Changes

====Today's Economy====  

====Today's Economy====  

GDP grew by 5.4% in 2006, marking the first time since the 1970s with three consecutive years of growth over 5%. Historically, the Philippines has had difficulty sustaining growth at over 5%. GDP increased by 6% in 2004, a 15-year high, and by 5% in 2005. Growth in 2006 was fueled by increased electronics exports, growth in the outsourcing industry, and a 20% increase in remittances from overseas workers to $12.8 billion and about 11% of GDP. GDP growth is expected to finish 2007 closer to the upper end of the government's targeted 6.1%-6.7% growth range. Still, it will take a higher, sustained economic growth path to make more appreciable progress in poverty alleviation given the Philippines' annual population growth rate of nearly 2%--one of the highest in Asia.  

GDP grew by 5.4% in 2006, marking the first time since the 1970s with three consecutive years of growth over 5%. Historically, the Philippines has had difficulty sustaining growth at over 5%. GDP increased by 6% in 2004, a 15-year high, and by 5% in 2005. Growth in 2006 was fueled by increased electronics exports, growth in the outsourcing industry, and a 20% increase in remittances from overseas workers to $12.8 billion and about 11% of GDP. GDP growth is expected to finish 2007 closer to the upper end of the government's targeted 6.1%-6.7% growth range. Still, it will take a higher, sustained economic growth path to make more appreciable progress in poverty alleviation given the Philippines' annual population growth rate of nearly 2%--one of the highest in Asia.  

Despite a number of policy reforms and recent good news, the Philippines continues to face important challenges and must sustain the reform momentum to catch up with its regional neighbors and to translate the current cautious optimism into the long-term confidence required to spur investments, achieve higher growth, generate employment, and alleviate poverty for a rapidly expanding population. Absent new revenue measures, sustained fiscal stability will require more aggressive tax collection efficiency to address the severe under-spending in infrastructure and social services in recent years of tight budgets. Addressing delays in power sector privatization remains critical to the long-term stability of public sector finances, ensuring reliable electricity supply, and to bringing down the high cost of power.  

Despite a number of policy reforms and recent good news, the Philippines continues to face important challenges and must sustain the reform momentum to catch up with its regional neighbors and to translate the current cautious optimism into the long-term confidence required to spur investments, achieve higher growth, generate employment, and alleviate poverty for a rapidly expanding population. Absent new revenue measures, sustained fiscal stability will require more aggressive tax collection efficiency to address the severe under-spending in infrastructure and social services in recent years of tight budgets. Addressing delays in power sector privatization remains critical to the long-term stability of public sector finances, ensuring reliable electricity supply, and to bringing down the high cost of power.  

Potential foreign investors, as well as tourists, continue to be concerned about law and order, inadequate infrastructure, policy and regulatory instability, and governance issues. While trade liberalization presents significant opportunities, intensifying global competition and the emergence of low-wage export economies also pose challenges. Competition from other Southeast Asian countries and from China for investment underlines the need for sustained progress on structural reforms to remove bottlenecks to growth, to lower costs of doing business, and to promote good public and private sector governance. The government has been working to reinvigorate its anti-corruption drive, and the Office of the Ombudsman has reported improved conviction rates. Nevertheless, the Philippines will need to do more to improve international perception of its anti-corruption campaign—an effort that will require strong political will and significantly greater financial and human resources.  

Potential foreign investors, as well as tourists, continue to be concerned about law and order, inadequate infrastructure, policy and regulatory instability, and governance issues. While trade liberalization presents significant opportunities, intensifying global competition and the emergence of low-wage export economies also pose challenges. Competition from other Southeast Asian countries and from China for investment underlines the need for sustained progress on structural reforms to remove bottlenecks to growth, to lower costs of doing business, and to promote good public and private sector governance. The government has been working to reinvigorate its anti-corruption drive, and the Office of the Ombudsman has reported improved conviction rates. Nevertheless, the Philippines will need to do more to improve international perception of its anti-corruption campaign—an effort that will require strong political will and significantly greater financial and human resources.

====Agriculture and Forestry====  

====Agriculture and Forestry====