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

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Core Views

*Real GDP growth in the Philippines accelerated from 5.8% y-o-y in Q215 to 6.0% in Q315, as strong domestic demand more than offset export weakness. Domestic resilience should persist, informing our expectations for the Philippine economy to remain on a sound footing despite growing external challenges. Accordingly, we are forecasting real GDP growth to come in at 5.7% and 6.0% in 2015 and 2016, respectively.

*Following the decision by the Bangko Sentral ng Pilipinas (BSP) to keep its benchmark interest rate unchanged at 4.00% at its December monetary policy meeting, we are forecasting the central bank to stand pat over the course of 2016, as the Philippine economy should remain in a growth-inflation sweet spot. That said, potential economic risks stemming from a worsening of the external environment and upcoming elections, as well as inflation risks arising...

Philippines Operational Risk Coverage (9)

Philippines Operational Risk

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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

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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

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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

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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

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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 (21)


Philippines Agribusiness

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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

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Philippines - Q1 2016

BMI View: Double-digit vehicle sales growth will continue over our forecast period 2016-2019 with average growth of 31%.This growth will be driven by robust domestic demand in the economy,which is fuelling private consumption, increasing GDP per capita and easy access to vehicle financing options....
Strong Growth Momentum to Continue
Passenger Vehicle Sales

Commercial Banking

Philippines Commercial Banking

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

Consumer Electronics

Philippines Consumer Electronics

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BMI View: The Philippines consumer electronics market has strong growth prospects over the medium term as incomes rise, enabling vendors to tap into the opportunity presented by relatively low device penetration rates. Our positive outlook is based on our Country Risk team's view for robust and broad based income growth, which will both deepen the market as households acquire sufficient disposable income for the first time, and ease price sensitivity as the middle class expands. We forecast the overall market will grow at a CAGR of 6.8% 2016-2020 to reach USD9.2bn in 2019. While the core scenario is for strong growth, there is downside due to regional economic uncertainties that could undermine device demand...

Defence & Security

Philippines Defence & Security

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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

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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

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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...

Information Technology

Philippines Information Technology

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BMI View: The Philippines IT market is forecast to maintain a trend of strong growth over the medium term based on the supportive economic environment. We envisage a CAGR of 10.2% over 2016-2020 to a total value of PHP314.1bn in 2020, making the Philippines an outperforming market in the Asia Pacific alongside other markets with relatively low exposure to depressed commodities markets such as Vietnam and India. A trend of rising household incomes will support a deepening of the retail market, while the expanding middle class increases the scope for wider margins to vendors. This economic trend will also result in buoyant enterprise confidence that will boost spending on software and services. While the core scenario is...


Philippines Infrastructure

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BMI View: The positive outlook for Philippines' construction sector is supported by growth in public construction activity as the government's Public-Private Partnership programme gains traction, as well as sustained momentum in private construction activity. The upcoming elections in 2016 will weigh on construction activity.

Forecast And Latest Updates

  • We maintain a positive outlook for the Philippines and forecast the construction sector to register real growth of 10.9% in 2015 and 8.5% in 2016.

  • Our positive outlook over the near-term is underpinned by a pickup in public infrastructure projects, as well as a stable monetary policy, amid steady momentum for private construction.

  • We expect the government's Public-Private Partnership program to continue gaining traction over the...


Philippines Insurance

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BMI View: Though currently relatively small by global standards, the insurance industry in the Philippines does offer significant future growth potential. Life insurance is already well established and set to benefit from steady improvements in household income rates and life expectancy which will boost demand for a range of retirement and later-in-life savings products. The smaller non-life sector also stands to benefit from wider domestic economic growth and demand for key lines such as motor and property will remain strong. As such, premiums written in the market are expected to increase steadily over the medium term and beyond. The c...

Medical Devices

Philippines Medical Devices

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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

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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

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BMI View: Stagnant production and rising consumption will ensure that the Philippines remains a net importer of both crude oil and refined fuels over 2015-2024. The start-up of LNG imports in 2016 via the Pagbilao LNG terminal will free domestic gas demand to surpass production, paving the way for greater gas use in several sectors including power, industrial and the residential sectors.

Headline Forecasts (Philippines 2013-2019)
2013 2014 2015f 2016f ...


Philippines Petrochemicals

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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

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BMI View: Healthcare access in the Philippines has improved through the expansion of the country's universal health insurance scheme and the proposed 2016 government budget will aid further expansion. The country's growing population, increasing disease burden (particularly cancer and cardiovascular diseases) and rising acceptance of affordable generic drugs, will drive growth in the pharmaceutical market. However, pharmaceutical firms seeking to capture the commercial opportunities from the large unmet medical need in the Philippines's oncology space will face challenges, as undiagnosed cancer cases remain high and many advanced treatments still require out of pocket payment.

Headline Expenditure Projections...


Philippines Power

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BMI View: We expect robust growth in the power sector in the Philippines, with total generation expected to expand by an average by 4.9% during our 10-year forecast period to 2024. 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 2014-2020)

Real Estate

Philippines Real Estate

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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

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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

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BMI View: Despite external economic headwinds, we believe the Philippines will sustain its strong GDP growth rate in 2016, driven by robust private consumption. The Philippines households will benefit from rapid wage growth, large and stable inflows of remittances as well as expanding consumer credit market. That said, consumer spending will remain largely concentrated on essential goods and services, as the overall levels of income are still very low, especially in the country's rural areas.

Headline Household Spending
e/f = BMI estimaet/forecast. Source: BMI,...


Philippines Shipping

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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

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BMI View: Operators will aim to derive revenue growth from growing mobile data usage trends, leveraging the Philippines' strong economic growth potential to introduce premium value added services (VAS) and data-heavy mobile applications. To this end, both Philippines Long Distance Telephone (PLDT) and Globe Telecom have tied up with over the top (OTT) video streaming platforms such as iflix, HQ and Netflix. However, smartphone ownership and slow speeds are key enablers that need to be addressed.

Quality Networks Will...

Latest Philippines Articles

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Latest Philippines Blogs

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  • 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...


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