Ironically, that's largely because it's been putting less focus than many of its neighbours at developing exports, the hallmark of thrusting, tiger economies.

As a result, private consumption accounts for over 70% of Philippine GDP, and a vibrant consumer market has helped cushion the effect of a collapse in external demand.

Merchandise exports accounted for 29% of the Philippines' GDP in 2008, which is considerably lower than Thailand, Malaysia, Singapore and Vietnam, where they accounted for over 50% of respective GDPs.

Agriculture and fishing remain important in the Philippines, with an 18.3% share of GDP and 35% of employment. These sectors have, significantly, been virtually unaffected by the external economic environment.

Happily, unemployment has been stable despite the financial tsunami; it has remained at around 8% of GDP in 2009, which is similar to 2008 but far better than the 14% rate seen in 2004.

Fears that a sharp decline in the economic vigour of developed countries would result in job losses for Philippine overseas workers never materialised.

So, the all-important remittances which are equivalent to 10% of GDP and underpin consumer spending only suffered a temporary dip.

Booming BPO sector

Another sector which is lending support to the Philippine economy is the country's steadily growing service exports, particularly the business process outsourcing (BPO) which currently employs some 400,000 people.

The Philippines enjoys a sustainable competitive advantage in receiving outsourcing jobs from the developed, English-speaking world.

While India is strong at information-technology-related outsourcing work, the Philippines has over 60% of its BPO work in voice-related business and therefore doesn't compete head-on with India.

A vibrant BPO industry not only helps increase quality employment, with people earning higher wages in a sustainable way, but also boosts other parts of the economy.

For example, a burgeoning BPO industry has revitalised the construction sector, as demand surges for multi-storey BPO offices and other infrastructure development. This also underpins the retail sector.

As a result business confidence has rebounded from a four-year low in the first quarter of 2009 and has kept on rising.

Strong spending power

The spending power in the Philippines is one of the highest among ASEAN countries despite its low per capita income of US$1,866 in 2008, and relatively small middle class in percentage terms.

In fact, the Philippines has the second highest population in ASEAN, with 90 million people. Its middle class at 14.8 million is not much smaller than Malaysia's at 16 million.

Aside a sizeable middle class able to afford to spend on imported, branded items, the country also has sophisticated, organised retail distribution channels.

Shopping malls sprawl across Metro Manila and frequenting the malls is an activity common to many middle-class Filipinos.
The Mall of Asia, a flagship shopping mall built by the country's leading mall operator, SM Prime, is one of the largest of its kind in Asia.

Service exports a small component

There are attendant risks and challenges in the Philippines which Hong Kong companies thinking of entering the market should look out for.

Although service exports are strong, they represent a fairly small component of the economy, accounting for 8% of GDP in 2008, compared with 29% for merchandise exports. These exports will struggle to compensate for any further deterioration in the manufacturing sector.

Also, while remittances are still strong, some importers have noted that consumers are buying less, either because they are waiting for better bargains or simply saving for a rainy day.

Having said that, the Philippines appears to be on a stronger footing than many of its ASEAN peers, thanks to its high level of domestic consumption. Those in search of market diversification are likely to find the country an unusually promising market.

For more details, see the forthcoming HKTDC Research report: "The Philippines – A Resilient Consumer Market in ASEAN" (http://www.hktdc.com/bookshop).