The Philippines is a promising country, offering significant potential to investors. Its exports are moving away from agriculture towards higher value manufactured goods. The country has a virtually untapped mineral-rich south, which could be more accessible if political progress in the region continues on the right track.

Our coverage – using our unique Total Analysis model – ensures that our clients make well-informed investment decisions in the Philippines. Our teams keep them informed of the latest market moves and political developments as part of our 'top-down' and 'bottom-up' perspective. We also provide in-depth analysis of the Philippines’ 21 most important industries. Our winning combination of interactive data and forecasting, alongside our risk-assessed and results-proven analysis, will ensure that you, as one of our clients, are always one step ahead in the Philippines.

Country Risk

Philippines Country Risk

BMI View:

Core Views

* The Philippine economy is well positioned to maintain its strong growth trajectory over the coming quarters on the back of booming domestic services and construction sectors, and we maintain our forecast for real GDP growth to come in at 6.0% in 2016. Q116 GDP data marked a continuation of the economy's domestic resilience in the face of a difficult external environment, with real GDP growth accelerating to 6.9% following a 6.3% pace in Q415.

* We expect the Bangko Sentral Pilipinas (BSP) to keep its new benchmark interest rate on hold at 3.00% throughout the remainder of 2016, as the balance between modest inflation and strong growth remains ideal. Risks to this forecast are roughly in balance, including a prolonged and worse than expected El Nino (which could potentially lead to rate hikes to curb inflationary pressures) and a stagnation in growth as a result of political...

Philippines Operational Risk Coverage (9)

Philippines Operational Risk

BMI View:

BMI View: The geographic composition of the Philippines as a country comprising a range of islands across a large area, offers both considerable logistics difficulties, as well as some advantages, for investors. On the one hand, transport and utilities networks are disjointed and vary island by island, and generally require considerable investment in order to meet the needs of supply chains and industries. On the other hand, reliance on maritime trade has resulted in the development of excellent connections to global trade routes, which significantly reduces lead times and costs for exporters and importers. However, port congestion remains a major concern, and we highlight that inadequacies in the internal logistics network, which are exacerbated by extreme weather events, continue to pose risks to supply chains and business...

Philippines Crime & Security

BMI View:

The Philippines poses considerable security threats to international investors, and we hold a generally bearish outlook in regards to criminal, terrorism, and interstate conflict risks.

Petty crimes, particularly those to the person, remain a pertinent issue in the Philippines, affecting both locals and foreign tourists and business travellers. Organised crime is also an issue, with foreign criminal gangs, particularly from China, Hong Kong, and Taiwan, operating in the country. As with most countries of the world, but especially emerging markets, official crime statistics understate the true level of crime. The Philippine National Police (PNP) is limited in its capacity to respond and assist victims of crime due to a lack of response vehicles, radios, and other essential equipment. Moreover, corruption is a major problem in the Philippines. According to Transparency International's Global Corruption Index, 69% of Filipinos consider the...

Philippines Labour Market

BMI View:

The Philippines is a country with huge potential to be one of the premier destinations as a market for labour, with a large population and growing pool of educated workers. However, it frequently underperforms the rest of the Asia region across a number of indicators in our Labour Market Risk Index, with competitive labour market countries such as India able to undercut its low minimum wages to attract investors. Overall the Philippines scores a total Labour Market Risk ranking of 47.2 out of 100 in our Labour Market Risk Index.

One area in which The Philippines looks set to perform well is through its high production of English-speaking, science, engineering and ICT graduates, which has resulted in an a boom in companies looking to outsource work to the Philippines, preferring the accent of Filipino-English speakers to that of the Indian accent. Unemployment and underemployment remains high, with a potentially large pool of workers available...

Philippines Logistics

BMI View:

Two of the worst risks facing incoming businesses are the limited reliability and comparatively high costs for utilities and fuel, and the inadequate and poorly maintained transport networks. However, these risks are mitigated by the comparative ease of trading to and from the Philippines, and the limited costs and bureaucracy which make the country an attractive destination for companies reliant on imports or focused on trade. With an overall score of 55.7 out of 100, placing it in 16th place regionally in our Logistics Risk Index, it is clear that there are a number of detrimental factors increasing the operational risks facing potential investors and businesses considering entering the Philippines.

We believe that with greater reform and investor awareness, the Philippines may fulfil its potential in South East Asia in the near future. Private consumption growth will follow investment growth, resulting in an increase in containerised goods...

Philippines Trade & Investment

BMI View:

BMI believes that there are a number of trade opportunities in the Philippines, but highlight that risks remain fairly pertinent. The country scores 43.7 out of 100 in our Trade And Investment Risk ranking, placing it in 15th position out of its 29 Asian peers. This puts the Philippines just ahead of Vietnam and Kiribati, but behind Fiji and China.

While the Philippines still lags behind its regional peers in terms of foreign direct investment (FDI) inflows, we believe that the country will soon catch up, owing to its strong macroeconomic fundamentals, an ongoing improvement in its business environment, a possible relaxation of its foreign ownership rules which could act as a catalyst, and its increasingly stable political climate.

The country's banking sector outlook is relatively positive, as we expect healthy demand for loans, combined with steady remittance inflows, improving governance, and...

Philippines Industry Coverage (23)


Philippines Agribusiness

BMI View:

BMI View: We hold a positive view on the Philippines' agribusiness sector in the long term, given the country's potential for expansion into new sectors, such as palm oil. We particularly like the outlook for sugar production and believe the livestock sector will continue to show healthy growth rates. The Philippines' vast consumption market, along with strong government support, will foster domestic and foreign investment and favour output expansion. However, backyard farming and infrastructure problems, especially transport costs, will continue to hamper the sector's growth. These inefficiencies will become increasingly crippling as South...


Philippines Autos

BMI View:

BMI View: Robust private consumption and a booming construction sector will translate into growing demand for both passenger vehicles and commercial vehicles. We therefore forecast growth of 23.6% in vehicle sales in 2016, reaching 356,758 units sold by year end.

Strong Growth Momentum to Continue
Philippines - Vehicle Sales By Segment, Units
f = BMI forecast. Source: AAF, BMI

Key Views

  • Robust...

Commercial Banking

Philippines Commercial Banking

BMI View:

Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

Consumer Electronics

Philippines Consumer Electronics

BMI View:

BMI View: The Philippines is deeply connected to the global consumer electronics industry as a major supplier of intermediate components, and as incomes have risen it has increasingly become a growth opportunity for the sale of finished products. Our bullish household income growth outlook for the Philippines is the basis for a strong device demand growth forecast that we believe will benefit vendors through first time buyers, a significant opportunity given low device penetration rates in some key categories, as well as an easing of price sensitivity in the mid and high-end local market. We forecast the overall market will grow at a CAGR of 7.0% 2016-2020 to reach USD9.17...

Defence & Security

Philippines Defence & Security

BMI View:

BMI View: Rising tensions with China have seen the Philippines significantly increase defence spending with the aim of revamping their military assets. Relations with China have further deteriorated following territorial disputes in early 2014. In addition, the Southeast Asian country is facing new internal threats by insurgent groups, especially Abu Sayyaf. These developments will therefore drive an increase in budget allocation towards defence spending by the government, which will reach USD3.4bn in 2015. The lack of a clear strategic defence spending policy, however, and the under-developed domestic defence manufacturing sector, will open up opportunities for international companies but limit them within the country.

The Philippines...

Food & Drink

Philippines Food & Drink

BMI View:

BMI View: Sustained private consumption growth, combined with a young and sizeable consumer base, will drive sales of food and drink throughout our forecast period to 2019. Nonetheless, operational challenges, combined with the huge dominance of San Miguel Corporation, continue to hold back foreign investment, thereby hampering sector dynamism.

Headline Industry Data (local currency)

  • 2015 food consumption (local currency) growth: +4.9%; compound annual growth rate (CAGR), 2014 to 2019 = +5.8%.

  • 2015 alcoholic drinks sales (local currency) growth = +5.8%; CAGR to 2019= +6.5%.

  • 2015 soft drinks sales (local currency) growth = +8.6%; CAGR to 2019 = +7.7%.

  • 2015 mass grocery retail sales (local currency) growth = +6.6%; CAGR to 2019 = +6.5...

Freight Transport

Philippines Freight Transport

BMI View:

BMI View: Overall, 2016 will be a year of mixed growth across the Philippine freight transport industry, with air freight set for a robust expansion, while road haulage will be more sedate. External headwinds will weigh on exports, but strong domestic demand and investment should support continued volume growth.

The outlook for the Philippines' trade remains mixed, in large part due to a sedate regional environment which is impacting upon demand from the country's major neighbouring trade partners. Deteriorating regional demand conditions will weigh on export performance in the Philippines, acting as a drag on the Philippine economy and adding downside pressure on the peso. Mounting concerns over the Chinese economy following the People's Bank of China (PBOC)'s cumulative...

Philippines Freight Transport

BMI View:

BMI View: We expect strong growth across most of the Philippines' freight transport sector in 2016. The relatively underdeveloped air and rail freight sectors will outperform, although growth in road freight - which is far more developed - will be slow at just 2.1%. Slowing growth in key regional trade partners presents a challenge, but this will be offset by strong domestic demand and increasing regional integration through the ASEAN network.

The Philippine economy expanded at a 6.3% y-o-y pace in Q415, taking full-year real GDP growth to 5.8%. The result was slightly higher than our forecast for a 5.7% expansion, and speaks to the Philippines' underlying domestic resilience in the face of an increasingly difficult external environment. We retain a constructive view on the Philippine economy over the medium-term, and maintain our forecast for a 6.0% expansion in 2016 as fiscal...

Information Technology

Philippines Information Technology

BMI View:

BMI View: A strong economic outlook, and specifically a migration of households up the income scale, are expected to add momentum to the Philippine IT market over the medium term and we forecast a CAGR of 10.6% over 2016-2020 to a total value of PHP314.08bn in 2020. We consider the Philippines to have the potential to outperform in the Asia Pacific alongside other markets with relatively low exposure to depressed commodities markets such as Vietnam and India. We also have a positive assessment of industry development potential, particularly for business process and software development outsourcing, but the electronics industry has a slightly less bright outlook.



Philippines Infrastructure

BMI View:

BMI View: The outlook for Philippines' construction sector remains positive, but the presidential election will weight on construction activity, which has led us to downgrade our forecast for the construction sector in 2016 - with growth now expected to be 7.5%.

Latest Updates And Structural Trends

  • Our outlook for Philippines' construction industry remains positive and we forecast real growth of 7.5% and 8.9% in 2016 and 2017 respectively. The presidential election poses downside risks to our outlook as it will result in project delays and could lead to a review or even cancellation of planned and ongoing development projects. The victory of Mar Roxas, Grace Poe and Miriam Defensor-Santiago would most likely bring continuity in terms of PPP projects, whereas that of Jejomar Binay and Rodrigo Duterte would bring change.

  • ...


Philippines Insurance

BMI View:

BMI View: We retain our positive view of the Philippines' insurance sector, which offers significant growth potential - and are not altering our forecasts this quarter. Life insurance should benefit from higher household incomes. Good pricing power on the part of property insurers (and increased volumes) will drive growth in that sub-sector and for the non-life segment as a whole. Both the life and the non-life segments should benefit from the generally favourable economic environment.

Headline Insurance Forecasts (Philippines 2013-2020)
2013 2014 ...

Medical Devices

Philippines Medical Devices

BMI View:

BMI View: We expect the Philippines medical device market to achieve a solid 8% growth per annum to 2019 with modernisation projects for hospitals and other healthcare facilities being the key driver of growth. Much of this demand will continue to be met by imports and it is worth noting that these will continue to vary by region, with the capital and surrounding areas still providing the best prospects for growth.

Projected Medical Device Market, 2014-2019
Total (USDmn) Per Capita (USD) Total (Local Currency mn)


Philippines Mining

BMI View:

BMI View: Mining output in the Philippines will continue to be severely affected by softening of Chinese demand for key mined metals, including nickel, copper and gold. Weakness in global prices for these minerals will deter investment in Philippines mining in the short-term; however, we maintain that the industry is well positioned for longer term growth as foreign miners look to take advantage of the country's sizeable and relatively untapped deposits, as well as low operating costs.

2015e 2016f

Oil & Gas

Philippines Oil & Gas

BMI View:

BMI View: Falling natural gas and condensates output at the Malampaya field is unlikely to be replaced by other significant sources of oil and gas production; the Philippines' dependence on crude oil, refined fuels and LNG will deepen over the next 10 years.

Headline Forecasts (Philippines 2014-2020)
2014 2015e 2016f 2017f ...


Philippines Petrochemicals

BMI View:

Basic chemicals output reported strong growth in 2015 as a result of increasing output at JG Summit Petrochemicals Corporation's new cracker complex. Although plastic and rubber also reported increases in output volumes, this did not raise the value of production, as lower naphtha prices were transferred through the product chain in a saturated market.

In the first nine months of 2015, the value of basic chemicals output soared 44.7% as production grew at the Philippines' new cracker, which has capacities of 320,000 tonnes per annum (tpa) of ethylene, 189,000tpa propylene, 218,000tpa of pyrolysis (biomass) gasoline, 150,000tpa of fuel gas and 28,000tpa of fuel oil. The cracker unit is feeding a 185,000tpa polypropylene plant and a 300,000tpa polyethylene plant.

The Bataan Refinery upgrade 2 project also came into full operation in Q215 with a new fluid catalytic cracker unit,...

Pharmaceuticals & Healthcare

Philippines Pharmaceuticals & Healthcare

BMI View:

BMI View: The Philippine pharmaceutical market is relatively small considering its large population and disease burden. Low government spending on healthcare, which falls below the WHO's global standards, and low-income levels limit opportunities for innovative drugmakers. The expansion of universal healthcare in the country will strengthen access to medicines and drive sales over the long term, particularly for the generic drug sector. However, the successful expansion of healthcare is largely dependant of the country's economic and political stability, with the newly elected president Duterte ushering in a period of uncertainty.

Headline Expenditure Projections

  • ...


Philippines Power

BMI View:

BMI View: We expect robust growth in the power sector in the Philippines, with total generation expected to expand by an average of 4.7% during our 10-year forecast period to 2025. With recovery from the 2013 typhoon gathering pace, reasonable domestic economic growth and a range of new projects being announced, overall the future is looking positive for the Philippine power market.

Headline Power Forecasts (Philippines 2015-2021)

Real Estate

Philippines Real Estate

BMI View:

BMI View : The Philippine economy has remained resilient in the face of the Chinese economic slowdown and falling global demand. Strong local consumption, supported by rising employment and incomes, ensures that the economy remains on a growth trajectory and that the outlook for commercial real estate remains bright. In particular, the office and retail segments should provide opportunities for new players.

We forecast real GDP growth of 6% in 2016, up from 5.7% 2015, amid higher government spending that will spur activity in the private sector. The economy also benefits from remittances from Filipinos working overseas and the thriving local business process outsourcing (BPO) industry. However, external challenges come from the slowing Chinese economy, a looming rise in interest rates, the stronger US dollar and weaker Chinese yuan, which will dampen investor appetite....


Philippines Renewables

BMI View:

BMI View: Renewable energy continues to be a key strategy in the government's fight against climate change. As one of the five major investors in geothermal energy, we believe this sector to be largely saturated providing strong investment potentials elsewhere, particularly in the wind and solar segments, backed up by governmental FiT programmes. We therefore expect these two sectors to carry the bulk of non-hydro renewable growth in our forecast up until 2024. Forecast expansion rates are, however, undermined by several obstacles related to an inadequate national grid, a volatile-business environment and a strong market dynamic for cheaper coal power paired with high electricity prices that have led to a lack in political commitment to follow through on ambitious renewables targets.

Renewables Headline Forecasts (Philippines 2014-2020)...


Philippines Retail

BMI View:

BMI View: We expect the Philippines to sustain its strong GDP growth rate throughout 2016 and into 2017 on the back of robust private consumption. Inward remittances will remain high as the number of Filipinos working overseas continues to climb while income levels will continue to improve, particularly in the country's urban areas. Despite this, the vast majority of spending will remain concentrated on essential goods and services, with food & drink consuming more than a third of the household budget.

Headline Household Spending


Philippines Shipping

BMI View:

BMI View: We anticipate 2016 to be a good year for the Philippines' port sector, with growth to further build up from positive 2015 figures. Economic development and regional trade expansion are increasing trade volumes. Meanwhile, infrastructure investment has temporarily resolved congestion issues and planned projects will provide further accommodation for rising throughput over the medium term. Also contributing to our positive outlook, the Cabotage Act signed in 2015 lowers entry barriers for foreign shipowners, boosting shipping activity in the country.

Over 2016-2019 ...


Philippines Telecommunications

BMI View:

BMI View: Telstra and San Miguel Corp 's plans to pool their strength for the launch of a third mobile network have not materialised. We believe the regulator's lack of power in providing support to the new entrant, coupled with the duopolistic market power of the incumbents, proved to be barriers to entry. We maintain our long-held view that the Philippines' market would progress at a much faster pace with added competition from a third player, the absence of which means there is little incentive for Philippines Long Distance Telephone Company (PLDT) and Globe Telecom to develop better services.

Quality Networks Will Expedite Mobile Data Adoption
Philippines Mobile Market Forecasts (...


Philippines Tourism

BMI View:

BMI View: The Philippines has high hopes for its tourism industry and our outlook is similarly optimistic. The country is investing in domestic and international transport infrastructure, improving accessibility for tourism destinations and expanding international flight route. There are also far reaching and effective marketing campaigns for the sector. The hotel market is attracting significant international investment and new hotels are under development, broadening the availability of high quality accommodation in established emerging areas. These measures will support steady...

Latest Philippines Articles

Latest Philippines Blogs

  • Rising geopolitical tensions in the South China Sea and East China Sea betw...

  • Chinese stocks are clearly in a world of their own, and warrant a significa...

  • Current tensions between Vietnam and China demonstrate the rising geopoliti...

Latest Philippines Podcasts

  • BMI expects global mining M&A to pick up over the coming quarters....

  • As China endeavours to revamp its industrial structure, it will become...

  • South East Asia was a major outperformer in 2012, with the ASEAN 10 ec...


Download PDF

By submitting this form you are acknowledging that you have read and understood our Privacy Policy.

Thank you for your interest

You will shortly receive your free executive summary by email.