is in construction materials such as cement and aggregates. We all know that it is high time that the Philippines invest in infrastructure and this is the key driver for strong growth in this area.
Globe Telecoms has continued its expansion to become one of the biggest and strongest companies here in the Philippines. The infrastructure just for Globe Telecomes alone account has had a significant effect on demand of materials, which is pushing imports to be high.
Now, this industry sector responsible for supplying materials for construction and infrastructure projects is at a 34 year high!
It is well known, that Filipino’s like to spend money, and this translates in to product consumption. With inflation now the highest seen for the past nine years consumption the Philippines still remains to be the second strongest in consumption for the whole of the ASEAN area.
The Philippines has been the number one consumer of products in ASEAN over the past few years only to be dethroned by Malaysia.
The next area to look at that has made a big impact on the economy is tax revenue collections. The BIR has collected far more taxes than previous administrations and these taxes have been collected on time.
This allows the government to spend on projects without borrowing. If we look at tax revenue collections against Gross Domestic product (GDP), it is a staggering. The collections are the highest in 21 years.
Another positive side to the tax collections is that credit agencies like moody’s are more likely to give the country a better rating which in turn makes interest rates on borrowing money less and money more accessible should the government need to borrow.
Finally, I will point out employment. Employment is extremely important to our economy. The more people working the more people spend in local businesses.
This clearly has a knock on effect to the economy, with greater revenue collections by the BIR, more spending on telecommunications and so on.
So inflation is predicted to keep rising this year maybe to 8%. Should you be worried?
OFW remittances continue to be strong. With over 10 Billion US Dollars remitted in the first 4 months of the year, this could help push our economy.