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Mark Anthony Aparre Philippine Economy 2015

The Philippines has struggled with economic growth due to issues like unemployment and population growth that have led to widespread poverty. While the country was once wealthy before World War II, it has failed to keep up with the economic expansion of other Asian countries and is now considered a third world country. In recent years, economic growth has slowed to 5.3% due to weak government spending and drops in agricultural production. However, over a million new jobs were created in 2014. Upcoming elections and the risk of less reform-minded leaders pose challenges, but continued reforms and a more educated electorate could help sustain growth that benefits more Filipinos.

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77 views2 pages

Mark Anthony Aparre Philippine Economy 2015

The Philippines has struggled with economic growth due to issues like unemployment and population growth that have led to widespread poverty. While the country was once wealthy before World War II, it has failed to keep up with the economic expansion of other Asian countries and is now considered a third world country. In recent years, economic growth has slowed to 5.3% due to weak government spending and drops in agricultural production. However, over a million new jobs were created in 2014. Upcoming elections and the risk of less reform-minded leaders pose challenges, but continued reforms and a more educated electorate could help sustain growth that benefits more Filipinos.

Uploaded by

Reden Basag Ilok
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Mark Anthony Aparre

Philippine Economy 2015

Philippines has lost its once great wealth due to unemployment issues and unchecked population
growth, among other reasons. The poverty in the Philippines has caused the nation to slow its
economic expansion. If the Philippines does not manage to inflate its economy, it will be stuck in an
economic trap.
"Before WWII, Philippines was considered as one of the richest countries (next to Japan) in
Southeast Asia" (Short). Now, the Philippines is threatened to be trapped in poverty. With the
economic expansion of China and other countries in Asia, Philippines has failed to keep up with
them and is now considered a third world country.
Economic growth slowed down to 5.3 percent in the third quarter of 2014, due to weak government
spending on the demand side and agricultural production on the supply side.
Despite the slowdown, more than a million jobs were created in October 2014, although the quality
of jobs remains a challenge. The 2013 Annual Poverty Indicator Survey (APIS) finds that real income
of the bottom 20 percent grew much faster than the rest of the population. The survey also confirms
that the governments conditional cash transfer program is reaching the poor, as reflected in the
substantial growth of domestic cash transfers to the bottom 20 percent.
The Philippines never had it so good. But with a slowing global economy and an election coming up
in 2016, what can it expect from the future?
Reforms to strengthen tax administration and improve the transparency and accountability of
government are essential to make it a success. Key reforms include the passage of the Freedom of
Information bill, which institutionalizes open data, enhancing budget reporting, and simplifying tax
procedures and processes.
Higher investments in infrastructure, health, and education need to be complemented by reforms to
enhance competition. Essential reforms include crafting and implementing a clear competition policy,
liberalizing key sectors of the economy to directly benefit poor Filipinos, and opening up the
economy to more foreign competition.
An important internal factor is the issue of who succeeds the current president, who will end his term
of office in the middle of 2016. The Constitution bars an incumbent president from seeking reelection. The market has responded favourably to President Aquinos drive for transparency,
elimination of corruption and good governance. Will the same (if not stronger) commitment to good
governance, policy and regulatory frameworks be assured by the succeeding administration? The
challenge for voters is select a leader who will not flinch at difficult reforms.
There will be plenty of populist contenders in the political sphere who could put political expediency
over difficult policy and institutional reforms. This poses a danger to the economy because Philippine
politics is personalised and opportunistic. Voters vote not on issues but rather on the personal
qualities and promises made by political entrepreneurs. The electorate, the majority of whom are

poor and less educated, is vigilant but it needs to be better informed and educated if it is to hold
governments to account.
Fortunately, the taste of growth driven by reforms in governance and policy has aroused an appetite
for broadly-shared prosperity and has engendered a growing support for more policy reforms. A
rising middle class empowered by continuing cash remittances and returning overseas Filipino
workers (who have experienced living in functioning societies abroad) could constitute the swing
vote for a leader with the best interest of the country in mind. We can only hope.

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