Jim Whitney Economics 311
Country report 3: macroeconomic sample data for the Philippines

Here is some possibly useful information I've found for the Philippines. You can edit the table information if you want to use the table for your own country (use only what works for you and feel free to use a different approach). I would never use all of the data in my report, but it gives me plenty to work with.

     1. Hardcopy data from International Financial Statistics, April 1999:
Item
Line
Philippines
U.S.
1996
1997
1998
1996
1997
1998
Exch.Rate, avg (pesos/$)
rf
26.216
29.471
40.893
---
---
---
Exch.Rate, end (pesos/$)
ae
26.288
39.975
39.059
---
---
---
Treasury Bill Rate
60c
12.34
12.89
15.00
5.04
5.07
4.82
Consumer Prices
64
177.8
186.7
203.5
120.0
122.9
124.8
Unemployment Rate
67r
NA
NA
NA
5.4
5.0
4.74
Current account ($bill)
78ald
-3.953
-4.351
+.3334
-135.4
-155.4
-160.64
Government budget 
80
+.006
+.002
-.050
-110.8
-2.4
+54.9
GDP
99b
2171.9
2423.6
2662.4
7661.6
8110.9
8510.7
Real GDP
99b.p
1269.2
1334.8
1328.4
6544.8
6802.1
7064.3
Values calculated from data:
E ($/peso)  
.03814
.03393
.02445
---
---
---
R (E Pph/Pus)  
.05651
.05154
.03987
---
---
---
US return (%)  
12.021
-25.76
17.70
5.04
5.07
4.82
Inflation rate (%)  
8.42
5.0
9.0
2.92
2.4
1.5
CAB (billion pesos)  
-103.6
-128.2
+13.64
---
---
---
   % of GDP  
-4.8
-5.3
+0.54
-1.8
-1.9
-1.94
Gov't budget, % of GDP  
0.0
0.0
-0.0
-1.4
-0.0
+0.6
Real GDP growth (%)  
5.83
5.2
-0.5
3.93
3.9
3.9
1: Exchange rate, end of 1995: 26.214 (1996 return = (1.1234× 26.214/26.288)-1 = 12.02%. 
2: 1995 Consumer prices: Philippines: 164.0; US: 116.6 
3: 1995 real GDP: Philippines: 1191.1; US: 6308.4 
4: Through September 1998.

    2. Exchange-rate changes over time: Exchange Rate Plot Interface (Pacific): Used to graph the exchange rate of Philippines peso versus the dollar from 1995-1999. To replicate for your country: (1) Time Period: Uncheck the 2 check boxes, set the start date for, say, 1 Jan 1991 (the Philippines data went back only to 1995). (2) Base Currency: select your country's currency. (3) Frequency: select "monthly averages."

    3. Exchange-rate policy:  IMF 1998 Annual Report: Appendix 1 and 2: Open the file. Select "Tools | Find" to search for "II.16" and then for your country. The Philippines was listed under the "independently floating" category.

    4. Macro and exchange-rate policy analysis: U.S. Department of State, Country Reports on Economic Practice and Trade Reports:  1998 reports are listed, but the most recent report that I could download was for 1997. Relevant items from the report: (1) the Philippines has a low savings rate (23%) which would contribute to its negative CAB. (2) the Philippines limited ER variability from late 1994 until mid-July 1997.

    Some observations about the Philippines from the data:
    CAB: Deficits until after currency crash of 1997--a surplus followed for 1998.
    ER: Currency depreciated sharply in 1997.
    Why? (1) PPP: the Philippines has experienced somewhat more inflation than the U.S., but its currency depreciation exceeds the differential, so the real exchange rate for the Philippines has fallen. (2) The U.S. return on T-bill investments in the Philippines has been variable, exceeding the U.S. rate in 1996 and 1998, but with a large loss in 1997. The persistently higher return may reflect fear of continuing depreciation or a persistent risk premium on investments in the Philippines.
    Macroeconomic policy: Generally sound, especially for a developing country. (1) Budget deficits have not been a problem. (2) Inflation, while above the U.S. rate, has been in single digits.
    Exchange rate policy: (1) Floating ER since mid-July 1997. Increases its policy autonomy, particularly for its monetary policy. In an NFI-NX diagram, the loss of foreign confidence in the Philippines economy in 1997 would have shifted NFI right, causing real depreciation and, most likely, a rise in NX (the data confirm this and could be plotted in the diagram). (2) A major currency collapse in 1997 shows some evidence of overshooting. (3) Exchange controls have been removed by the Philippines in the 1990s.
    Policy recommendations: Retain floating ERs to avoid a recurrence of the 1997 crisis. Policy fundamentals appear strong; excessive inflation has been avoided without resorting to fixed ERs. Some analysts would recommend some restrictions on short-term capital flows.