Last year, the economy grew at 5.4 per cent, up from 5.1 per cent growth the previous year, and is expected to grow even faster in 2008 at 5.5 per cent.
The country’s 2007 budget has been approved by Congress, ensuring that the government will receive funds of around US$23 billion to spend on priority projects on health, education and infrastructure. This is expected to continue to attract foreign and local investments in the country.
Commitments to establish new and expand existing business ventures jumped 18.5 per cent from 2005 to 2006. The country’s Department of Trade and Industry said the growth reflected investors’ confidence in the country’s fiscal position, as a result of strict implementation of programs on improving cash flow and revenue collection.
The Philippine stock market closed 2006 at a 10-year high. In fact, it was one of the best performers in Asia. The Philippine peso, on the other hand, is on a six-year high as of year end. These trends are expected to continue in 2007.
Inflation fell to 4.4% year on year last December, bringing average inflation for the whole of 2006 to 6.3%. The fall in inflation over the past year is largely the result of falling food prices, reflecting a rebound in agricultural production. Inflation is expected to remain low in 2007 and 2008.
The search for new oil and gas deposits in the country is expected to continue in 2007 according to the Department of Energy (DOE), with a series of seismic and drilling activities being planned for 2007.