Australia
China
India
Indonesia
Japan
Malaysia
Philippines
Singapore
South Korea
Taiwan
Thailand
VietnamThe Philippines’ economy is recognised as one of the most dynamic in the East Asia Pacific region, driven by solid economic fundamentals and a competitive workforce. Between 2010 and 2019, the country’s average annual gross domestic product (GDP) growth was a robust 6.4%.
The pandemic, however, significantly disrupted this growth trajectory, with the economy contracting by a record 9.6% in 2020. Prolonged lockdowns to contain Covid-19 resulted in sharp declines in consumption, investment, exports, tourism, and remittances.
The recovery was swift, with the economy expanding by 5.7% in 2021 and accelerating to 7.6% in 2022, surpassing pre-pandemic levels. In 2023, GDP growth moderated to 5.6%, reflecting a normalisation of economic activity. The IMF projects continued resilience, forecasting growth of 5.8% for 2024 and 6.1% for 2025.
Philippine GDP Annual Growth Rate (in %)
The Philippines’ population currently stands at approximately 114.3 million, with a median age of 25.7 years (2024), highlighting a young and vibrant workforce.
The Philippines’ unemployment rate showed a general decline throughout 2024, indicating improvements in the labour market. It stood at 3.6% in November.
Philippine Unemployment Rate (in %)
Currency and Central Bank
The Philippine peso (PHP), locally known as piso in Filipino, is the country’s official currency. It is subdivided into 100 centavos or sentimos. Before 1967, Philippine money featured the English term peso; this was changed to the Filipino language as part of cultural and linguistic reforms.
The Bangko Sentral ng Pilipinas (BSP), serves as the country’s central bank. The BSP was established in 1993 in accordance with Republic Act 7653 or the New Central Bank Act of 1993. This was later amended under Republic Act 11211 or the New Central Bank Act of 2019.
In 2024, the Philippines achieved an average inflation rate of 3.2%, aligning with the Bangko Sentral ng Pilipinas (BSP)’s target range of 2% to 4%. This marks a significant improvement from the 6.0% average inflation rate recorded in 2023.
Philippine Inflation (in %)
Industry and Trade
Services, industry, and agriculture are the main sectors of the Philippine economy.
The services sector is the largest contributor to the country’s GDP, accounting for approximately 62% of the total output. Significant growth was observed in telecommunications, business process outsourcing (BPO), and finance. The BPO industry, in particular, continued to thrive due to the country’s high English proficiency, educated workforce, and cost advantages.
The industry sector contributes around 28% to the GDP. Key manufacturing activities included food processing, cement, glass, chemical production, and iron and steel manufacturing. The Value of Production Index (VaPI) for manufacturing showed a year-on-year increase of 5.9% in April 2024, indicating a rebound in industrial output.
Lastly, the agricultural sector’s contribution to the GDP has continued to decline in recent years and is currently at about 9%. However, it still provides employment for almost 24% of the labour force. Major agricultural products included coconut, sugar, and rice. The sector faced challenges such as weather disturbances and fluctuating commodity prices, impacting overall productivity.
Philippine economy Balance of Trade
The Philippines aim to boost exports and strengthen the country’s economic standing on the global stage. Key export products including integrated circuits, office machine parts, insulated wire, semiconductor devices, and electrical transformers. A partnership by the Department of Trade and Industry (DTI) and the Department of Agriculture (DA) aims to unlock the full potential of the agriculture and fisheries sector, actively promoting Philippine products in international markets.
The top export partners of the country are China, the United States, Japan, Hong Kong, and Singapore. On the import side, China, Japan, South Korea, the United States, and Singapore are the biggest trading partners. Major imports comprise integrated circuits, refined petroleum, cars, crude petroleum, and broadcasting equipment.
Stock Exchanges and Capital Markets
The Philippine Stock Exchange was established through the merger of the Manila Stock Exchange and the Makati Stock Exchange in 1992, is the country’s sole stock exchange and one of the oldest in Asia, with origins dating back to 1927.
The PSE Composite Index or PSEi is the main index of the Philippines. It comprises 30 of the largest and most active stocks listed on the exchange, selected based on criteria such as public float, liquidity, and market capitalization.
The PSE has a total market capitalisation of $344.875 bn in December 2024. Exchange-Traded Funds (ETFs) are offered via the First Metro Philippine Equity Exchange Traded Fund, Inc.
Bond Market
The Philippine domestic bond market comprises both short- and long-term instruments, predominantly issued by the national government, with treasury notes and bonds leading the market. While the corporate bond segment remains smaller in comparison, it has experienced significant growth over the years.
In the third quarter of 2024, the local currency bond market expanded by 3.8% quarter-on-quarter, reaching a total of PHP 13 trillion. This acceleration was driven by increased issuances across all bond segments, supported by the Bangko Sentral ng Pilipinas’ (BSP) dovish monetary policy stance.
In May 2024, the Philippines returned to the international capital markets, successfully issuing $2 bn in dual-tranche 10-year and 25-year dollar-denominated global bonds. The 25-year tranche was issued under the Republic’s Sustainable Finance Framework, marking the country’s fifth G3 ESG bond offering.
Building on the success of its maiden $1 bn 5.5-year Sukuk bond issued in December 2023, the Philippine government plans to issue another Sukuk bond in 2025. This initiative aims to develop the Islamic finance market and attract Shariah-compliant investments, reflecting the country’s commitment to diversifying its investor base and financial instruments.
Real Estate Market
The Philippine real estate market has experienced significant fluctuations over the past decade, influenced by various economic and global factors.
Between 2010 and 2018, the market saw substantial growth, driven by economic expansion and a burgeoning middle class. However, challenges such as the US-China trade tensions and the Covid-19 pandemic led to a slowdown in 2019 and 2020. By the end of 2020, the Philippines was among the worst-performing markets in the Global Residential Real Estate report.
Recovery commenced in 2022, with the average price of luxury 3-bedroom condominiums in Metro Manila’s central business districts rising by 3.98% to PHP 203,550 (US$3,571) per square meter, according to Colliers International.
In 2024, the market continued its rebound, supported by the government’s projected GDP growth of 6% to 7%. However, sustained high inflation rates posed potential challenges, particularly concerning interest and mortgage rates.
Philippine Housing Index (in %)
Editorial Note:
This article was written with the assistance of AI. A human editor reviewed and refined the text for accuracy and quality before publication.
Source of charts: tradingeconomics.com
