In the Philippines, policies that are now aligned formally with globalization started in the mid-1980s. This period saw the Aquino government removing quotas on the entry of imported goods. A series of tariff reductions soon followed, so that from 41% in 1981, tariffs had gone down to only 8% by 2000. As part of finance liberalization, debt subsidies were also abolished.
The liberalization and deregulation of the Philippine economy was intensified in the 1990s. This was a decade when the industries of water transport, telecommunications, banking and shipping, airlines, oil, and retail trade were wholly opened up to foreign investors, without regard to the ability of local enterprises to compete. Since 1991, 100% foreign ownership of enterprises has been allowed in almost all sectors of the economy, except for defense, small-scale mining, cooperatives, mass media, and a few others.
In 1994, the Philippine Senate ratified the General Agreement on Tariffs and Trade; its leading proponent was then Sen. Gloria Macapagal-Arroyo, who became president in 2001 through a people-power uprising.
The Philippines joined the WTO in 1995. Since then, the entire economic policy of the Philippines has had to conform to WTO standards, which now favor the free entry of investments from developed countries into the developing world.
The government plans to implement a single tariff rate of 5% by 2004 and abolish tariffs altogether by 2010.
Inevitably, due to the uneven competition between developing and developed countries under the framework of globalization, Philippine imports have grown faster than exports. According to the Ecumenical Institute for Labor Education and Research (EILER), based on government data, the country’s agricultural trade surplus of $257.6 million per year from 1990-94 descended into an average trade deficit of $756 million per year from 1995.
This decapitalization of the Philippine...