As for Philippine inflation, data shows that it continued to decline to 2.4 percent in the first two months of 2015, mainly due to lower fuel prices and modest increases in food prices. Inflation will accelerate to 3.3 percent in 2016 due to higher world prices for oil and other raw materials. Philippine exports are expected to grow faster than imports, pushing the current account surplus to 4.0 percent of GDP in 2015.
In 2016, the current account surplus is projected to fall to 3.6 percent of GDP as oil prices rise. Quarter-on-quarter growth momentum failed to gain traction in 2014 as the rate of expansion slowed from 0.9 percent in the first quarter to 0.4 percent in the fourth quarter, mainly due to subdued domestic demand for the Sewol -ferry disaster.7 Figure 4 shows the demand side contributions to South Korean GDP growth. South Korean GDP growth is likely to pick up a bit to 3.5 percent in 2015, as global output and trade begin to stir.
GDP growth is expected to further increase to 3.7 percent in 2016, supported by the strengthening of the global economy. Despite the low growth of exports, the current account surplus is expected to grow to 7.0 percent of GDP in 2015 due to the sharp drop in global oil prices and despite the deficit in services.
Main Policy Challenge for the Philippines
Indeed, the revised macroeconomic data suggest that the economic outlook for both the Philippines and South Korea is broadly positive, with low and stable inflation expected to support GDP growth. The following sections unfold the main policy challenges facing the Philippines and South Korea. Sharma boldly declared that the Philippines was no longer a joke, as President Aquino seemed likely to generate enough reform momentum to get the job done.11.
An electronic copy of his book can be downloaded here: https://muftbooks.files.wordpress.com/2014/12/. In the context of Sharma's work, if "breakout" means that the Philippines is finally breaking away from past performance patterns and graduating from its shameful status as an economic laggard, then perhaps there is some truth in this statement about the country. , which macroeconomic statistics can support. Given its long history as the country's commercial hub, Metro Manila developed at a faster pace than other cities in the country.
He has written an article on urbanization and economic growth, which can be viewed here: http://www.businessmirror.com.ph/. The main lesson in this story about Luzon's regions is that the process of urbanization and growth can be replicated in other urban areas in the country to bolster current economic growth and minimize regional disparities. So it is quite reasonable to assume that the persistent poverty in the Philippines is due, at least in part, to this unusual structural growth pattern.
However, the economic history of the Philippines suggests that it is the willful neglect of the investment climate in agriculture and industry, either as a cause or as a result of the. The 2015 ADO recommends that the Philippines should work to boost investment to sustain economic growth and create more inclusive employment opportunities to reduce poverty. Gross investment in the Philippines has improved recently, but still lags neighboring countries, as Figure 16 shows.
Note: Gross investment (formerly gross domestic investment) consists of expenditure on additions to the economy's fixed assets plus net changes in the level of inventories. In fact, strengthened economic relations with South Korea could potentially benefit the Philippines in several areas. One key area could be infrastructure, which South Korean investors can help build in the Philippines through public-private partnerships.
Another important area is Official Development Assistance (ODA), which could be leveraged for investments that will promote inclusive economic growth in the Philippines. Finally, industrial policy can be considered as another possible area where the Philippines can benefit from strengthened relations with South Korea.
Main Policy Challenge for South Korea
Currently, the bulk of South Korean exports to China are capital goods, such as machinery and transportation equipment, including vehicles. So it is clear that South Korea needs to further diversify its export markets, especially to the fast-growing emerging economies in ASEAN. Incidentally, the commemoration meeting between ASEAN and South Korea in December last year led to calls to boost trade between countries.
While ASEAN was already South Korea's second largest export market in 2013 (accounting for about 15 percent of South Korean exports), ASEAN's rapid economic growth, averaging 5.6 percent during the year, suggests room for further expansion. 29 Figures 30 to 37 detail trade between ASEAN and South Korea, and for the Philippines in particular, the data suggests that there is still considerable scope for increasing its share within ASEAN.30. In contrast, Figure 40 shows that the Philippines has been a net importer since 1990, while Figure 41 shows that it has a trade deficit with South Korea. As suggested by Figures 35 and 37, both countries likely trade heavily in electronics, with the Philippines exporting low-end components to South Korea and then importing high-end finished products from there.
Differences in value added would likely account for a significant portion of the trade deficit that the Philippines runs. Aldaba (2015) argues that attracting more electronic manufacturing service companies will be critical to maintaining the Philippines' position in regional manufacturing networks. In fact, there is a gradual downward trend in the number of imported parts, indicating the need to diversify and upgrade the participation of the Philippine electronics industry in the global value chain by upgrading the market, characterized by a shift from semiconductors to electronic manufacturing services, especially in areas with high growth potential such as are automotive electronics, power electronics, electronic data processing and consumer electronics.
Strengthening competitiveness in semiconductor equipment and electronic manufacturing services will be necessary to transform and deepen the industry's position in the global value chain. Finally, the 2014 South Korea Economic Survey published by the Organization for Economic Co-operation and Development (OECD) mentions the need for South Korea. Perhaps by promoting the free exchange of scientists, scholars and other innovators, South Korea can work more closely with the Philippines in promoting a creative economy.
Since the service sector of the Philippines is also booming, South Korea may also look to this market to meet its domestic needs. As fertility falls, the dependency ratio initially falls because the share of young people decreases while the share of the working age population increases. As fertility levels continue to fall, dependency ratios eventually increase as the proportion of the working-age population begins to decline and the proportion of elderly people continues to increase.
The old age dependency ratio is the ratio of the elderly population (age 65+) per 100 people of working age (age 15-64). Rising old-age dependency ratios put additional pressure on governments to fund pensions and health care.
Conclusion
34;Integrating MSPs into Global Value Chains: Challenges and Policy Actions in Asia." Asian Development Bank Institute. 34;The Philippines in the Electronics Global Value Chain: Upgrading Opportunities and Challenges." Economic Research Institute for ASEAN and East Asia. Official Gazette of the Republic of the Philippines.” Official Gazette of the Republic of the Philippines.
34;Joint Statement of the ASEAN-ROK Commemorative Summit on the 25th Anniversary of ASEAN-ROK Dialogue Relations: Our Future Vision of the ASEAN-ROK Strategic Partnership "Building Trust, Bringing Happiness"." Ministry of Foreign Affairs of Kingdom of Thailand 34; Korean Industrial Policy Trajectories Towards Industrial Cluster Formation." Institute of Developing Economies-Japan Foreign Trade Organization. 34; Getting a Piece of the Pie: The Philippines in ASEAN-South Korea Relations.” Foreign Service Institute.
