The Philippine economy has emerged asone of the fastest growing economies in East Asia, withgrowth accelerating to 7.1 percent in the third quarter. Theacceleration of domestic demand since the first quarter of2012 reflects the country's strong macroeconomicfundamentals, stronger government finances, and highconfidence in the Aquino government's commitment toreform. Sound macroeconomic fundamentals, as seen in lowinflation, and large current account surpluses and foreignexchange reserves, have continued to shield the economy fromexternal headwinds, while a more diversified export basketallowed total exports to grow, despite the decline inelectronics exports. Overall, the economy is expected toexpand by over six percent this year, up from 3.9 percentlast year. However, more structural reforms are needed tocreate more and better jobs, as the overall labor marketoutcome has been less responsive to the higher economicgrowth. The economy needs to shift from consumption towardsinvestment, both public and private. The special focussections of this update demonstrate that the implementationof such reforms can have high payoffs in terms of jobs andinclusive growth. Finally, by scaling-up and broadeningseveral open government/open data initiatives in thecountry, the strengthening of inclusive institutions wouldbe greatly enhanced, in line with the core principles ofthis government.
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