Philippines Economy: Booming, But Poverty and Unemployment Remain Problematic
Shortly after my piece on the Philippines' continuing structural economic vulnerabilities, which generated considerable controversy and heated discussions among experts and observers alike, the country’s stock markets managed to record new historic highs — breaching the 7,000 mark and beyond. Meanwhile, Standard & Poor's Ratings Services, following in the footsteps of Fitch Ratings, has just awarded the Philippines with its second credit ratings upgrade — raising hopes of sustained economic boom in the years to come. Vaunting its newly-acquired “investment grade” status, the Philippines — widely celebrated as Asia’s new economic tiger — is poised to access the global investment pool on a wider scale, while benefiting from lower borrowing costs in international markets. In addition, the two main drivers of the country’s recent economic uptick, notably the Business Process Outsourcing (BPO) sector and the multi-billion remittances from Overseas Filipino Workers (OFWs), are expected to post healthy rates of growth in the foreseeable future. So far, so good! The Philippines is no longer the “Sick Man of Asia,” now home to one of the region’s most dynamic economies, but there are still huge challenges in “trickling down” the growing economic pie. The country is benefiting from the “clean governance” initiatives of its top leadership, with ramped-up infrastructure spending fuelling economic expansion, but the current development paradigm is in need of some fundamental re-configurations if it is toaddress rampant poverty, mind-boggling inequality, and double digit underemployment rates in the short- to medium-run. Two important reports in recent weeks seem to be vindicating my earlier concerns with the necessity to institutionalize inclusive and sustainable growth in the country. While the World Bank and the United Nations Economic and Social Survey of Asia and the Pacific (UNESCAP)...
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