Philippines: a decade of changes under the tropical sun

The Philippines is a country with a rich history, combining Spanish, American, and Chinese cultures, which is reflected in the architecture, local cuisine, and the hospitality of Filipinos. How have the Philippines changed 10 years later? Has this decade brought growth and prosperity or new challenges? The answers to these questions can be found in the new article of the RAUIE.

The Philippines is one of the fastest-growing countries in Asia.

1. According to World Bank data, the service sector accounts for 61.0% of GDP, industry and construction for 28.9%, and agriculture for 10.1%.

The Philippines is one of the global leaders in business process outsourcing. Large international companies like JPMorgan Chase, Accenture, and Google establish their call centers, IT support, and other business processes in the Philippines, attracted by the low wages and high English proficiency of the employees.

During the presidency of R. Duterte (2016–2022), a series of measures were implemented in the Philippines aimed at creating transport, industrial, energy, and other types of infrastructure to increase employment and equalize socio-economic conditions between regions of the country. This set of measures was called the "Build Build Build" (BBB) program. The BBB program aimed to create over 20,000 infrastructure projects (construction and modernization of highways, hospitals, schools, lighthouses, government centers, and more), with flagship infrastructure projects forming its core. By the end of Duterte's term, there were 119 such projects (2022). The successor to R. Duterte as President of the Philippines, F. R. Marcos Jr., introduced an economic policy called the "Build Better More" program as a counterpart to the "Build Build Build" program. This campaign involves spending on the development of various types of infrastructure at a level of at least 5% of GDP. As of August 2023, 197 flagship infrastructure projects have been identified, including 26 national projects, 37 interregional ones, 72 on Luzon island, 34 on Mindanao island, and 25 on the Visayan islands. Around 61% of all flagship projects are in transport infrastructure, 22% in water resource utilization, 8% in agriculture, and 9% in other areas (2023).

E-commerce, financial technologies, and online education are rapidly developing. For example, the company GCash, which provides financial services through mobile phones, has over 60 million users in the Philippines.

Top 10 exported goods from the Philippines in 2023:

• 35% ($25 billion) - electronic integrated circuits
• 4.18% ($3.05 billion) - insulated wires, cables
• 2.68% ($1.96 billion) - refined copper and unprocessed copper alloys
• 2.41% ($1.76 billion) - electrical transformers
• 2.15% ($1.57 billion) - printing machines
• 1.8% ($1.31 billion) - diodes, transistors, and similar semiconductor devices
• 1.76% ($1.28 billion) - computing machines and their components (computers)
• 1.67% ($1.22 billion) - bananas
• 1.65% ($1.2 billion) - gold
• 1.61% ($1.17 billion) - coconut oil

2. Illiteracy in the Philippines has been a problem due to various factors such as limited access to education because of financial difficulties, remote school locations, and insufficient resources for learning. However, the Philippine government is taking steps to improve education and reduce the level of illiteracy in the country. Adult education programs have been implemented, opportunities for education in rural areas have been expanded, and the overall quality of education has been improved. As a result, the rate of illiterate people has been reduced from 2.5% to 0.9%.

3. The current minimum wage in the Philippines ranges from 270 to 537 Philippine pesos per day (equivalent to $122-243 per month for a five-day workweek). The average salary is 13,400 Philippine pesos (around $260) per month.

Among the indicators characterizing the well-being of citizens is the motorization rate of the population. There are 38 vehicles of all types per 1000 Filipinos (for comparison, in Russia it is 381 vehicles per 1000 people).

Interestingly, according to statistics from the Numbeo database as of the beginning of 2024, food prices are 35.9% higher in the Philippines than in Russia. Renting a home in the Philippines is on average 16.2% cheaper than renting a similar apartment or house in Russia. The cost of a basket of basic consumer goods and services (including food, clothing, transportation, communication, utilities) in the Philippines is on average 13.9% higher than in Russia.

4. In the first quarter of 2023, the Philippine economy grew by 6.4%, marking two years of continuous growth since the recovery from the pandemic. Although the economy is currently dealing with inflation and higher interest rates, the country's main stock index rose by 6% compared to the previous year.

5. The situation with poverty in the Philippines is slowly but steadily improving. The government has ambitious goals to reduce the poverty rate, including cash transfers to low-income families (Pantawid Pamilyang Pilipino Program), food assistance programs, and affordable housing initiatives.

---

From 2013 to 2023, the Philippines demonstrated significant economic development, supported by GDP growth and improved social indicators. The country achieved stable economic growth thanks to active investment policies and support for small and medium-sized businesses. During this period, there was a significant reduction in poverty and improved access to education and health care. However, challenges such as income inequality remain relevant to the country's sustainable development.

To better understand the specifics of each country and achieve real results in Asian countries, it is important to have your own team there that systematically solves the tasks of your business. The RAUIE provides opportunities for organizing a representation of your company in Asian countries. With minimal costs, you can open a branch of your company based on existing commercial structures of the RAUIE in China, Vietnam, India, the Philippines, Indonesia, and Turkey.

You can submit a request for a free consultation through the feedback form on the website ("Ask a question" on the right side of the page), via email at business@raspp.ru, or by phone at +7-963-963-8363. Natalya Sapunova, Head of the RAUIE Strategic Partnerships Department, will assist you.