Republic of the Philippines

BOHOL ISLAND STATE UNIVERSITY

Main Campus
Tagbilaran City

Vision: A premiere S&T university for the formation of world-class and virtuous human resource for sustainable development in
Bohol and the country.
Mission: BISU is committed to provide quality higher education n in the arts and sciences, as well as in the professional and
technological fields;
undertake research and development, and extension services for the sustainable development of Bohol and the country.

EDUCATION FOR SUSTAINABLE

DEVELOPMENT

Group 3

Bitoonan, Almira

Bongcaras, Joanna Marie

Cimafranca, Joefel

Dela Cerna, Nelina Mae

Gawat, Jennelyn

Lofranco, Jyrah Mae

Petalcorin, Rolain
POVERTY, ECONOMY AND FOREIGN DEBTS

Poverty

Amid easing inflation and rising income, the World Bank expects poverty rate in the
Philippines to fall below 20% starting 2020.

It projected poverty incidence in the Philippines at 20.8% by the end 0f 2019, down from
26% in 2015

 World Bank’s estimated poverty incidence in the Philippines.

Its medium term poverty projections were based on the lower middle-income poverty line of
$3.20 per day.

At that threshold, the World Banks sees the Philippine poverty rate to further decline to:

Partial estimates of the 2018 Family Income Expenditure Survey showed that income of
household in lower income decile grew at much faster pace than of average.

Meanwhile, cash transfer schemes from the government will continue to help cushion the
impact of negative shocks. Given the following:

• Non-agriculture wage employment

• Rising real wage

• Continuation of social programs

• Stabilizing inflation
 Latest poverty incidence is equivalent to 23.1 million poor Filipinos, down from the 28.8
million below the poverty threshold 3 yrs. ago (year 2016)

 Causes of Poverty

• low to moderate economic growth for the past 40 yrs.;

• low growth elasticity of poverty reduction;

• weakness in employment generation and the quality of jobs generated;

• failure to fully develop the agriculture sector;

• high inflation during crisis periods;

• high levels of population growth;

• high persistent levels of inequality (incomes and assets), in which dampen the positive
impacts of economic expansion; and
• recurrent shocks and exposure to risks such as economic crisis, conflicts, natural disasters
and “environmental poverty”

 Reduction of Poverty

The World Bank said that fostering high quality job creation and boosting human capital
investment would enhance the impact of economic growth on poverty reduction and shared
property.

To increase the growth impact on poverty and inequality, targeted investments and
supportive business regulations are needed in industries and sectors that generate high-quality
job.

Human capital investments in education and health must be fortified including training
and skills development which will help worker to stay competitive.

Improving social protection programs, including 4P’s will support the incomes of poor
households and help build their resilience against adverse shocks.
Economy

 Key findings

• Economic growth slowed in the fist half of 2019, driven by a rapid deceleration in
investment growth due to contraction in public spending and weaker global economy.
Nevertheless, the Philippines expects to sustain progress in poverty reduction.

• Amidst rising global uncertainties, the Philippine economy remains strong and is
projected to grow 5.8% in 2019, before recovering to 6.1% and 6.2% in 2020 and 2021,
respectively.

• In short term, fast tracking implementation of recently approved game-changing reforms

would help to achieve inclusive growth.

• In the long term, promoting competition to generate quality jobs will enhance the impact
of growth on poverty reduction in the Philippines.

 Recent Economic Developments

• In the first half of 2019, economic growth slowed to its lowest level in eight years amid
challenging external environment and a significant slowdown in investment growth.

• Improving labor market conditions, and sustained growth in real household incomes, led
to progress in poverty reduction.

• Private consumption was the main growth driver, as growth recovered to 5.8% year-on-
year in the first half of 2019 from 5.3% during the same period last year, driven by
moderating inflation, steady remittance inflows, improving job market and increase in
economic activity from election related spending.

• Declining inflation driven by stabilizing prices of food and energy prompted the Bangko
Sentral ng Pilipinas (Central Bank of the Philippines) to adopt more accomodative policy
stance in 2019. Inflation fell to 1.7% in August 2019, the lowest in almost 3 years.

• The Philippine governments expansionary fiscal policies for 2019 was put on hold as the
delayed passage of the 2019 public budget impacted the pace of public spending
significantly in the first half of the year, resulting in substantial underspending.
 Nevertheless, the implementation of previous tax policy reforms led to robust revenue,
resulting in a lower than programmed fiscal deficit for the first half of 2019.

 Outlook and Risks

• The Philippines’ growth outlook is weakened by a difficult external environment

and domestic challenges as growth is expected to slow from 6.2% in 2018 to 5.8%
in 2019 before recovering to 6.1% in 2020 and 6.2% in 2021.

• Poverty reduction is expected to continue based on the current economic outlook.

It is estimated to have declined from 26% in 2015 to 20.8% in 2019, and further
declining to 19.7% in 2020 and 18.7% in 2021.

• In the short term, resuming public investment and fast tracking effective
implementation of game-changing reforms (Ease of Doing Bussiness Law, Rice
Tariffication, creation of fundamental ID system, etc.,) would be critical to set the
country to a higher path towards accelerating inclusive growth. While in the long
term, promoting competition to foster quality job creation will enhance the impact
of economic growth.
 Fostering Competition and the Challenge of Restrictive Regulations

• Philippine market are highly concentrated limiting market competition.

• Lack of competition in key sector has negatively impacted Philippine firms and
consumers, resulting in sub-optimal outcomes in key sectors (electricity,
telecommunications, transport and logistics)

• Reducing restrictions to market competition would yield significant payoffs for

household and firms in the country to boost the economy’s overall competitiveness.

• Implementing these reforms will be critical

a) Address unclear or restrictive regulations in infrastructure sectors and

professional services to create more competitive conditions

b) Eliminate restrictions on foreign and domestic investors to help level the playing
field.
 c) Minimize the scope of controlled prices to incentive firms to compete

d) Lessen the involvement of state-owned enterprises and other operations in

typically competitive markets to promote a more effective use of public funds

e) Streamline burdensome administrative procedures for business to make it easy

to enter the market.

Foreign Debts

In Philippines, external debt is part of the total debt that is owed to creditors outside the country.

External debt in Philippines increased to 78959.57 USD Million in 2018 from 73097.87
USD Million in 2017.

The slight increase in debt stock during the first quarter was brought about by:

• Positive foreign exchange revaluation adjustments, due largely from the

weakened US Dollar against Japanese Yen which pushed the debt stock higher by
US$655 million ( but peso depreciation against US Dollar decreased the debt
level by US$144 million; and

• Prior periods’ adjustments due to late reporting.

These upward pressures on the debt stock were partially mitigated by:

• net principal payments (US$735 million), which resulted mainly from the bullet
payments at maturity as well as prepayments by the private sector; and

• transfer of holding of Philippine debt papers issued offshore (US$472 million) by

non-residents to residents.

External Debt in Philippines averaged 49965.45 USD Million from 1981 until 2018,
reaching an all time high of 79949.42 USD Million in 2012 and a record low of 20893 USD
Million in 1981.
8 External Debt of Philippines 2010-2018
8
7
7
7
7
7
6
Sources:

Bangkok Sentral ng Pilipinas

https://www.bsp.gov.ph/publications/media.asp?id=4707&yr=2018

Philippine Total Gross External Debt

http://tradingeconomics.com/philippines/external-debt

PH Poverty rate seen falling below 20% starting 2020

https://business.inquirer.net/281269/ph-poverty-rate-seen-falling-below-20-starting-2020