Business and Market Overview on Philippines

ECONOMY. Philippines’s economy suffered through mismanagement under the country’s late president Marcos who ruled the country under martial law from the 1960s to 1980s. To revive the country’s economy, former president Fidel Ramos opened the country to foreign investments in the early 1990s. During Ramos’ term in office, foreign investments increased from only US$42 million in 1992 to US$2 billion by 1997. The Philippines weathered the Asian economic crisis of 1997 in much better shape than many other Southeast Asian countries due to the large number of Filipino overseas workers regularly remitting money into the country and low external debt.Philippines’ GDP was US$85.1 billion with a GDP per capita of US$1,042 in 2004. The economy of the Philippines grew at annual GDP growth averaging 4.6% from 2000 to 2004 contributed mainly by growth in the service sector, agriculture and exports of electronics. Inflation declined from 6.5% in 2000 to 2.5% in 2002 but trended upwards to reach 8.6% by 2004. Unemployment remains relatively high compared to Thailand, Malaysia and Singapore ranging between 9.8% and 10.9% from 2000 to 2004.The service sector contributes to half or 52.8% of the Philippines’ GDP in 2004 while manufacturing contributed 31.8% and agriculture 15.3%. Major industries include electronics, garments, footwear, pharmaceuticals, chemicals, wood products, processed foods, petroleum refining and fishing. Major agriculture products include sugarcane, coconuts, rice, corn, bananas, cassavas, pineapples, mangoes and seafood.DEMOGRAPHY. The Philippines comprises of nearly 7,100 islands but eleven islands account for 90% of the country’s total population. Main islands are Luzon and Mindanao accounting for 65% of the population. Other major but less populated islands include Negros, Samar, Panay and Palawan. Filipino society and culture is nearly homogeneous and 90% of the population are of the Malay descent. Other ethnic groups include the various indigenous tribes and Chinese immigrants. Spanish-Mexican culture brought by the former Spanish colonial rulers who ruled the country from Mexico has an influence of Filipino culture. The country is predominantly Catholic accounting for 81% of the population followed by various Christian denominations (11%) and Islam (5%). Tagalog is the national language and widely spoken across the islands while English is predominantly used in government and business.The proportion of the Filipino population living in the urban areas increased from 49% in 1990 to 62% by 2004. Philippines’ main city is Metro Manila (comprising of the city of Manila and 16 surrounding cities and municipalities) has a population of 10 million. Other major cities include Zamboanga, Baguio, Iloilo, Bacolod, Cebu City, Davao and Cagayan de Oro.The Philippines suffers from a high level of income inequality and an estimated 30% of the population live below the poverty level. Another 50% of the population belong to the low-income group while the remaining 20% belonging to the middle and high-income group. The average income of those living in Metro Manila is twice than the national average.INFRASTRUCTURE. Telecommunication services within and between the islands is adequate while international services is relatively good. Internet broadband coverage is mainly concentrated in the major cities and towns of the islands. The islands are adequately served by roads and road transport. Travels between the islands are by air or coastal boats. All the major islands are served by international and domestic airports and sea ports.INTERNATIONAL TRADE. Philippines’s exports increased nearly 4-folds from 1995 to 2004. Major trading partners include Japan, US, China, Hong Kong, Singapore, Malaysia, Taiwan and South Korea. Main exports from the Philippines include electronics, garments, optical instruments, coconut products, fresh produce, copper products and chemicals. Main imports include machineries, equipments, fuel, vehicles, transport equipments, plastics chemicals and food grains.CONSUMER USAGE OF TECHNOLOGY. The total number of fixed-line telephones installed in the Philippines was 3.4 million or a penetration of 8 fixed-line phones per 100 population in 2004. However, the penetration for mobile phones is much higher at 39 mobile phones per 100 population. The penetration of computers in the country is low estimated at 2% of the population while the estimated number of internet subscribers is 1.2 million and internet users is 8.0 million. The average penetration of televisions among households in the Philippines is 71% but higher in the Metro Manila at 96%.RETAIL MARKET. There are nearly 360,000 retail establishments and the traditional “mom and pop” stores account for 98% of the establishments. The remaining 2% are the store brands comprising of hypermarkets, supermarkets, department stores, convenience stores and speciality stores. Shopping in these establishments is popular among middle and high-income consumers. These modern outlets are mostly concentrated in Metro Manila accounting for 30% of the Philippines’ total retail sales. However, many store brands are expanding their businesses outside Metro Manila into other major urban areas in Luzon and Mindanao. Between 2004 and 2007 and estimated three shopping malls will be built in the Philippines annually.FOOD CULTURE. Like most countries in Southeast Asia and Northeast Asia, rice is the staple food in the Philippines. Filipino cooking is a blend of sweet, sour and spicy tastes. Indian, Chinese, Japanese, Mexican and Spanish cooking have an influence on Filipino food culture. Traders and immigrants introduced Indian, Chinese and Japanese cooking while the Spanish colonial rulers introduced Mexican and Spanish cooking. Filipinos are also accustomed to western foods especially American style fast foods, bakeries and snacks.

Take in Offbeat Johannesburg in Your South Africa Travel Plans This Summer

To locals, Johannesburg, the largest city of South Africa, is endearingly Joburg or Jozi; and when you are done with your visit to this teeming metropolitan town, there is likely to be a little endearment or two you have in mind for this place yourself.Johannesburg is a vibrant city of great extremes. It has deep roots in European culture as well as African culture; there is business, culture and art of the highest order in its old world atmosphere and its glittering skyscrapers; and there are miles of shantytowns, traffic that knows no laws, and people, people everywhere. The city is home to some of the worst apartheid atrocities ever known of; and it is the home of an inspiring freedom struggle.When you visit South Africa, travel to Johannesburg has to be the highlight of your trip; the city may be a bit dangerous in some of its seedier areas, but most of the places you would want to venture to are pretty great.Let’s cover some of Jozi’s best offbeat attractions in pubs and restaurants, art galleries and everything else. Let’s start with Arts on Main, an exciting bunch of shops, all hidden away in a reclaimed warehouse right in the center of the city. The whole enterprise is a part of the city’s plans to take advantage of the history that the city possesses. There are galleries and little bohemian shops by the dozen that should easily take up a couple of hours spent exploring. Check out for details.If you want a piece of history for your South Africa travel plans this time, try the Market Theater, otherwise known as the Theater of the Struggle. During apartheid times, the theater’s management felt that art could have a great contribution to make to the country’s political struggle, and frequently put up shows that challenged the government’s policies. A visit there today, and you’ll see some of the best that South Africa’s arts and music scene has to offer. Check out for details.Keeping with the apartheid theme, how about a trip out to the suburb of Soweto, a massive place that all blacks in Johannesburg were forced to leave for each evening in the apartheid era, after their work in the city was done? Soweto featured prominently in the country’s freedom struggle, and is home to hundreds of thousands black South Africans. Things aren’t as desperate around here as they once were. The economy in Soweto is booming, and the energy in the air is palpable. It would have to be, what with two Nobel Peace Prize winners living there, on the same street (Vilakazi Street) no less. What South Africa travel plan would be complete without a visit to Nelson Mandela’s home (converted into a museum now)? For a little authentic Soweto cuisine, try the Nambitha Eatery, the Sakhumzi Restaurant and Wandies Place. You could be in for a treat with ox tail stew and other South African delicacies.If you truly want to get in touch with the earth in South Africa, travel to the world heritage site of the Cradle of Humankind. It’s just a half-hour’s drive outside the city, and here you will find stunning exhibits of exactly where it is that the human race came from. The Sterkfontein Caves are a part of the tour, and they contain the oldest fossils of pre-Homosapien primates ever found. Or how about trying the site of one of the lustiest gold rushes ever, the Old Kromdraai Gold Mine?

Understanding the GCC Market Structure

What is a financial market?A financial market is a spectrum term which means a marketplace where buyers and sellers trade in assets in the form of stock, currencies and derivatives. The demand and supply forces determine the price of these assets.Depending on what is traded, there are mainly two types of financial markets:1. Capital market – where securities like bonds, stock, etc. are traded. They are for long-term investment.2. Money market – where high-liquidity items like US Treasury bills, currencies, etc. are traded. They are for short-term investment with equal chances of big gains and big losses.Why is financial market important?The financial markets mobilize domestic savings and foreign capital for productive investments. The economic growth of any country depends on the efficiency of its financial markets. An ineffective financial market would mean that you are not exploiting all opportunities and an inefficient one will cripple you and not let you compete on a global scale.Its level of sophistication:• Encourages Foreign Direct Investment (FDI)• Allows domestic corporations to raise funds for growth and expansionGCC Market Structure OverviewDeveloping their financial markets has been a priority for GCC since 2002. Their vision has mainly been to promote the development of local marketplaces like UAE market structure and Kuwait market structure, and to make the GCC countries a financial hub in the region. With the oil prices dropping and the depletion of the oil reserves, the GCC region has no choice but to diversify its economy for a sustainable growth.Current GCC Market StructureThe Saudi Arabia market structure, though solid (none of the banks collapsed in the aftermath of the Global Financial Crisis in 2008-09), still lacks sophistication. Most domestic companies even now use their retained earnings or traditional bank loans to finance their growth activities. When compared to their Asian and Latin America counterparts, the region forms only 0.8% of the global capital volume says a Deutsch Bank report.The share of GCC countries is even lower with only 1% says an IMF report. The weak share of the UAE market structure is due to the government’s heavy engagement in the economic activities and the weak private sector.In order to measure the financial marketplace development, the ratio of financial assets to the GDP is used. The GCC’s 0.8% share of the global financial market to its 1.7% share in the global GDP shows a skewed size of the financial sector.The Kuwait market structure, however, shows that the financial sector plays a significantly higher role, 14% to be precise, in its share of GDP. For GCC, on a whole, finance chips in only 6% of GDP.The current GCC capital structure shows that not only are the countries behind in terms of economic potential internationally, but also relative to the development in the region.Identified problems with the GCC Market Structure• High banking concentration, especially in the Saudi Arabian market structure, due to limited access for private players. Domestic and public monopoly has led to poor investment environment and restrictive policies. Gradually though, the policies are being revoked to encourage liberalization.• The weak competition which has led to high prices, fewer varieties of financial instruments, poor services, etc.• Stock markets in GCC have been far behind in terms of international standards with a concentration on the largest sector in Saudi Arabia. The stockmarket plays a major role in Saudi Arabia capital structure, contributing to 61% of the total domestic financial asset.• Since it is easy to earn money from government projects, individual entrepreneurship is not supported and financial institutions do not play their part in allocating venture capital and risk.Final wordThough the liberalization and privatization of the GCC market structure are already under way, the GCC region still has to go a long way. Based on an IMF report, they should focus on the following financial sector reforms:• Strengthen demand and supply
• Reduce government participation and open up to foreign competition
• Enhance the bank regulatory and supervisory framework
• Develop efficient and effective capital instruments for financing