The Philippines is a developing country with an agricultural base, light industry, and service-sector economy. It has been listed in "Next Eleven" economies. The Philippines has one of the most vibrant business process outsourcing (BPO) industries in Asia. Numerous call centers and BPO firms have infused momentum into the Philippine market, generating thousands of jobs, including Fortune 500 companies.
The resiliency of the Philippine economy is due to low foreign inflows and an agriculture-based economy allowed it to snap back from international crises as evidenced by 3% growth in 1999 and accelerated to 4% in 2000. By 2004, the Philippine economy catapulted to over 6% growth after the East Asian financial crisis of the late 1990s. President Gloria Macapagal-Arroyo pledged to turn the country into a First World state by 2020. In 2005, the Philippine peso was said to be Asia's best-performing currency.In 2006, the Philippine economy expanded at a rate of 5.4%, higher than of the previous year. The government plans to increase the country's GDP by 7% in 2007. The government forecasts the economy to grow at 9% by 2009.
Strategies for streamlining the economy include improvements of infrastructure, more efficient tax systems to bolster government revenues, furthering deregulation and privatization of the economy, and increasing trade integration within the region and across the world.
On November 1, 2005, a newly expanded value added tax (E-VAT) law was instituted as a measure to bridle the rising foreign debt and to improve government services such as education, healthcare, social security, and transportation. As of 2006, The Philippines' economic prosperity also depends in large part on how well its two biggest trading partners' economies perform: the U.S. and Japan.
Despite the growing economy, the Philippines will have to address several chronic problems in the future. Income inequality remains persistent; about 30 million people lived on less than $2 per day in 2005. China and India have emerged as major economic competitors, siphoning away investors who would otherwise have invested in the Philippines, particularly telecom companies. Regional development is also somewhat uneven, with the main island Luzon and Metro Manila gaining most of the new economic growth at the expense of the other regions.
In 2006, the Philippines experienced its lowest budget deficit in 8 years. President Gloria Macapagal Arroyo said that the nation is "making gains ahead of schedule." The Philippines' target in 2007 is to have a balanced budget. The 2006 budget deficit was at an all-time low of $1.27 billion.
The Philippines is a significant source of migrant workers; as of 2004, the Philippine government has estimated that there are over 8 million Overseas Filipinos while independent estimates by various Philippine civic organizations estimate the number at 11 million. Overseas Filipinos sent home a record $10.7 billion in 2005. The Filipino diaspora is present in 190 nations worldwide.In 2006, Overseas Filipinos remitted $12.8 billion back home and represents an almost 20% increase from the previous year. The government forecast for 2007 that at least $14 billion will be sent to the Philippines by Filipino workers.
The Philippines is a member of the Asian Development Bank, the World Bank, the International Monetary Fund, the Asia Pacific Economic Cooperation (APEC), the World Trade Organization (WTO), the Colombo Plan, and the G-77, among others