2013-02-03 16:33:39 - Fast Market Research recommends "Philippines Pharmaceuticals & Healthcare Report Q1 2013" from Business Monitor International, now available
BMI View: BMI has revised up its forecast for the Philippines' pharmaceutical market following reassessment of the country's macroeconomic conditions. According to BMI's Country Risk team, the Philippine economy expanded by an impressive 5.9% year-on-year in Q212 due to strong growth from various sectors, such as services and exports. Consequently, we have upgraded the pharmaceutical market forecast. We continue to hold our view that pharmaceutical firms will see short-term opportunities in the Philippines due to ineffective governance of the prices of drugs.
Headline Expenditure Projections
* Pharmaceuticals: PHP126.04bn (US$2.91bn) in total sales in 2011, rising to PHP129.96bn (US$2.89bn) in 2012; +3.1% in local currency terms and +3.3% in US dollar terms. Forecast up slightly from Q412 due to improved macroeconomic outlook.
* Healthcare: PHP364.95bn (US$8.43bn) in sales in 2011 rising to PHP408.26bn (US$9.45bn) in 2012; +11.9% in local currency terms and +12.1% in US dollar terms. Forecast up slightly from Q412 due to improved macroeconomic outlook.
* Medical devices: PHP14.12bn (US$297mn) in sales in 2011 rising to PHP15.11bn (US$350mn) in 2012; +7.0% in local currency terms and +17.8% in US dollar terms. Forecast up slightly from Q412 due to improved macroeconomic outlook.
Full Report Details at
- www.fastmr.com/prod/529449_philippines_pharmaceuticals_healthcar ..
Risk/Reward Rating:. This quarter, the Philippines retained a below-average score of 45.7 out of the maximum 100 points, placing it in14th position out of the 18 regional markets surveyed in Asia Pacific. On the whole, there is evidence that the market is maturing, with some sectors calling for the expansion of the socialised healthcare system to serve the entire nation. It is thought that such changes will boost volume consumption in particular.
Key Trends And Developments
* In September 2012, Novartis entered into a memorandum of agreement with PhilHealth and the National Kidney and Transplant Institute (NKTI), under which PhilHealth members who need a kidney transplant, will have access to evidence-based treatment protocols and high-quality antiorgan rejection medicines. The agreement forms a part of Novartis' support of the PhilHealth Z benefit. This was launched in July 2012 by President Benigno Aquino III to support cancer patients by providing full coverage of their medical expenses - from surgery to post-operation care until therapy.
* In September 2012, the Intellectual Property Office of the Philippines urged the Office of the USTR (US Trade Representative) to clearly state what the country needs to do to be taken off the priority watch list. USTR's Special 301 Report lists countries that have weak intellectual property policies and risk USTR recommending the imposition of trade sanctions. The Philippines will submit a list of 'achievables' to the USTR, which once implemented are seen as helping get the country off the watch list.
BMI Economic View: Following a stronger than expected expansion in H112, we expect the Philippine economy to grow by 5.0% in 2012. However, with pervasive external weaknesses set to undermine the country's previously robust trade outlook, we continue to expect headline growth to retreat over the course of H212, and see GDP growth cooling to 4.4% (up from our previous forecast of 4.0%) in 2013. At the same time, we envisage a strong comeback in fixed capital growth in 2013, and believe that this will mark the beginning of a longer-term resurgence in investment.
BMI Political View: Given the Philippines' multi-party system, no one party is generally able to gain the majority of seats in either the Senate or the House of Representatives. Currently, Benigno Aquino's Liberal Party controls coalitions in both houses, but given that these coalitions are wide-ranging and comprise a many separate parties, this does not give clear control of the policy-making process. That being said, Aquino's popularity through the first three years of his term (Philippine presidents are limited to one six-year term) bodes well for the prospects of both his Liberal Party (LP) and its coalition partners. In an August survey conducted by Social Weather Stations, Aquino enjoyed a net satisfaction rating (the difference between those responding that they were satisfied or dissatisfied with the president) of plus 67, scoring well across all income and geographic groups. The president's popularity is reflective of both the economy's strong performance in 2012 as well as his robust anti-corruption drive in which his administration has targeted some of the country's highest-ranking officials, such as former president and current senator Gloria Arroyo.
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