Economic Crisis and Response in the Philippines
Economic Crisis and Response in the Philippines
The Global Economic Crisis pulled countries down from around the globe to a recession. Wide-ranging declines in many aspects of growth characterize the overall impact it had had on the global scale. Following the Asian economic crisis in 1997, the present global economic crisis imposes new challenges to the Philippines as a developing country. Following are expositions of the macroeconomic impacts of the crisis in the Philippine setting, its implications in the prevalent poverty scenario, and policies and programs undertaken by the government in response to the crisis.
Overview of the Global Economic Crisis
The 2008 global economic crisis started upon the bursting of the US housing bubble, which was followed by bankruptcies, bailouts, foreclosures, and takeovers of financial institutions and national governments. During a period of housing and credit booms, banks encouraged lending to home owners by a considerably high amount without appropriate level of transparency and financial supervision. As interest rates rose in mid-2007, housing prices dropped extensively, and all institutions that borrowed and invested found themselves suffering significant losses. Financial institutions, insurance companies, and investment houses declared either declared bankruptcies or had to be rescued financially. Economies worldwide slowed during this period and entered to a recession. The crisis, initially financial in nature, has now taken a full-blown economic and global scale affecting every country to the left and to the right of the United States, and wreaking havoc in the level of both industrialized and developing nations.
The Philippine Situation before the Crisis
The Philippines has long been undermined with long-term structural problems such that sustainable economic development is yet to be a dream come true. According to the pages of Philippine economic history, the country has been dominated by a sequence of growth
The Global Economic Crisis pulled countries down from around the globe to a recession. Wide-ranging declines in many aspects of growth characterize the overall impact it had had on the global scale. Following the Asian economic crisis in 1997, the present global economic crisis imposes new challenges to the Philippines as a developing country. Following are expositions of the macroeconomic impacts of the crisis in the Philippine setting, its implications in the prevalent poverty scenario, and policies and programs undertaken by the government in response to the crisis.
Overview of the Global Economic Crisis
The 2008 global economic crisis started upon the bursting of the US housing bubble, which was followed by bankruptcies, bailouts, foreclosures, and takeovers of financial institutions and national governments. During a period of housing and credit booms, banks encouraged lending to home owners by a considerably high amount without appropriate level of transparency and financial supervision. As interest rates rose in mid-2007, housing prices dropped extensively, and all institutions that borrowed and invested found themselves suffering significant losses. Financial institutions, insurance companies, and investment houses declared either declared bankruptcies or had to be rescued financially. Economies worldwide slowed during this period and entered to a recession. The crisis, initially financial in nature, has now taken a full-blown economic and global scale affecting every country to the left and to the right of the United States, and wreaking havoc in the level of both industrialized and developing nations.
The Philippine Situation before the Crisis
The Philippines has long been undermined with long-term structural problems such that sustainable economic development is yet to be a dream come true. According to the pages of Philippine economic history, the country has been dominated by a sequence of growth
References: Marcos Administration (1981-1985)[edit source | editbeta] The tax system under the Marcos administration was generally regressive as it was heavily dependent on indirect taxes Ramos Administration (1993-1998)[edit source | editbeta] The Ramos administration had budget surpluses for four of its six years in power Arroyo Administration (2002-2009)[edit source | editbeta] The Arroyo administration’s poor fiscal position was attributed to weakening tax effort (still resulting from the 1997 CTRP) and rising debt servicing costs (due to peso depreciation)