Philippines and Vietnam Economy

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Republic of the Philippines

TAGUIG CITY UNIVERSITY
Gen. Santos Ave., Upper Bicutan, Taguig City

COLLEGE OF ENGINEERING, TECHNOLOGY AND COMPUTER SCIENCE

Principles of Economy with Taxation and Agrarian Reforms
Xeres Yvonne O. Quimora

A Comparative Study
Of Philippines and Vietnam’s
Economy

Laserna,Marknel S.
Caraig, Ma. Joy Angeline E.
Serrano, Ismerald
BSCS-C32 Morning

Philippines Vietnam
Economic and social environment
Philippines
The Philippines is a large country, with high population density, and a population growth rate relatively higher (2.2 percent per year in 1990-94) then the SEA standard. The ratio of urban population is high. The country spends a sizeable proportion of government budget, 16 percent in 1993, on education; and literacy rate is more than 80 percent. In the beginning of the 70s, the Philippines was one of the richest countries in Asia, next only to Japan and Malaysia, with an economic growth of around 5-6 percent per year. The economy started sliding down after that, and in 1980-85 it registered a negative growth rate of -1.88 percent per year. There has been a revival since then. In the latter half of the 90s, growth has picked up to 5 percent per year. The major reason for the economic decline lies in faulty economic policies: current account imbalances were rising, inflation could not be curbed, and external debts reached 90 percent of GNP. There was a clear urban bias in the development expenditure, land reforms were implemented only halfheartedly. External factors, particularly the terms of trade for its exports, were also adverse. Political instability was an additional handicap. All these resulted in slow growth of economy, and slow change in the sectoral composition in terms of the contribution to GNP and in terms of occupational diversification. Share of agriculture in GNP declined only marginally, from 25 percent in 1985 to 22 percent in 1995. Inflation was high and real wages declined. Income inequality continued to be high, the Gini coefficient being 0.53. As a result, the poverty ratio did not decline to any substantial extent: from 52 percent of the total number of households in 1971 to 45 percent in 1991. There was an increase in the absolute number of the poor population. Poverty is more widespread in the rural than in the urban areas. There is a distinct regional bias in the incidence of poverty; the extent of poverty is much higher among the small farmers growing rice, coconut and sugarcane. Economic reforms have been introduced since the mid-80s, and the economy has responded well. As in the case of other SEA economies, the danger spots include the growing burden of external debt, introduction of large amounts of 'hot money' and the large concentration of imported raw materials in non-conventional exports. From the point of view of the poor, the explicit urban bias, the bias towards capital intensive industries, and the continuing hegemony of large landholders in the countryside are the unfavorable features. Vietnam

Vietnam is a socialist country that has made a smooth transition from controlled to market-oriented economy. It is one of the poorest countries of Asia, with an estimated per capita income of US$200 per year. An equally remarkable fact is that it has made impressive gains in GNP in the last few years, especially after the mid 80s, and rate of growth of GNP is about 10 percent per year. Population growth is rather high at 2 percent per year, but it is slowing down. With the fast rate of economic growth, some structural change inevitably takes place. This is evident in Vietnam but the change has been slow. There has been a marginal shift of workforce from agriculture, from 73 percent in 1980 to 71 percent in 1990. There is a more marked shift in the contribution of agriculture to GNP. The other major achievement of the economy is the control of inflation which has been substantially brought down from 70 percent to 15...
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