iangle contains a
small, yellow, five-pointed star representing the three major
geographical divisions of the country: Luzon, Visayas, and Mindanao;
the design of the flag dates to 1897; in wartime the flag is flown
upside down with the red band at the top

Economy Philippines

Economy - overview:
The Philippines was less severely affected by the Asian financial
crisis of 1998 than its neighbors, aided in part by its high level
of annual remittances from overseas workers, and no sustained runup
in asset prices or foreign borrowing prior to the crisis. From a
0.6% decline in 1998, GDP expanded by 2.4% in 1999, and 4.4% in
2000, but slowed to 3.2% in 2001 in the context of a global economic
slowdown, an export slump, and political and security concerns. GDP
growth accelerated to about 5% between 2002 and 2006 reflecting the
continued resilience of the service sector, and improved exports and
agricultural output. Nonetheless, it will take a higher, sustained
growth path to make appreciable progress in the alleviation of
poverty given the Philippines' high annual population growth rate
and unequal distribution of income. The Philippines also faces
higher oil prices, higher interest rates on its dollar borrowings,
and higher inflation. Fiscal constraints limit Manila's ability to
finance infrastructure and social spending. The Philippines'
consistently large budget deficit has produced a high debt level,
and this situation has forced Manila to spend a large portion of the
national government budget on debt service. Large unprofitable
public enterprises, especially in the energy sector, contribute to
the government's debt because of slow progress on privatization.
Credit rating agencies have at times expressed concern about the
Philippines' ability to service the debt, though central bank
reserves appear adequate and large remittance inflows appear stable.
The implementation of the expanded Value Added Tax (VAT) in November
2005 boosted confidence in the government's fiscal capacity and
helped to strengthen the peso, making it East Asia's best performing
currency in 2005-06. Investors and credit rating institutions will
continue to look for effective implementation of the new VAT and
continued improvement in the government's overall fiscal capacity in
the coming year.

GDP (purchasing power parity):
$443.1 billion (2006 est.)

GDP (official excha