MACROECONOMICS OVERVIEW

The Philippines demonstrated significant economic growth – and is still gaining momentum in
recent years. To sustain the current growth momentum and make it inclusive, transforming the
economy becomes crucial. The government developed a new industrial strategy. The overall objective of
the Philippine industrial strategy is to build globally-competitive industries as well as strong domestic
and global linkages.

Currently, there are 12 priority industries identified. To boost growth and make these industries
competitive and productive, several strategic actions/measures have also been identified, such as
addressing supply chain gaps, providing HRD and skills training, developing small and medium
enterprises, considering innovation and upgrading, intensifying investment promotion, and addressing
horizontal issues in infrastructure, logistics, and regulatory processes, among others.

With the continued implementation of the strategic actions and programs and support from
stakeholders, goals that strengthen SMEs, industry and innovation hubs establishment, more and quality
labor generation and labor productivity enhancement, among other aspirations for the industry, can be
achieved.

1. GROSS DOMESTIC PRODUCT

The gross domestic product (GDP) is the total market value of all final goods and
services produced in a particular year, excluding its income from investments in other
countries

In 2022, the Philippine Gross Domestic Product (GDP) posted a full-year growth of 7.6
percent compared to 5.6 percent full-year growth recorded in 2021, according to the data
posted by the Philippine Statistics Authority on January 2023. (Figure 1)

Among the major economic sectors, Industry and Services posted positive growths in
the fourth quarter of 2022 with 4.8 percent and 9.8 percent, respectively. This only shows
that despite of the challenges brought by the pandemic, the Philippine GDP was able to
make a comeback on the fourth quarter of 2022 with a growth of 7.2 percent.
2. AVERAGE INFLATION RATE

The Philippine Statistics Authority reported that the country’s headline inflation rate
marginally slowed down to 8.6 percent in February 2023 from 8.7 percent in January 2023,
as price increases of certain food commodities and energy eased. In February 2022, inflation
was lower at 3.0 percent. The average inflation rate for the first two months of the year
stood at 8.6 percent. (Tables A and Figure 1).
3. DEMAND AND SUPPLY OF TRANSPORTATION AND STORAGE SECTOR

During the first quarter of 2021, the e-Commerce sector accounted for nearly half of the
total demand for warehouses in the Philippines during this period. Demand for warehouses
from this sector was driven by the ongoing coronavirus (COVID-19) pandemic which has
seen growth in online retail.

The preliminary results of the 2020 Annual Survey of Philippine Business and Industry
(ASPBI) showed that a total of 2,940 establishments in the formal sector of the economy
were engaged in transportation and storage activities. This was -3.8 percent lower than the
3,057 establishments in 2019.

Among the industry groups, support activities for transportation posted the highest
number of establishments of 1,441 or 49.0 percent of the total. This was followed by other
land transport with 759 establishments (25.8%) and transport via buses with 220
establishments (7.5%).
 At the regional level, the National Capital Region (NCR) had the highest number of
establishments with 1,611 or 54.8 percent of the total. Central Visayas and CALABARZON
followed far behind with 238 (8.1%) and 235 (8.0%) establishments, respectively.

4. EMPLOYMENT RATE

The total employment of the sector was recorded at 209,919 in 2020, a decrease of -7.8
percent compared with the 227,723 workers in 2019. Of the total, 206,402 workers (98.3%)
were paid employees, while the rest were working owners and unpaid workers.

Industry group-wise, support activities for transportation employed the highest number
of 84,728 workers of 40.4 percent of the total. This was followed by other land transport
with 26,338 workers (12.5%) and transport with 26,338 workers (12.5%) and transport via
buses with 24,251 workers (11.6%).

NCR topped other regions in generating jobs with 130,377 workers or 62.1 percent of
the total. This was followed by Central Visayas and CALABARZON with 22,623 workers
(10.8%) and 14,066 workers (6.7%), respectively.
5. OFW REMITTANCE GROWTH

The number of Overseas Filipino Workers (OFWs) in 2021 was estimated at 1.83 million
which was higher than the 1.77 million estimate in 2020. The number of Overseas Contract
Workers (OCWs) increased to 1.76 million in 2021, from 1.71 million in 2020.

Total remittance sent in 2021 reached 151.33 billion pesos which was higher than the
134.77 billion pesos in 2020. On the average, about 91 thousand pesos remittance per OFW
was sent in 2021, an amount that is much higher than the 87 thousand pesos average
remittance sent per OFW in 2020.