The Philippines quarterly updateprovides an update on key economic developments and policiesover the past three months. It also presents findings fromrecent World Bank work on the Philippines. It places them ina longer-term and global context, and assesses theimplications of these developments and other changes inpolicy for the outlook for the Philippines. Its coverageranges from the macro-economy to financial markets toindicators of human welfare and development. It is intendedfor a wide audience, including policy makers, businessleaders, financial market participants, and the community ofanalysts and professionals engaged in the Philippines.Though the revised gross domestic product (GDP) growthestimates show small deviation from the old base year andmethodology, the revision has resulted in a nominal GDPwhich is 6 percent larger and hence, lower fiscal statisticsas a percentage of GDP (e.g., lower tax effort, but improveddebt ratio), but also important sectoral growth changes.Investment is now noticeably higher due to improved coverageand transfer of items previously booked under consumption(e.g., military goods) the investment-to-GDP ratio in 2010is now 20.5 percent instead of 15.6 percent. The demand sidegrowth continues to post a remarkable uptick in investment.Investment grew by 37 percent year-on-year and contributed6.8 percentage points to GDP growth, mostly driven bydurable equipment and private construction. Privateconstruction grew by 22 percent, albeit at a slower pacethan the preceding three quarters, and compensated for thecontraction in public construction which shrank by 37.3percent due to continued fiscal tightening and a high baseeffect. Investment in durable equipment grew 17 percent withthe building up of inventory in industrial machineries androad vehicles.
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