The Philippines is an archipelagic country in Southeast Asia situated in the western Pacific Ocean, broadly categorized under three main geographical divisions namely Luzon, Visayas and Mindanao. Being one of the most dynamic economies in the region - ranks 13th in Asia, and the third largest in ASEAN after Indonesia and Thailand, Philippines’ increasing urbanization, as well as growing middle class and young population are carrying on an incredible economic growth.
The country sustained an average annual growth of 6.3 percent between 2010 to 2017. In 2019, this growth is projected to reach 6.4 percent according to The World Bank, the country is poised to make the leap from a lower-middle income country to an upper-middle income country. Adding to that, the Philippines is home to over 100 million people, an attractive customer base for foreign businesses willing to enter the market.
Philippines’ major industries include manufacturing and agribusiness, mineral processing, mining, pharmaceuticals, shipbuilding and electronics. As one of the focus areas, the manufacturing sector represents more than half of the Philippine’s industrial sector and accounts for almost a quarter of the country’s total GDP. Their agribusiness is mainly composed of processed fruits and vegetables, seaweed, tropical fruits, mango seed oil, sugar plantation, ethanol and biofuels. It is also worth noting that the country is the second largest producer of coconuts.
The government’s vision is to create a globally competitive services sector that is capable of creating quality jobs and moving up the global value chain. The goals include attracting more investment across different sectors such as human resources, design, R'n'D, finance and infrastructure. To support that, the government has now released a new foreign investment policy that is more relaxed compared to the previous version. Under the new policy, the country now allows 100% ownership of internet based businesses, financing companies, investment houses and wellness centers. According to the World Bank, a more open economy and the removal of restrictive regulations could add up to 0.2% points to the yearly growth of the Philippines economy.
As a newly industrialized economy, the Philippines still places a large emphasis on agricultural and manufacturing sectors; however the service sector recorded the fastest growth of 6.8% in 2018 followed by Industry and Agriculture. The three most important drivers in the sector are Information Technology-Business Process Management (IT-BPM), Tourism, and Remittances.
In recent years, the Philippines’ economy has also shown an impressive progress in delivering inclusive growth, and has experienced a decline in poverty rates and a falling Gini coefficient.
Poverty level declined from 26.6 percent to 21.6 percent in 2015 while the Gini coefficient declined from 42.9 to 40.1 over the same time period. The government has also prepared strategic plans focused on reducing poverty, like ‘’AmBisyon 2040’’. These plans target to bring the poverty level down further to between 13 to 15 percent by 2020. To support inclusive growth, the Philippine’s government has introduced universal kindergarten and senior high school, and provided more funding for basic education. These policies aim at improving overall education and inclusive growth, and they are part of a bigger plan to let the country achieve its full potential.
An impressive economic growth and its’ reduced poverty rate will make the Philippines a great destination for future investments. As companies increasingly move some of their operations and production or manufacturing processes to other countries, such as the Philippines, more micro, small, and medium enterprises (MSMEs) are drawn into the global value chain, which in turn creates more employment and business opportunities. Moreover, the country will sustain this growth momentum with a growth forecast of 6.5 percent in 2020 and 2021.
Market research Philippines is a growth strategy and marketing consultancy company, an Asia-focused strategy firm with more than 10 years of experience. We help multinationals and local business to enter, expand, and win in the Philippines market, creating value and profitable returns for businesses.
Our team of expert business analysts and consultants will provide strategies to help your business grow and extract value in the region. We advise multinational companies and local business providing them with in-depth data and strategies to capture value in the market. A dedicated client-focused approach and an on-the-ground marketplace knowledge enable us to help companies throughout their processes. Market Research Philippines work with clients to help them translate marker research into realistic opportunities. We help companies providing them directions by mapping potential markets, competitors, customers, partners, channels and other market dynamics.
With more than 10 years of experience, a client repeat rate of 90%, and a proven track record in the Philippines market, Market Research Philippines will help your company anticipating what could go wrong and validate roadmaps to accelerate your growth in Asia.