Steep - Philippines

STEEP analysis

Social factor

The Philippines had an estimated population of 88.6M in August 2007. The rate of population growth has been slowing in recent decades (according to national sources), from an average of 3% per year in the 1960s to 2.1% in the 1990s. This reflects two trends: a fall in the birth rate and a fall in the death rate as infant mortality rates have declined. Thus the crude birth rate fell from 46 per 1,000 in 1960 to 30 per 1,000 in 2000 (when the last census was held) as family planning became more widely accepted. Population density is high in metropolitan Manila and neighboring areas of central Luzon, whereas Mindanao, Negros and the other southern islands are sparsely populated. There has also been substantial migration out of the Philippines, permanent and also temporary (in the form of overseas employment under contract), which has held down both the population resident in the Philippines and the rate of unemployment. Education standards are fairly high in Philippine. Healthcare provision is inadequate. UNDP data show that the Philippines had only 58 doctors per 100,000 people in 2000. To some extent, as in the case of education, this reflects budgetary constraints.

Technological factors

The transport infrastructure is inadequate, having suffered from decades of underinvestment. During the 1990s some of the most serious shortcomings began to be tackled, and a number of infrastructure projects are currently under way, but development has been concentrated in economic hubs. The telecommunications system used to be inadequate and unreliable, and telephone density stood at only 1 per 100 people in the mid-1980s. The deregulation of the sector in 1993 transformed the situation. Presidential decrees mandated interconnections between networks and required that international gateway operators and mobile telephone companies install telephone systems in urban and rural areas. There were estimated 7.8m Internet users as of March 2005, according to Internet World Statistics, a market research company, but ownership of personal computers is limited to wealthy urban households. The e-commerce market in the Philippines is therefore small.

Economic factors

The economy is marked by great disparities: in ownership of assets, in income, in levels of technology in production and in the geographical concentration of activity. The National Capital Region (NCR), centred on Manila, contains 13% of the population and generates more than one-third of GDP. The retail sector was, for many decades, closed to foreign participation. This was nominally to protect small corner shops from foreign competition, but the ban acted to keep the bulk of retail trade small-scale, much of it in the informal sector. The 2000 Census of Philippine Business and Industry showed that in 1999 the Philippines had 298,764 retail outlets (excluding retail trade in motor vehicles), employing 1.2m people. However, a trend was established in the late 1980s and 1990s for the development of large shopping complexes, many of them in the vicinity of Manila and geared towards the higher incomes in this region. Foreign-exchange reserves steadied to US$12bn-14bn in 1999-2001 following a sharp fall during the regional financial crisis of 1997-98, and remained around this level until early 2005.