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Business and Market Overview of Philippines

ECONOMY. Philippines’s economy suffered by means of mismanagement under the country’s late president Marcos who ruled the country under martial law from the 1960s to 1980s. To revive the country’s economy, former president Fidel Ramos opened the country to foreign investments in the early 1990s. Throughout Ramos’ term in office, foreign investments increased from only US million in 1992 to US billion by 1997. The Philippines weathered the Asian economic crisis of 1997 in significantly far better shape than a lot of other Southeast Asian countries due to the large number of Filipino overseas workers frequently remitting funds into the country and low external debt.

Philippines’ GDP was US.1 billion with a GDP per capita of US,042 in 2004. The economy of the Philippines grew at annual GDP growth averaging four.6% from 2000 to 2004 contributed mainly by growth in the service sector, agriculture and exports of electronics. Inflation declined from 6.five% in 2000 to 2.five% in 2002 but trended upwards to reach 8.6% by 2004. Unemployment remains comparatively high compared to Thailand, Malaysia and Singapore ranging between 9.8% and 10.9% from 2000 to 2004.

The service sector contributes to half or 52.8% of the Philippines’ GDP in 2004 whilst manufacturing contributed 31.8% and agriculture 15.3%. Major industries consist of electronics, garments, footwear, pharmaceuticals, chemicals, wood items, processed foods, petroleum refining and fishing. Main agriculture products contain sugarcane, coconuts, rice, corn, bananas, cassavas, pineapples, mangoes and seafood.

DEMOGRAPHY. The Philippines comprises of almost 7,100 islands but eleven islands account for 90% of the country’s total population. Principal islands are Luzon and Mindanao accounting for 65% of the population. Other major but less populated islands consist of Negros, Samar, Panay and Palawan. Filipino society and culture is practically homogeneous and 90% of the population are of the Malay descent. Other ethnic groups include the different indigenous tribes and Chinese immigrants. Spanish-Mexican culture brought by the former Spanish colonial rulers who ruled the country from Mexico has an influence of Filipino culture. The country is predominantly Catholic accounting for 81% of the population followed by several Christian denominations (11%) and Islam (5%). Tagalog is the national language and widely spoken across the islands whilst English is predominantly utilized in government and organization.

The proportion of the Filipino population living in the urban areas increased from 49% in 1990 to 62% by 2004. Philippines’ main city is Metro Manila (comprising of the city of Manila and 16 surrounding cities and municipalities) has a population of 10 million. Other key cities consist of Zamboanga, Baguio, Iloilo, Bacolod, Cebu City, Davao and Cagayan de Oro.

The Philippines suffers from a high level of income inequality and an estimated 30% of the population live below the poverty level. Another 50% of the population belong to the low-income group although the remaining 20% belonging to the middle and high-income group. The average income of those living in Metro Manila is twice than the national average.

INFRASTRUCTURE. Telecommunication services inside and between the islands is adequate even though international services is fairly good. Internet broadband coverage is mainly concentrated in the main cities and towns of the islands. The islands are adequately served by roads and road transport. Travels between the islands are by air or coastal boats. All the main islands are served by international and domestic airports and sea ports.

INTERNATIONAL TRADE. Philippines’s exports increased almost 4-folds from 1995 to 2004. Significant trading partners consist of Japan, US, China, Hong Kong, Singapore, Malaysia, Taiwan and South Korea. Major exports from the Philippines contain electronics, garments, optical instruments, coconut goods, fresh produce, copper merchandise and chemicals. Major imports incorporate machineries, equipments, fuel, vehicles, transport equipments, plastics chemicals and food grains.

CONSUMER USAGE OF Technology. The total number of fixed-line telephones installed in the Philippines was 3.4 million or a penetration of 8 fixed-line phones per 100 population in 2004. However, the penetration for mobile phones is much greater at 39 mobile phones per 100 population. The penetration of computers in the country is low estimated at two% of the population whilst the estimated number of world wide web subscribers is 1.two million and net users is 8. million. The average penetration of televisions among households in the Philippines is 71% but higher in the Metro Manila at 96%.

RETAIL Market. There are nearly 360,000 retail establishments and the traditional “mom and pop” stores account for 98% of the establishments. The remaining 2% are the store brands comprising of hypermarkets, supermarkets, department stores, convenience stores and speciality stores. Shopping in these establishments is common amongst middle and high-income buyers. These modern outlets are mostly concentrated in Metro Manila accounting for 30% of the Philippines’ total retail sales. Nonetheless, many store brands are expanding their businesses outside Metro Manila into other key urban areas in Luzon and Mindanao. Between 2004 and 2007 and estimated 3 shopping malls will be built in the Philippines annually.

FOOD CULTURE. Like most countries in Southeast Asia and Northeast Asia, rice is the staple food in the Philippines. Filipino cooking is a blend of sweet, sour and spicy tastes. Indian, Chinese, Japanese, Mexican and Spanish cooking have an influence on Filipino food culture. Traders and immigrants introduced Indian, Chinese and Japanese cooking although the Spanish colonial rulers introduced Mexican and Spanish cooking. Filipinos are also accustomed to western foods specially American style fast foods, bakeries and snacks.

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