Philippine Economics
Philippines
I. Crisis
The Philippines entered the crisis on a sound footing relative to its major East and Southeast Asian neighbors (except Indonesia), which commonly experienced economic contraction, especially in the industrial and export sectors. As such, this has been suggested as evidence of the country’s newly gained economic resilience. It must be noted, however, that the Philippines has likewise not experienced the spectacular economic performance of its neighbors in recent times, which saw their per capita incomes more than doubling during the past three decades. In contrast, per capita income in the Philippines today is only roughly one-fifth higher than it was 30 years ago. Even as the crisis badly hit investments and exports, which fueled rapid growth in East Asia’s “early globalizers”, it is highly unlikely that it would wipe out the region’s economic and social gains during the period. On the other hand, because the Philippine economy has missed the opportunities for economic growth in recent decades, the country has a rather weak capacity to cushion the impact of the crisis on the poor, whose number have increased substantially in recent years even before the onset of the crisis. The proportion of the population deemed poor rose from 31.3percent in 2000 to 33.0 percent in 2006 despite the increase in GDP per capita of about 2.7 percent a year during the same period.
While the economy has escaped recession, substantial erosion in human welfare is likely to occur given past failure to reduce poverty. The country’s GDP fell sharply from 7.1 percent in 2007 to 3.8 percent in 2008 and 0.9 percent in 2009. Considering the country’s rapid population growth rate of 2 percent a year, this means the per capita GDP in the Philippines for 2009 had a negative growth of 1.1 percent.
II. Background of 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
I. Crisis
The Philippines entered the crisis on a sound footing relative to its major East and Southeast Asian neighbors (except Indonesia), which commonly experienced economic contraction, especially in the industrial and export sectors. As such, this has been suggested as evidence of the country’s newly gained economic resilience. It must be noted, however, that the Philippines has likewise not experienced the spectacular economic performance of its neighbors in recent times, which saw their per capita incomes more than doubling during the past three decades. In contrast, per capita income in the Philippines today is only roughly one-fifth higher than it was 30 years ago. Even as the crisis badly hit investments and exports, which fueled rapid growth in East Asia’s “early globalizers”, it is highly unlikely that it would wipe out the region’s economic and social gains during the period. On the other hand, because the Philippine economy has missed the opportunities for economic growth in recent decades, the country has a rather weak capacity to cushion the impact of the crisis on the poor, whose number have increased substantially in recent years even before the onset of the crisis. The proportion of the population deemed poor rose from 31.3percent in 2000 to 33.0 percent in 2006 despite the increase in GDP per capita of about 2.7 percent a year during the same period.
While the economy has escaped recession, substantial erosion in human welfare is likely to occur given past failure to reduce poverty. The country’s GDP fell sharply from 7.1 percent in 2007 to 3.8 percent in 2008 and 0.9 percent in 2009. Considering the country’s rapid population growth rate of 2 percent a year, this means the per capita GDP in the Philippines for 2009 had a negative growth of 1.1 percent.
II. Background of 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