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3. Structural policy country notes 3. Structural policy country notes Philippines GDP growth rates (percentage change) A. Medium-term economic outlook 2012-16 (average) 2019-23 (average) (forecast, 2018-23 average) 8 GDP growth (percentage change): 6.6 7 Current account balance (% of GDP): -0.1 6 Fiscal balance (% of GDP) (central government): -2.3 5 4 B. Medium-term plan 3 Period: 2017-22 2 Theme: Aims to lay a stronger foundation for inclusive 1 growth, a high-trust society, and a globally competitive 0 economy toward realising AmBisyon Natin by 2040 Philippines ASEAN-10 Emerging Asia average average C. Basic data (in 2017) Source: OECD Development Centre, MPF-2019 . Total population: 101.0 million (in 2015)* Population of Metro Manila (NCR): 12.9 million (in 2015)* GDP per capita, 2017 Nominal GDP (US dollar): 313.6 billion** (PPP, current international dollar) GDP per capita at PPP: 8 360.4 (current Philippines International Dollar)** Exchange rate in the first half of 2018 (period average): 52.0 (PHP/USD) ASEAN-10 average Emerging Asia average Note: * Population data are year-end government estimates based on 2015 Census. OECD average ** IMF estimate. Sources: OECD Development Centre, national sources, 0 10 000 20 000 30 000 40 000 50 000 CEIC and IMF. Source: IMF. Composition of exports, 2017 Composition of imports, 2017 (percentage of total exports) (percentage of total imports) Others Others 16% 17% Machinery/ Mineral products Chemicals and electrical 3% allied industries 40% Machinery/ 8% Transportation electrical 5% 64% Metals Metals 8% 6% Vegetable Mineral products Transportation products 6% 12% 15% Source: Trademap. Source: Trademap. Structural policy challenges discussed in previous editions of the Outlook Infrastructure Increasing funding for infrastructure development and attracting more private participation Education Improving the access to, and the quality of, basic education, and strengthening technical 2011/12 education and vocational training Taxation Reforming the tax system by enhancing tax collection and widening the tax base Infrastructure Improving road transportation and power and energy infrastructure, and strengthening public and private investment 2013 Job creation Focusing sharply on job-creation strategies Education Improving access to quality education and training by strengthening the K+12 programme Job creation Creating more jobs for sustainable poverty reduction Disaster-risk management Building holistic disaster-risk reduction and management capacities to reduce vulnerability to 2014 natural hazards Develop Mindanao Improving agricultural productivity and transport infrastructure in Mindanao ECONOMIC OUTLOOK FOR SOUTHEAST ASIA, CHINA AND INDIA 2019: TOWARDS SMART URBAN TRANSPORTATION © OECD 2018 159 3. Structural policy country notes Structural policy challenges discussed in previous editions of the Outlook (cont.) Competitiveness Sustaining economic growth by stepping up the country’s global competitiveness through quality employment Financial system Striving to put in place a responsive, development-oriented, and inclusive financial system to 2015 serve as a platform for efficient management and the mobilisation of resources Social development Further improving social development to make sure all Filipinos benefit from equal opportunities when it comes to having a decent job, acquiring assets, and enjoying higher living standards Job creation Encouraging faster job creation 2016 Infrastructure Strengthening infrastructure and the transport sector Disaster-risk management Improving disaster-risk management Infrastructure Investing in infrastructure improvements 2017 Job creation Targeting faster growth in the services sector to create new jobs Foreign direct investment (FDI) Eliminating hurdles in a bid to attract more FDI 2018 Infrastructure Optimising infrastructure financing Recent developments in policy areas covered by previous editions of the Outlook Job creation • In August 2018, a bill that strengthens enforcement of occupational safety and health hazard standards was passed into law. The bill, which updated the labour engagement standards and the penalty scheme for violations, was initially filed in 2004. • In May 2018, Executive Order 51 was signed to prohibit certain contracting and subcontracting practices. These include hiring employees for only 5 months and then replacing them with another batch for five months to circumvent rules on labour regularisation, labour-only contracting wherein a contractor or subcontractor recruits and supplies workers for a principal to perform duties that are directly related to the primary business of the principal. Infrastructure • In August 2018, the Asian Development Bank (ADB) approved a USD 300 million loan to the Philippines, in order to enhance the country’s framework of public- private partnership arrangements. ADB noted that the Build, Build, Build programme is estimated to require a total USD 168 billion in investments for 75 high-impact priority projects nationwide. Disaster-risk management • In August 2007, the government launched a catastrophe risk insurance programme with the help of the International Bank for Reconstruction and Development (IBRD) and the UK Department for International Development. The coverage amounted to USD 206 million for 25 participating provinces. Claims are triggered when certain conditions are met while risk is transferred from the government public insurance company to a panel of international insurers through IBRD. • In a statement from July 2018, the Department of Interior and Local Government backed the transformation of the National Disaster Risk Reduction Management Council, which is currently under the Department of National Defense, into a full fledged executive department. This is in line with the President’s message in his third State of the Nation Address that called for the passage of a law creating a Department of Disaster Management. Legislative bills pushing for such proposal had already been filed in both houses of Congress in mid-2017. • In October 2018, the House of Representatives approved the bill creating the Department of Disaster Resilience bill on final reading. The bill gives the new 160 ECONOMIC OUTLOOK FOR SOUTHEAST ASIA, CHINA AND INDIA 2019: TOWARDS SMART URBAN TRANSPORTATION © OECD 2018 161 3. Structural policy country notes 3. Structural policy country notes department the power to oversee and co-ordinate ex-ante and ex-post disaster- related measures, evaluate disaster and climate resilience initiatives and lead the development of adaptation and mitigation strategies. Counterpart bills are pending in the Senate for deliberations. Competitiveness • In August 2018, the Department of Trade and Industry launched the Project One initiative which aims to provide prospective investors with a portal to access the complete list of requirements and the process of doing business with local government units. The initiative is in line with the Ease of Doing Business and Efficient Government Service Delivery Act of 2018 and was announced on the occasion of the 6th Regional Competitiveness Summit. • In August 2018, the Senate leadership revealed its aim of passing the bill on 14th month pay before the end of 2018. The bill, which was filed in June 2016, will mandate companies that fit the stipulated criteria to pay additional 2 months- worth of salary to their employees every year. In December 1975, the 13th month pay was instituted by virtue of a Presidential Decree. • In August 2018, the Philippine Identification System Act was signed into law. The Law provides a legal basis for the national identification (ID) system, allowing Filipinos to avail of government and private sector services using a single ID card. The Philippine Statistics Authority is tasked to oversee the system to be supported by the Department of Information and Communications Technology. An inter- agency PhilSys Policy and Coordination Council was created to craft the policies and guidelines. Financial system • In April 2017, the central banks of Philippines and Thailand signed a letter of intent to pursue a cross-border banking arrangement in line with the ASEAN banking integration framework (ABIF). ABIF was endorsed by the central banks in December 2014 and was contained in the 6th Package of Commitments on Financial Services implementation protocol under the ASEAN Framework Agreement on Services signed in March 2015. • In June 2018, the International Financial Corporation (IFC) under the World Bank floated the first multilateral agency-backed Philippine peso-denominated green bond. The debt paper called Mabuhay bond had a tenor of 15 years and raised about USD 90 million in capital, which IFC intends to invest in the optimisation programme of the privately owned Energy Development Corporation. • In July 2018, BSP has approved business operations of two new cryptocurrency exchanges, increasing the number of exchanges in the country to five. Prior to the BSP decision, Cagayan Economic Zone Authority conveyed that it is also in the process of giving licenses to a number of cryptocurrency-oriented businesses, e.g. exchanges, mining and ICO. In February 2017, BSP published Circular No. 944 that set the guidelines for virtual currency exchanges. • In September 2018, BSP signed a memorandum instructing financial institutions authorised to offer electronic financial and payment services to make fund transfers via PESO.Net and/or InstaPay available through its e-channels by 30 November 2018. PESO.Net and InstaPay are