February 19, 2012
The Philippines is one of eight countries that comprise Southeast Asia. A mass of thousands of islands, the country has been struggling to obtain true democracy and freedom for its citizens. After a review of the political history and demographics of the country, an in-depth analysis of the economic condition of the Philippines will be explored. Appendix A contains a map of the Philippines by different cultural regions. Economic topics will include Fiscal and Monetary policies, as well as a review of the peso. Next, significant economic indicators will be discussed, including unemployment, interest rates, inflation rates, and overall growth. Appendix B provides a graph explaining the Human Development Index (HDI), while Appendix C shows a breakdown of government spending on education. The economic review will end with a look at the Filipino international trade, including imports and exports. The paper will conclude with a summary and a list of recommendations.
A Complete Economic Analysis of the Philippines
Even though the United States (US) is struggling with an unprecedented amount of debt, an 8% unemployment rate, a decrease of “real” Gross Domestic Product (GDP) of approximately 25% since the 1970’s, and an ineffective debate over the arbitrary number of a Debt Ceiling (MSM661 Handouts), Asia is experiencing a great deal of growth, with an increase in GDP by about 5.5% over 2012, and an estimated increase of about 6% in 2013. While very modest compared to Asian standards, it is “enviable by world standards. Asia will remain the Global leader in growth, expanding over 2 percentage points faster than the world average next year,” according to Anoop Singh, head of the Asian and Pacific departments of the International Monetary Fund (IMF) (“Growth in Asia, 2012, p.1). One country that is helping Asia in its growth is the Philippines. This paper will provide an extensive review of the Philippine economy in the following order: I. Economic History and Political Climate
II. Demographics: Population, Poverty rates, Education, Healthcare III. Fiscal and Monetary Policies: Peso Appreciation
IV. Economic Indicators: Overall Growth rates/Credit rating, Inflation rates, Interest rates/ Developing sectors, Unemployment, and GDP V. International Trade – Imports and Exports
After the analysis and a summary, recommendations as a very amateur economist will be given. As one of the leading financial countries in Southeast Asia, the research on the Philippines has provided a wealth of information on the culture, the people and the overall economic condition of a growing nation. Economic History and Political Climate
For too many years the Philippines was regarded as the “sick man of Asia.” (Balisacan, 2012, p.1) In the 1950’s it was economically more advanced than other Asian countries, but “bad governance and misguided economic policies wasted the opportunities for sustained growth…” (Balisacan, 2012, p. 1) Economic History. The country was led by Ferdinand E. Marcos, from 1965 to 1986, before he was overthrown in the “People Power” revolt (Whaley, 2013). Not only had he declared martial law for part of his time in office, he allowed his wife Imelda Marcos to help rule the country in between her lavish shopping trips, while millions of people were suffering in poverty (Whaley, 2013). When Corazon C. Aquino became President in 1986, she was charged with the duty of a world-wide pursuit of the ill-gotten gains – estimated to be about $10 million straight out of the pockets of Filipino’s - by a commission that has been trying to retrieve the assets of the family. After two other Presidents, Gloria Macapagal-Arroyo was elected in 2001, and it was the public’s disillusionment and her unpopularity that helped Mr. Benigno S. Aquino...