Foreign arms have helped president Duterte (centre) with his 'war on drugs' ©Tass/PA Images
Foreign arms have helped president Duterte (centre) with his 'war on drugs' ©Tass/PA Images

Country spotlight: The Philippines

Supply Management goes globe trotting to evaluate the procurement potential of countries around the world…

POPULATION 101m (as of 2015)

AREA 343,449 km²

ECONOMIC OUTLOOK One of the most dynamic economies in East Asia, the Philippines grew by 6.4% in the first half of 2017, according to World Bank data. The country is still urbanising, has a growing middle class and a large young population. Consumer demand is strong, buoyed by rising incomes. 

BIGGEST INVESTORS A total of 105.6bn pisos ($2bn) of foreign investment was approved by the Philippines’ main investment agencies in 2017, less than half the 219bn pisos ($4.2bn) secured in 2016. The largest contributors included Japan, the US and Singapore.

SUPPLY CHAIN ISSUES Since his election, the Philippines’ gung-ho (and sometimes gun toting) president Rodrigo Duterte has dominated headlines. But while the violent crackdown in the south has drawn a backlash from human rights advocates and the UN, supply chain troubles pre-date his tenure. Abuses have been reported in the extractive industries, agriculture, real estate and tourism. Buyers should do their due diligence.

STRENGTHS Solid growth, low inflation and sound fiscal policies bode well. Duterte has big plans for infrastructure with an ambitious $180bn spending programme that includes a new terminal at Clark International Airport.

CHALLENGES High rates of poverty remain an issue, and the country must ensure growth is inclusive. Duterte has reconciled with China since he came to power, defusing the South China Sea dispute and securing $21bn investment. But China could still cause trouble.

BOTTOM LINE Despite social and political problems, the Philippines remains a regional economic powerhouse and an island of relative calm for business. The road ahead is by no means clear, but should lead to further growth.

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