Cooperation is key to success, especially in nation-building. The Department of Finance works with all sectors of society to strengthen the Philippine economy.
The Marcos Jr. government is laying the foundations of a stronger economy, building on the wins and successes of the previous administration.
Building together means everyone has a role to play and everyone does their part so the whole nation can move towards progress.
This first issue of the National Strategy for Financial Inclusion(NSFI) 2022-2028 Annual Report highlights the progress made to accelerate financial inclusion in the country under the guidance of the interagency Financial Inclusion Steering Committee (FISC).
Established in 2016 through Executive Order No. 208, the FISC provides direction in the implementation of the strategy and serves as a platform for the whole-of-nation pursuit of the NSFI’s vision to achieve “financial inclusion toward inclusive growth and financial resilience.”
The cover shows a well-paved road in front of the facade of the DOF building, with people from the different sectors of the economy-infrastructure, healthcare, agriculture, education and business “in motion”. This symbolizes the critical role of the Department of Finance, as the steward of the government’s financial resource, in the continued recovery efforts and strengthening of the country’s resilience amid the health crisis.
Video Links:
1.) Message from the Secretary
2.) Philippine Economic Briefing 2022 Speech of Secretary Carlos G. Dominguez
In December 2019, a cluster of cases of pneumonia-like disease was reported in Wuhan, Hubei Province in China. On March 11, 2020, the World Health Organization (WHO) officially declared the COVID-19 virus as a pandemic, the highest level of health emergency, killing more than 4,000 people and spreading to 114 countries.
2019 saw another banner year for the Philippine economy. It posted a strong growth of 6 percent, keeping the country among the world’s fastest growing economies. Moreover, the economy is increasingly becoming more investment-led, thanks to the infrastructure spending. This year, investments accounted for 26.2 percent of the economy, a sharp increase from its share of 21.3 percent in 2015.
In 2018, the Philippine economy maintained its strong growth trajectory amidst external uncertainties. Rising oil prices, deepening trade tension between the United States (US) and China, slower growth in China and other developed countries, and US fiscal stimulus weighed down on growth prospects of developing economies including the Philippines.
The Philippine real GDP marked its 6th straight year of growth above 6 percent in 2017, buoyed by favorable domestic and external demand, albeit slightly moderating to 6.7 percent from 6.9 percent in 2016. It also remained one of the best performing economies in Asia, placing third behind Vietnam (7.1 percent) and China (6.8 percent).
The Philippine economy sustained its solid growth performance in 2016, amidst the weak external demand, US monetary policy tightening, transition between two administration, and other domestic challenges. The country’s GDP accelerated by 6.9 percent, the highest in the region, driven by robust demand, investment and increased government spending.
Having shed its sick man moniker and recognized as Asia’s bright spot, the country stands as a resilient harbor amid turbulence in the global economy.
The cover art, showing vibrant, dynamic splashes of color forming a circle, represents the virtuous cycle the Philippines has earned for itself after restoring confidence in its economy, institutions, and people.
The major disasters that hit the country, causing loss of thousands of lives, displacement of several millions of people, major disruption in the utility services in the severely affected areas posed a threat to our economy. Nonetheless, the country still managed to muster a 7.2 percent real gross domestic product (GDP) growth in 2013 outpacing other Southeast Asian peers, next to Lao PDR.
For much of 2012, the Philippines was the center of economic gravity in the Association of South East Asian (ASEAN) Region, posting a better than expected 6.6 percent Gross Domestic Product (GDP) growth rate to become one of the fastest growing economies in the world.
Economic Highlights: In 2011, the Philippine economy grew by 3.7 percent in face of macroeconomic headwinds and natural calamities that roiled the global economy. Slow US recovery, sovereign det turmoil in the euro zone, political unrest in the Middle East and North Africa (MENA), the 9.0 magnitude earthquake, tsunami and nuclear fallout in Japan, and heavy flooding in Thialand, among others, challenged the economies of the Philippines and the Asia Pacific Region.
Economic Highlights: In 2010, the Philippine economy grew by 7.6 percent, recording one of its best performances since 1976. On a regional level, this strong recovery compares well with Thailands 7.8 percent growth and Malaysias 7.2 percent growth. Global economic recovery, rebound in exports, rise in consumer and business spendsing alongside renewed public trust in the new administration, all paved the way for this economic feat.
Economic Highlights: In 2009, the Philippine economy felt the full brunt of the global financial crisis. Real GDP growth declined to 1.1 percent from 3.7 percent in 2008. However, this growth rate was better than those of the countrys peers in the ASEAN region whose economies contracted, like that of Thailand (-2.3 percent), Singapore (-2.0 percent), and Malaysia (-1.7 percent). The strong performance of the services sector as well as the stimulus program implemented by the government, which fuelled higher government consumption and investments, sustained economic growth. The economy also derived strength from the comprehensive economic reforms that were firmly put in place as far back as the 1990s, which have made the economy less vulnerable to external shocks.
Economic Highlights: In 2008, the US economy fell into recession, prompted by the worst financial crisis since the Great Depression. This sent ripples of turmoil across the globe, dampening growth prospects for the rest of the world economies.The Philippine economy was no exception as the crisis brought myriad of challenges, including uncertainties in the labor front with a number of Overseas Filipino Workers (OFWs) losing their jobs in host economies, as well as the steep decline of the export sector. In spite of the negative developments, the economy managed to post a modest 3.8 percent real GDP growth, a deceleration from the 7.1 percent expansion in 2007.Growth remained broad-based, fueled by industry and services, growing 5.0 percent and 3.3 percent, respectively. On expenditure side, government consumption, private consumption and investment were growth drivers, as exports posted a 1.9 percent decline.
In 2007, the Philippine economy withstood the threat of soaring oil prices, a lackluster US economy, and a host of domestic challenges. In fact, the
country’s gross national product (GNP) accelerated by 7.8 percent while gross domestic product (GDP) expanded by 7.3 percent, the highest growth in 31
years.
A more aggressive infrastructure program and increased spending brought
about by a stronger budget in2007 boosted economic activities during the year.
After having been constrained by the re-enacted budget in 2006, government consumption expenditures and fixed capital investment gained ‘10.0 percent
and 9.5 percent, respectively, in 2007.
In 2006, the Philippine economy sustained its growth momentum despite continuous threats from both internal and external fronts. The country’s real gross domestic product (GDP) posted 5.4 percent growth in 2006, from 4.9 percent in 2005, while real gross national product (GNP) grew by 6.2 percent compared with 5.6 percent in the previous year.
The Philippine economy sustained its growth momentum in 2005, posting 5.1 percent increase in real gross domestic product (GDP) and 5.7 percent in real gross national product (GNP) amid harsh conditions like soaring oil prices and the political bickerings that dominated the headlines starting from the middle of the year. The 2005 expansion, though, was lower than the 6.0 percent GDP growth registered in 2004 as weaker exports, particularly the electronics sub-sector and slowdown in investments dragged economic activities during the year.
In 2004, the global economic environment remained threatened by a host of factors. Foremost among them was the prolonged US-led war in lraq that contributed to the spiraling in the prices of oil in the world market. The concomitant increase in the prices of energy and materials tempered world industrial production growth, squeezed profit margins and even resulted to a loss of jobs.
The Philippine economy stayed on course in 2003 despite shocks that included the US-Iraq war/ SARS breakout, and the failed mutiny in July. The country’s gross domestic product (GDP) rose 4.7 percent during the year, topping the 4.3 percent registered in 2002, and matching the government’s low-end forecast. The gross national product (G N P) rose 5.6 percent, better than last year’s 4.3 percent and the 5.4 percent high-end forecast. The Philippines’ growth performance in 2003 bettered the projections of the multilateral lending institutions and credit rating agencies.
The year 2002 was marked by difficulties in the internal and external environments caused by the continuing instability in the South, the threats of global terrorism and the impending hostilities in the Middle East. Despite such negative developments, however, the Philippine economy in general performed soundly based on the following key indicators: Real Gross National Product posted a 4.5 percentage increase.
Real Gross Domestic Product posted a 5.4 percent, higher than the 2001 actual rate of 4.5 percent.
The Philippine economy showe dremarkable resiliency in 20U amid adverse external and internal developments made worse by the September 11 incident. Real Gross Domestic Product and Real Gross National Product expanded by 3,2 percent and 3.4 percent, respectively. The economy’s performance was notable for three reasons. First, growth was sustained despite the steep downturn in exports. Second, the growth rate was among the highest in East Asia. Third, the growth rate surpassed the private sector’s forecast of 2.5-3.0 percent growth.
The country continued to enjoy unfettered I access to the international financial I markets in 2OOO. The highly positive investor response to our bond offerings confirms the continued confidence of the international community in the Philippine economy’s prospects. Moreover, the country successfully obtained financing from multilateral and bilateral sources in the form of program and project loans. Meanwhile, relatively Iow domestic interest rates that were prevailing until October 2000 allowed the National Government to raise additional financing to cover the deficit.
The year 1999 saw the Philippine economy staging a recovery following an almost nil growth in 1998. The fiscal sector played a significant role in the recovery process as it implemented a pump priming strategy intended to stimulate investment and rejuvenate aggregate demand. This strategy paid off , evident in the 3.7″/o actual CNP growth of the country in 1999 as against the 0.4oh growth in 1998. This was higher than the private sector forecast of 1 .4% to 2.2%.
The year 1998 brought dramatic changes in both the regional and international economic environment. The crisis-affected Asian economies experienced drastic decline in output, a complete reversal from the robust growth they registered in the earlier part of the decade. ln the Philippines, the lingering effects of the regional contagion and the twin weather disturbances – the El Nifro and the La Nifra phenomena – slowed down domestic economic activity. But the Philippines proved more resilient than its neighboring countries. It emerged as the only economy in theASEAN excluding Singapore which recorded a positive economic growth in 1998.
The year 1997 turned out to be a challenging year for the Philippine economy. The domestic economy was well on its way to achieving another banner year until it was derailed by the currency turmoil in East Asia and the El Nino phenomenon. Despite these setbacks, the economy managed to sustain its growth momentum as it posted real GNP growth of 5.8 percent in 1997 , a slight deceleration from the 6.9 percent growth registered in 1996.
The year 1996 witnessed a magnificent leap of a growing economy. Breaking away from traditional patterns of forward and backward steps, the Philippine economy iumped past familiar hurdles and attained an impressive 6.8 percent real growth rate. With the previous year’s growth leve1 of 5 percent, the Philippines appears to be on its way towards achieving the growth pace of its East Asian neighbors and firmly establishing itself as the newest Asian “tiger” by the year 2000.
The primary task of government in 1995 was to sustain the economic gains of the past year. This required the implementation of two basic strategies:
1) Maintenance of prudent financial and fiscal policies to prevent macroeconomic imbalances that impede development; and 2) Continued pursuit of structural and social reforms to ensure economic growth and a fair distribution of its benefits.
For the Department of Finance, it was a year of contrasts. The Economic Stabilization Program for 1991 -1992, which featured stiff budgetary cuts and better expenditure allocation, had produced the desired results. The first few months of 1993 were encouraging. lnvestments were coming in. The improved political stability had boosted the private sector’s confidence in the government.
The year 1990 marked the beginning of a decade with a call for a broader scope and deeper intensity of policy reforms. The series of internal and external shocks experienced by the country in 1990 upset the macroeconomic balance which past stabilization efforts have intended to achieve to put the economy on sustainable growth path. These shocks include the severe natural calamities such as the earthquake and the drought, power shortages and the turmoil in the Middle East. Their adverse impact was manifested in the deterioration of the economic environment. A higher government deficit arising from the unexpected allocation of funds to alleviate the impact of these shocks and the faster implementation of development projects due to streamlined project implementation procedures contributed to the upsurge of inflation and interest rates. The shrinkage of export markets due to international uncertainties and the loss of the Middle East market led to the deterioration in the exchange rate. Higher oiI prices further fanned the fire of inflation resulting in macroeconomic imbalances . Thus, the economy suffered a decline in output growth and investment levels.
In 1988, the whole government machinery focused its efforts on sustaining economic recovery. The Department of Finance, being the main agency involved in the formulation and administration of financial and fiscal policies, geared its activities toward enhancing public sector resource mobilization and in promoting an environment conducive to private sector savings mobilization and investment.
The year 1987 saw economic recovery in full swing, with a real GNP growth rate of 5.7 percent accompanied by manageable inflation, a slight increase in interest rates and stronger balance-of-payments position. In pursuance of its basic mandate of promoting public sector resource mobilization and sound financial management of the economy, the Department of Finance was active in promoting and supporting the recovery through resource management and structural reform.
Economic stabilization wqs the maior gul of the National Govemment in 1984. Duing the past year, the National Govemment geared all its policy tools totwrd the two-fold obiectives of dampening inflationary pressures and stengthening the country’s balance-of-payments position Thus, as of yearend 1984 inllation had decltned to 50.8 percent from 63.8 percent in October 19A. A balance-ofpayments surplus of $258 million was recorded in 1984 compared with the previous year’s deficit amounting to $2,068 million.
This report covers briefly the fiscal and administrative phasee of operations of the Department and its bureaus and offices from July 1, 1961 to June 30, 1962.
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