The Philippines has recently (and repeatedly) been dubbed as Asia’s newest “investment darling”.
Last year, CNBC Asia tagged the Philippines as “Asia’s New Darling of Investors” after the country became the fastest-growing economy in Southeast Asia and Philippine stocks posted a Top 10 performance in 2012 compared to other stock exchanges worldwide.
Analysts have always pointed to the country’s “sound economic fundamentals” as reason for foreign investors’ sudden shift in attention to the Philippines.
The Huffington Post has taken notice of the same when it published an analysis of the Philippine economic environment last year:
“[The Philippines] is enjoying an ‘era of moderation’: interest rates are at around 4 percent, inflation is barely above 3 percent, and the debt-to-GDP ratio is at a historic low — allowing considerable space for borrowing and monetary easing.
This sound economic environment explains why even “Dr. Doom” Nouriel Roubini has identified the Philippines as among the most resilient of key Asian economies in terms of responding to a major global shock. According to the Roubini Global Economics report, the country has considerable monetary-fiscal wiggle room to respond to growing volatility in the center-economies (i.e., euro zone, U.S., Japan, and China) and geopolitical uncertainties in the Persian Gulf.”
Gross Domestic Product (GDP) Annual Growth Rate
Indeed, the Philippines seems to be ahead in terms of economic fundamentals compared to its regional peers. As seen in the following statistics related to Gross Domestic Product (GDP), GDP growth rate and GDP per capita income, the Philippines — barring future obstacles — is on its way to becoming Asia’s next tiger economy.
Gross Domestic Product or GDP is the market value of all final goods and services produced within a country during a certain period. Analyzing the year-on-year growth rate can show whether a country’s economy is contracting or expanding.
In the past quarters, the Philippines has been hailed as fastest growing in Southeast Asia.
Philippine GDP growth rate, as of 2nd Quarter 2013
Yesterday, August 29, the government announced that the country booked another stellar growth of 7.50%.
This is now the fourth consecutive quarter that the Philippines has grown its GDP by more than 7%. If the trend continues, the country can easily eclipse the government’s growth target of 6-7% this year.
The Philippines’ 2nd Quarter 2013 GDP growth is at par with China’s 7.5% GDP growth, but is the fastest growing among all Southeast Asian economies.
Here’s a comparative summary of the GDP growth rates of Southeast Asian countries.
Nominal Gross Domestic Product (GDP)
The size of a country’s GDP shows how big the economy is of a particular nation. Looking at the table below, the Philippines may not be as big yet as the other Southeast Asian countries but it is fast catching up in terms of nominal GDP.
GDP per capita (PPP)
Because of the size of a country’s population, looking at the nominal GDP data alone may not be fully effective in understanding the dynamics of an economy. A standard economic measure used to make GDP data comparable is the GDP per capita, computed as total nominal GDP divided by the country’s population.
The per capita income may be seen as the average income of the people in that country or, alternatively, the amount of economic activity contributed by each member of the population. Of course, the higher this number, the better the position is of the country. That’s why countries with high per capita income are normally considered advanced or rich countries.
Here’s a list of Southeast Asian countries and their corresponding per capita income.
Source: World Bank, Trading Economics, Bloomberg
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