SWOT - Phili Phi lippi ppines nes - SWOT - Q4 2014 2014 Philippines - Economy - 03 Jul 2014 Political SWOT ANALYSIS
Strengths
The Phil ipp in es is on e o f Asia 's old est and live lie st de m oc rac ie s. The The current constitution, framed in 1987 following the ousting of dictator Ferdinan d Ma rcos, guarantees 'life, 'life, liberty and p roperty' roperty' in a US-st US-style bill of rights.
Weaknesses
The exe cu tive o ften ften face s del ays ge tting its bills thro thro ug h a le gisla ture dom inated by the the Philippin es' old land ed fam ilies, business tycoon tycoon s and 'showbiz' celebrities. Rumours of military coup plots are frequent. Disaffected junior officers have stage stage d a series of mutinies in recen t years, years, while while the top brass played a dec isive isive role in the 'peop le power' uprisings of 1986 1986 a nd 200 1.
Opportunities
Presiden Presiden t Benign o Aqu ino III of the the Liberal Party has prom ised to to roo t out the excesses of the the prece ding adm inistrat inistration, ion, which co uld h elp to recover resources lost to corruption in past years. Ten tative tative p la ns to to a do pt a pa rlia m en tary-style ary-style c on stitut stitutio io n, a p roc ess referred referred to locally as charter charter chan ge, or 'cha ch a', could red uce the conc entration entration of execu tive po wer. Plans Plans to eventually m ove towards a fede ral struct structure ure would dece ntralise ntralise political power an d very likely improve regional governance. Develop me nt plan s are on the the ca rds following following the governm ent's signing of the the final co mp rehen sive sive pe ace dea l with with the nation's largest Muslim rebel force, the the Moro Islamic Liberation Front. The go vernme nt is also seeking a pe ace a greem ent wit with h the the co mm unist New People 's Army, which also p oses a threat in in the regio n, but progress in the talks talks has bee n slow.
Thre ats
Kidnap pings and bom bings by separatist separatist groups, such such a s the the Abu S ayyaf and the MNLF, are expe cted cted du ring our forecast period . The exi sten sten ce of m ore than 10 0 p rivate m ilitias co ntrolle d b y loc al warlords poses an a dditional secu rity rity risk, risk, as eviden ced by the the Maguindana o ma ssacre ssacre in 2009.
Economic SWOT ANALYSIS
Strengths
Private Private consump tion is a ma jor driver of eco nom ic growth, growth, gene rating rating mo re than than 7 0% of GDP. GDP. A youthful youthful and rapidly expan ding po pula tion is likely to to support these these dynam ics. Hom e-boun d rem itt ittanc es from from the 8m n overseas Filipino workers are a key source source o f national inco me and p rovide mu ch-need ed suppo rt to the the country's consumption and balance of payments.
Weaknesses
Althou Althou gh the go vernme nt has done well to to d ecrea se its its fiscal fiscal deficit (particularly (particularly unde r the the Aq uino adm inistrat inistration), ion), spending inefficiencie inefficiencie s as well as revenue c ollec tion e fficacy fficacy rem ain substantial substantial conc erns. The jo ble ss rate rate will re m ai n h igh as lo ng as e co no m ic g rowth falls sho rt of the the level n eed ed to c reate jobs for the the fastast-expan ding labo ur force.
Opportunities
The go vern m en t co uld ea se pre ssure o n its fiscal a cco un ts by broad enin g the tax tax ba se and elim inating graft at the the Burea u of Internal Internal Revenue. Ou tsourcing c ould provide the Philippines, given its its low-cost low-cost EnglishEnglishspeaking workforce, with with a valua ble source o f foreign excha nge .
Thre ats
Co nce rns persist persist over the the un derpe rforma rforma nce o f revenue collec tion age ncies. Failure to imp rove tax colle ctions ctions will con strain strain further further ratings imp rovem ents, ents, which in turn threatens threatens to curb foreign investme investme nt. nt. The exp ort sector is ge are d toward s ma nu facture d p rod uc ts, espe cia lly elec tronics, which which a re vulnerab le to a weake ning o f the the e xternal xternal econo mic e nvironm nvironm ent since since late late 200 8. On goin g m aritime aritime dispute dispute ove r claims to to pa rts rts of the S outh China Sea raises China sanctions sanctions risk.
Business Environment SWOT ANALYSIS
Strengths
Weaknesses
Opportunities
Thre ats
A low-cost but edu cated, English-speaking English-speaking workforce workforce is the the Philippine s' grea test busin ess st streng th. A num be r of Western Western firms ha ve shifted shifted the ir operations, particularly call centres, to the Philippines. The Phil ipp in es is a m em be r of the the Associ ation of So uth East Asia n Nations Free Free Trade Area, und er which the the a ssocia ssocia tion's 10 mem ber states states are co m m itt itted to red ucin g tariff tariff and n on -tariff -tariff trade ba rriers. Political Political a nd security security conc erns are often often cited cited as reasons no t to to d o business in the Philippines. Much-needed economic reforms remain stalled stalled , while while reb el insurgen cies con tinue in m any pa rts rts of the the coun try. Ageing infrastructure, particularly in the power sector, is a key concern for would -be fore ign inve stors. stors. Effort Efforts s to to attract attract grea ter p rivate fundi ng throug h b uild-operate-t uild-operate-transfer ransfer schem es ha ve m et with with o nly lim ited ited success. The m ove towa rds ou tsou tsou rcin g b y No rth rth Am eri ca an d We stern stern Europ e provides the Philippines with an opportunity to attract greater foreign investment. The Ban gko Se ntral ng Pilip ina s (BSP) is en do rsing l eg islatio n to liberalise foreign ba nk en try. This will will likely increase the the n um ber of foreign ban ks in the the coun try, which ca n he lp to service service the investme investme nt an d finan cing interests interests of fore fore ign direc t inve stors. stors. In turn, turn, this will will encourage more foreign investment. Chin a's rising rising econ om ic influence p resents resents opportunities opportunities to Philippine firms but also threatens to starve the country of much-needed foreign investment. Co rruption rruption rem ains a proble m. Transparen Transparen cy International International ranked the Philippine s 94th 94th o ut of 173 173 cou ntries ntries in its its 2013 Co rruption rruption Perceptions Index.
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