The Philippine economy under the pandemic: From Asian tiger to sick man again?

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August 2, 2021

In 2019, the Philippines was one of the fastest growing economies in the world. It finally shed its “sick man of Asia” reputation obtained during the economic collapse towards the end of the Ferdinand Marcos regime in the mid-1980s. After decades of painstaking reform — not to mention paying back debts incurred under the dictatorship — the country’s economic renaissance took root in the decade prior to the pandemic. Posting over 6 percent average annual growth between 2010 and 2019 (computed from the Philippine Statistics Authority data on GDP growth rates at constant 2018 prices), the Philippines was touted as the next Asian tiger economy .

That was prior to COVID-19.

The rude awakening from the pandemic was that a services- and remittances-led growth model doesn’t do too well in a global disease outbreak. The Philippines’ economic growth faltered in 2020 — entering negative territory for the first time since 1999 — and the country experienced one of the deepest contractions in the Association of Southeast Asian Nations (ASEAN) that year (Figure 1).

Figure 1: GDP growth for selected ASEAN countries

GDP growth for selected ASEAN countries

And while the government forecasts a slight rebound in 2021, some analysts are concerned over an uncertain and weak recovery, due to the country’s protracted lockdown and inability to shift to a more efficient containment strategy. The Philippines has relied instead on draconian mobility restrictions across large sections of the country’s key cities and growth hubs every time a COVID-19 surge threatens to overwhelm the country’s health system.

What went wrong?

How does one of the fastest growing economies in Asia falter? It would be too simplistic to blame this all on the pandemic.

First, the Philippines’ economic model itself appears more vulnerable to disease outbreak. It is built around the mobility of people, yet tourism, services, and remittances-fed growth are all vulnerable to pandemic-induced lockdowns and consumer confidence decline. International travel plunged, tourism came to a grinding halt, and domestic lockdowns and mobility restrictions crippled the retail sector, restaurants, and hospitality industry. Fortunately, the country’s business process outsourcing (BPO) sector is demonstrating some resilience — yet its main markets have been hit heavily by the pandemic, forcing the sector to rapidly upskill and adjust to emerging opportunities under the new normal.

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Second, pandemic handling was also problematic. Lockdown is useful if it buys a country time to strengthen health systems and test-trace-treat systems. These are the building blocks of more efficient containment of the disease. However, if a country fails to strengthen these systems, then it squanders the time that lockdown affords it. This seems to be the case for the Philippines, which made global headlines for implementing one of the world’s longest lockdowns during the pandemic, yet failed to flatten its COVID-19 curve.

At the time of writing, the Philippines is again headed for another hard lockdown and it is still trying to graduate to a more efficient containment strategy amidst rising concerns over the delta variant which has spread across Southeast Asia . It seems stuck with on-again, off-again lockdowns, which are severely damaging to the economy, and will likely create negative expectations for future COVID-19 surges (Figure 2).

Figure 2 clarifies how the Philippine government resorted to stricter lockdowns to temper each surge in COVID-19 in the country so far.

Figure 2: Community quarantine regimes during the COVID-19 pandemic, Philippine National Capital Region (NCR ), March 2020 to June 2021

Community quarantine regimes during the COVID-19 pandemic, Philippine National Capital Region (NCR), March 2020 to June 2021

If the delta variant and other possible variants are near-term threats, then the lack of efficient containment can be expected to force the country back to draconian mobility restrictions as a last resort. Meanwhile, only two months of social transfers ( ayuda ) were provided by the central government during 16 months of lockdown by mid-2021. All this puts more pressure on an already weary population reeling from deep recession, job displacement, and long-term risks on human development . Low social transfers support in the midst of joblessness and rising hunger is also likely to weaken compliance with mobility restriction policies.

Third, the Philippines suffered from delays in its vaccination rollout which was initially hobbled by implementation and supply issues, and later affected by lingering vaccine hesitancy . These are all likely to delay recovery in the Philippines.

By now there are many clear lessons both from the Philippine experience and from emerging international best practices. In order to mount a more successful economic recovery, the Philippines must address the following key policy issues:

  • Build a more efficient containment strategy particularly against the threat of possible new variants principally by strengthening the test-trace-treat system. Based on lessons from other countries, test-trace-treat systems usually also involve comprehensive mass-testing strategies to better inform both the public and private sectors on the true state of infections among the population. In addition, integrated mobility databases (not fragmented city-based ones) also capacitate more effective and timely tracing. This kind of detailed and timely data allows for government and the private sector to better coordinate on nuanced containment strategies that target areas and communities that need help due to outbreak risk. And unlike a generalized lockdown, this targeted and data-informed strategy could allow other parts of the economy to remain more open than otherwise.
  • Strengthen the sufficiency and transparency of direct social protection in order to give immediate relief to poor and low-income households already severely impacted by the mishandling of the pandemic. This requires a rebalancing of the budget in favor of education, health, and social protection spending, in lieu of an over-emphasis on build-build-build infrastructure projects. This is also an opportunity to enhance the social protection system to create a safety net and concurrent database that covers not just the poor but also the vulnerable low- and lower-middle- income population. The chief concern here would be to introduce social protection innovations that prevent middle income Filipinos from sliding into poverty during a pandemic or other crisis.
  • Ramp-up vaccination to cover at least 70 percent of the population as soon as possible, and enlist the further support of the private sector and civil society in order to keep improving vaccine rollout. An effective communications campaign needs to be launched to counteract vaccine hesitancy, building on trustworthy institutions (like academia, the Catholic Church, civil society and certain private sector partners) in order to better protect the population against the threat of delta or another variant affecting the Philippines. It will also help if parts of government could stop the politically-motivated fearmongering on vaccines, as had occurred with the dengue fever vaccine, Dengvaxia, which continues to sow doubts and fears among parts of the population .
  • Create a build-back-better strategy anchored on universal and inclusive healthcare. Among other things, such a strategy should a) acknowledge the critically important role of the private sector and civil society in pandemic response and healthcare sector cooperation, and b) underpin pandemic response around lasting investments in institutions and technology that enhance contact tracing (e-platforms), testing (labs), and universal healthcare with lower out-of-pocket costs and higher inclusivity. The latter requires a more inclusive, well-funded, and better-governed health insurance system.

As much of ASEAN reels from the spread of the delta variant, it is critical that the Philippines takes these steps to help allay concerns over the country’s preparedness to handle new variants emerging, while also recalibrating expectations in favor of resuscitating its economy. Only then can the Philippines avoid becoming the sick man of Asia again, and return to the rapid and steady growth of the pre-pandemic decade.

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Adrien Chorn provided editing assistance on this piece. The author thanks Jurel Yap and Kier J. Ballar for their research assistance. All views expressed herein are the author’s and do not necessarily reflect the views and policies of his institution.

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The Philippines economy in 2024: Stronger for longer?

The Philippines ended 2023 on a high note, being the fastest growing economy across Southeast Asia with a growth rate of 5.6 percent—just shy of the government's target of 6.0 to 7.0 percent. 1 “National accounts,” Philippine Statistics Authority, January 31, 2024; "Philippine economic updates,” Bangko Sentral ng Pilipinas, November 16, 2023. Should projections hold, the Philippines is expected to, once again, show significant growth in 2024, demonstrating its resilience despite various global economic pressures (Exhibit 1). 2 “Economic forecast 2024,” International Monetary Fund, November 1, 2023; McKinsey analysis.

The growth in the Philippine economy in 2023 was driven by a resumption in commercial activities, public infrastructure spending, and growth in digital financial services. Most sectors grew, with transportation and storage (13 percent), construction (9 percent), and financial services (9 percent), performing the best (Exhibit 2). 3 “National accounts,” Philippine Statistics Authority, January 31, 2024. While the country's trade deficit narrowed in 2023, it remains elevated at $52 billion due to slowing global demand and geopolitical uncertainties. 4 “Highlights of the Philippine export and import statistics,” Philippine Statistics Authority, January 28, 2024. Looking ahead to 2024, the current economic forecast for the Philippines projects a GDP growth of between 5 and 6 percent.

Inflation rates are expected to temper between 3.2 and 3.6 percent in 2024 after ending 2023 at 6.0 percent, above the 2.0 to 4.0 percent target range set by the government. 5 “Nomura downgrades Philippine 2024 growth forecast,” Nomura, September 11, 2023; “IMF raises Philippine growth rate forecast,” International Monetary Fund, July 16, 2023.

For the purposes of this article, most of the statistics used for our analysis have come from a common thread of sources. These include the Central Bank of the Philippines (Bangko Sentral ng Pilipinas); the Department of Energy Philippines; the IT and Business Process Association of the Philippines (IBPAP); and the Philippines Statistics Authority.

The state of the Philippine economy across seven major sectors and themes

In the article, we explore the 2024 outlook for seven key sectors and themes, what may affect each of them in the coming year, and what could potentially unlock continued growth.

Financial services

The recovery of the financial services sector appears on track as year-on-year growth rates stabilize. 6 Philippines Statistics Authority, November 2023; McKinsey in partnership with Oxford Economics, November 2023. In 2024, this sector will likely continue to grow, though at a slower pace of about 5 percent.

Financial inclusion and digitalization are contributing to growth in this sector in 2024, even if new challenges emerge. Various factors are expected to impact this sector:

  • Inclusive finance: Bangko Sentral ng Pilipinas continues to invest in financial inclusion initiatives. For example, basic deposit accounts (BDAs) reached $22 million in 2023 and banking penetration improved, with the proportion of adults with formal bank accounts increasing from 29 percent in 2019 to 56 percent in 2021. 7 “Financial inclusion dashboard: First quarter 2023,” Bangko Sentral ng Pilipinas, February 6, 2024.
  • Digital adoption: Digital channels are expected to continue to grow, with data showing that 60 percent of adults who have a mobile phone and internet access have done a digital financial transaction. 8 “Financial inclusion dashboard: First quarter 2023,” Bangko Sentral ng Pilipinas, February 6, 2024. Businesses in this sector, however, will need to remain vigilant in navigating cybersecurity and fraud risks.
  • Unsecured lending growth: Growth in unsecured lending is expected to continue, but at a slower pace than the past two to three years. For example, unsecured retail lending for the banking system alone grew by 27 percent annually from 2020 to 2022. 9 “Loan accounts: As of first quarter 2023,” Bangko Sentral ng Pilipinas, February 6, 2024; "Global banking pools,” McKinsey, November 2023. Businesses in this field are, however, expected to recalibrate their risk profiling models as segments with high nonperforming loans emerge.
  • High interest rates: Key interest rates are expected to decline in the second half of 2024, creating more accommodating borrowing conditions that could boost wholesale and corporate loans.

Supportive frameworks have a pivotal role to play in unlocking growth in this sector to meet the ever-increasing demand from the financially underserved. For example, financial literacy programs and easier-to-access accounts—such as BDAs—are some measures that can help widen market access to financial services. Continued efforts are being made to build an open finance framework that could serve the needs of the unbanked population, as well as a unified credit scoring mechanism to increase the ability of historically under-financed segments, such as small and medium-sized enterprises (SMEs), to access formal credit. 10 “BSP launches credit scoring model,” Bangko Sentral ng Pilipinas, April 26, 2023.

Energy and Power

The outlook for the energy sector seems positive, with the potential to grow by 7 percent in 2024 as the country focuses on renewable energy generation. 11 McKinsey analysis based on input from industry experts. Currently, stakeholders are focused on increasing energy security, particularly on importing liquefied natural gas (LNG) to meet power plants’ requirements as production in one of the country’s main sources of natural gas, the Malampaya gas field, declines. 12 Myrna M. Velasco, “Malampaya gas field prod’n declines steeply in 2021,” Manila Bulletin , July 9, 2022. High global inflation and the fact that the Philippines is a net fuel importer are impacting electricity prices and the build-out of planned renewable energy projects. Recent regulatory moves to remove foreign ownership limits on exploration, development, and utilization of renewable energy resources could possibly accelerate growth in the country’s energy and power sector. 13 “RA 11659,” Department of Energy Philippines, June 8, 2023.

Gas, renewables, and transmission are potential growth drivers for the sector. Upgrading power grids so that they become more flexible and better able to cope with the intermittent electricity supply that comes with renewables will be critical as the sector pivots toward renewable energy. A recent coal moratorium may position natural gas as a transition fuel—this could stimulate exploration and production investments for new, indigenous natural gas fields, gas pipeline infrastructure, and LNG import terminal projects. 14 Philippine energy plan 2020–2040, Department of Energy Philippines, June 10, 2022; Power development plan 2020–2040 , Department of Energy Philippines, 2021. The increasing momentum of green energy auctions could facilitate the development of renewables at scale, as the country targets 35 percent share of renewables by 2030. 15 Power development plan 2020–2040 , 2022.

Growth in the healthcare industry may slow to 2.8 percent in 2024, while pharmaceuticals manufacturing is expected to rebound with 5.2 percent growth in 2024. 16 McKinsey analysis in partnership with Oxford Economics.

Healthcare demand could grow, although the quality of care may be strained as the health worker shortage is projected to increase over the next five years. 17 McKinsey analysis. The supply-and-demand gap in nursing alone is forecast to reach a shortage of approximately 90,000 nurses by 2028. 18 McKinsey analysis. Another compounding factor straining healthcare is the higher than anticipated benefit utilization and rising healthcare costs, which, while helping to meet people's healthcare budgets, may continue to drive down profitability for health insurers.

Meanwhile, pharmaceutical companies are feeling varying effects of people becoming increasingly health conscious. Consumers are using more over the counter (OTC) medication and placing more beneficial value on organic health products, such as vitamins and supplements made from natural ingredients, which could impact demand for prescription drugs. 19 “Consumer health in the Philippines 2023,” Euromonitor, October 2023.

Businesses operating in this field may end up benefiting from universal healthcare policies. If initiatives are implemented that integrate healthcare systems, rationalize copayments, attract and retain talent, and incentivize investments, they could potentially help to strengthen healthcare provision and quality.

Businesses may also need to navigate an increasingly complex landscape of diverse health needs, digitization, and price controls. Digital and data transformations are being seen to facilitate improvements in healthcare delivery and access, with leading digital health apps getting more than one million downloads. 20 Google Play Store, September 27, 2023. Digitization may create an opportunity to develop healthcare ecosystems that unify touchpoints along the patient journey and provide offline-to-online care, as well as potentially realizing cost efficiencies.

Consumer and retail

Growth in the retail and wholesale trade and consumer goods sectors is projected to remain stable in 2024, at 4 percent and 5 percent, respectively.

Inflation, however, continues to put consumers under pressure. While inflation rates may fall—predicted to reach 4 percent in 2024—commodity prices may still remain elevated in the near term, a top concern for Filipinos. 21 “IMF raises Philippine growth forecast,” July 26, 2023; “Nomura downgrades Philippines 2024 growth forecast,” September 11, 2023. In response to challenging economic conditions, 92 percent of consumers have changed their shopping behaviors, and approximately 50 percent indicate that they are switching brands or retail providers in seek of promotions and better prices. 22 “Philippines consumer pulse survey, 2023,” McKinsey, November 2023.

Online shopping has become entrenched in Filipino consumers, as they find that they get access to a wider range of products, can compare prices more easily, and can shop with more convenience. For example, a McKinsey Philippines consumer sentiment survey in 2023 found that 80 percent of respondents, on average, use online and omnichannel to purchase footwear, toys, baby supplies, apparel, and accessories. To capture the opportunity that this shift in Filipino consumer preferences brings and to unlock growth in this sector, retail organizations could turn to omnichannel strategies to seamlessly integrate online and offline channels. Businesses may need to explore investments that increase resilience across the supply chain, alongside researching and developing new products that serve emerging consumer preferences, such as that for natural ingredients and sustainable sources.

Manufacturing

Manufacturing is a key contributor to the Philippine economy, contributing approximately 19 percent of GDP in 2022, employing about 7 percent of the country’s labor force, and growing in line with GDP at approximately 6 percent between 2023 and 2024. 23 McKinsey analysis based on input from industry experts.

Some changes could be seen in 2024 that might affect the sector moving forward. The focus toward building resilient supply chains and increasing self-sufficiency is growing. The Philippines also is likely to benefit from increasing regional trade, as well as the emerging trend of nearshoring or onshoring as countries seek to make their supply chains more resilient. With semiconductors driving approximately 45 percent of Philippine exports, the transfer of knowledge and technology, as well as the development of STEM capabilities, could help attract investments into the sector and increase the relevance of the country as a manufacturing hub. 24 McKinsey analysis based on input from industry experts.

To secure growth, public and private sector support could bolster investments in R&D and upskill the labor force. In addition, strategies to attract investment may be integral to the further development of supply chain infrastructure and manufacturing bases. Government programs to enable digital transformation and R&D, along with a strategic approach to upskilling the labor force, could help boost industry innovation in line with Industry 4.0 demand. 25 Industry 4.0 is also referred to as the Fourth Industrial Revolution. Priority products to which manufacturing industries could pivot include more complex, higher value chain electronic components in the semiconductor segment; generic OTC drugs and nature-based pharmaceuticals in the pharmaceutical sector; and, for green industries, products such as EVs, batteries, solar panels, and biomass production.

Information technology business process outsourcing

The information technology business process outsourcing (IT-BPO) sector is on track to reach its long-term targets, with $38 billion in forecast revenues in 2024. 26 Khriscielle Yalao, “WHF flexibility key to achieving growth targets—IBPAP,” Manila Bulletin , January 23, 2024. Emerging innovations in service delivery and work models are being observed, which could drive further growth in the sector.

The industry continues to outperform headcount and revenue targets, shaping its position as a country leader for employment and services. 27 McKinsey analysis based in input from industry experts. Demand from global companies for offshoring is expected to increase, due to cost containment strategies and preference for Philippine IT-BPO providers. New work setups continue to emerge, ranging from remote-first to office-first, which could translate to potential net benefits. These include a 10 to 30 percent increase in employee retention; a three- to four-hour reduction in commute times; an increase in enabled talent of 350,000; and a potential reduction in greenhouse gas emissions of 1.4 to 1.5 million tons of CO 2 per year. 28 McKinsey analysis based in input from industry experts. It is becoming increasingly more important that the IT-BPO sector adapts to new technologies as businesses begin to harness automation and generative AI (gen AI) to unlock productivity.

Talent and technology are clear areas where growth in this sector can be unlocked. The growing complexity of offshoring requirements necessitates building a proper talent hub to help bridge employee gaps and better match local talent to employers’ needs. Businesses in the industry could explore developing facilities and digital infrastructure to enable industry expansion outside the metros, especially in future “digital cities” nationwide. Introducing new service areas could capture latent demand from existing clients with evolving needs as well as unserved clients. BPO centers could explore the potential of offering higher-value services by cultivating technology-focused capabilities, such as using gen AI to unlock revenue, deliver sales excellence, and reduce general administrative costs.

Sustainability

The Philippines is considered to be the fourth most vulnerable country to climate change in the world as, due to its geographic location, the country has a higher risk of exposure to natural disasters, such as rising sea levels. 29 “The Philippines has been ranked the fourth most vulnerable country to climate change,” Global Climate Risk Index, January 2021. Approximately $3.2 billion, on average, in economic loss could occur annually because of natural disasters over the next five decades, translating to up to 7 to 8 percent of the country’s nominal GDP. 30 “The Philippines has been ranked the fourth most vulnerable country to climate change,” Global Climate Risk Index, January 2021.

The Philippines could capitalize on five green growth opportunities to operate in global value chains and catalyze growth for the nation:

  • Renewable energy: The country could aim to generate 50 percent of its energy from renewables by 2040, building on its high renewable energy potential and the declining cost of producing renewable energy.
  • Solar photovoltaic (PV) manufacturing: More than a twofold increase in annual output from 2023 to 2030 could be achieved, enabled by lower production costs.
  • Battery production: The Philippines could aim for a $1.5 billion domestic market by 2030, capitalizing on its vast nickel reserves (the second largest globally). 31 “MineSpans,” McKinsey, November 2023.
  • Electric mobility: Electric vehicles could account for 15 percent of the country’s vehicle sales by 2030 (from less than 1 percent currently), driven by incentives, local distribution, and charging infrastructure. 32 McKinsey analysis based on input from industry experts.
  • Nature-based solutions: The country’s largely untapped total abatement potential could reach up to 200 to 300 metric tons of CO 2 , enabled by its biodiversity and strong demand.

The Philippine economy: Three scenarios for growth

Having grown faster than other economies in Southeast Asia in 2023 to end the year with 5.6 percent growth, the Philippines can expect a similarly healthy growth outlook for 2024. Based on our analysis, there are three potential scenarios for the country’s growth. 33 McKinsey analysis in partnership with Oxford Economics.

Slower growth: The first scenario projects GDP growth of 4.8 percent if there are challenging conditions—such as declining trade and accelerated inflation—which could keep key policy rates high at about 6.5 percent and dampen private consumption, leading to slower long-term growth.

Soft landing: The second scenario projects GDP growth of 5.2 percent if inflation moderates and global conditions turn out to be largely favorable due to a stable investment environment and regional trade demand.

Accelerated growth: In the third scenario, GDP growth is projected to reach 6.1 percent if inflation slows and public policies accommodate aspects such as loosening key policy rates and offering incentive programs to boost productivity.

Focusing on factors that could unlock growth in its seven critical sectors and themes, while adapting to the macro-economic scenario that plays out, would allow the Philippines to materialize its growth potential in 2024 and take steps towards achieving longer-term, sustainable economic growth.

Jon Canto is a partner in McKinsey’s Manila office, where Frauke Renz is an associate partner, and Vicah Villanueva is a consultant.

The authors wish to thank Charlene Chua, Charlie del Rosario, Ryan delos Reyes, Debadrita Dhara, Evelyn C. Fong, Krzysztof Kwiatkowski, Frances Lee, Aaron Ong, and Liane Tan for their contributions to this article.

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Philippine economic development, looking backwards and forward: an interpretative essay.

essay about the philippine economy

Over the past decade, the Philippine development story has attracted international attention as it transformed from being the “Sick Man of Asia” to “Asia’s Rising Tiger”. However, the country’s strong growth momentum was abruptly interrupted by the COVID-19 pandemic, which continues to cast a huge shadow over its development outlook. With the country now at the crossroads, this paper reflects on and draws lessons for economic development and policy by examining the country’s three main economic episodes over the post-independence era: (a) the period of moderately strong growth from 1946 to the late 1970s, (b) the tumultuous crisis years from the late 1970s to the early 1990s, and (c) the period from the early 1990s to the 2019 when it rejoined the dynamic East Asian mainstream. Through comparative analysis, the paper also seeks to understand the country’s development dynamics and political economy. We conclude by highlighting elements of a recovery and reform agenda in the post-pandemic era.

Key Words: Philippines, economic development, economic history, political economy, institutions, COVID-19, ASEAN, comparative analysis

JEL codes: E02, I0, N15, O10, O43, O53, P52

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STORY HIGHLIGHTS

  • In 2017, the Philippines was among the top three growth performers in the region.
  • The medium-term growth outlook for the Philippines remains positive but domestic risks are more prominent.
  • Higher real wages are essential to achieve shared prosperity and inclusive growth.

ECONOMIC AND POLICY DEVELOPMENTS

In 2017, the Philippines was among the top three growth performers in the region. Only Vietnam and China did better. The Philippine economy grew from 6.9 percent year-on-year in 2016 to 6.7 percent year-on-year in 2017. Growth was anchored in strong exports, while investment growth significantly slowed and consumption growth moderated. The Philippines’ annual exports rose sharply in 2017 and became the main engine of economic growth, while imports continued to grow by double-digits. Investment growth slowed in 2017, following two consecutive years of rapid expansion, and climbing inflation slowed real wage growth and contributed to a moderation in private consumption growth.

Sustained economic growth is likely to continue to contribute to poverty reduction. Under the assumption that the responsiveness of the poverty rate to economic growth follows historical trends, the poverty rate, based on the lower middle-income poverty line of US$3.20/day, is projected to decline from 27.0 percent in 2015 to 22.9 percent and 21.7 percent in 2018 and 2019, respectively, as economic growth remains robust. These projections would imply a continuing trend of one million Filipinos being lifted out of poverty each year. Factors that have been driving poverty reduction in the Philippines include the movement of employment out of agriculture, a sustained inflow of remittances, and the government’s conditional cash-transfer program.

PROSPECTS AND RISKS

The country’s medium-term growth outlook remains positive. The Philippine economy is projected to continue on its expansionary path and grow at an annual rate of 6.7 percent in both 2018 and 2019. In 2020, growth is expected to level at 6.6 percent. The economy is currently growing at its potential, making productive investment in physical and human capital essential so that the economy can continue to grow along its current growth trajectory. Investment growth hinges on the government’s ability to effectively and timely implement its ambitious public investment program. Moreover, the government needs to clarify the role of the private sector in its investment program.

Domestic risks are becoming more prominent. Inflationary pressure is expected to intensify in 2018 due to both domestic and external factors. The Philippine economy is also at risk of overheating. The implementation of the public infrastructure program is vital to the country’s growth outlook, as private investment is expected to weaken. Prudent fiscal management and the implementation of the government’s tax reform agenda could help secure the country’s fiscal sustainability. External risks remain present, especially a faster-than-expected policy normalization in advanced economies that could trigger financial volatility and increase capital outflows from the Philippines. Renewed protectionist sentiments in several advanced economies will also elevate policy uncertainty, which may disrupt trade and investments.

Higher real wages are essential to achieve shared prosperity and inclusive growth. In recent years, the Philippine economy has made great strides in delivering inclusive growth, evidenced by the declining poverty rates and a falling Gini coefficient. Unemployment has reached historic low rates, but underemployment remains high, near its 18-20 percent decade-long average. More importantly, unlike its high-performing East Asian neighbors with booming manufacturing sectors that provide large numbers of labor-intensive jobs, a majority of Filipino workers that transition out of agriculture generally end up in low-end service jobs. Thus, while employment increased between 2006 and 2015, mean wages remained stagnant, with only a four percent increase in real terms over the same period. Low job quality and slow growth of real wages are the missing links to higher shared prosperity.

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[OPINION] 10 years of writing about Philippine economics

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This is AI generated summarization, which may have errors. For context, always refer to the full article.

[OPINION] 10 years of writing about Philippine economics

ALEJANDRO EDORIA

Today marks my 10 th year contributing economics op-ed pieces for Rappler. How time flies! And what a blast it has been!

My longtime editor, Chay Hofileña, likes to joke about this by saying this is my longest relationship yet. Kidding aside, I’m truly grateful to her for taking a chance on the unsolicited email of a 23-year-old graduate student a decade ago, and liking my style of writing about economic issues.

Since then Ma’am Chay – as well as the other lovely and redoubtable Rappler manangs – showed me the ropes and taught me lots about journalism, which I didn’t really study formally. Now I’d like to think my writing is all the better for it.

To date I’ve written 322 articles for Rappler (including this one), initially appearing in the iSpeak and IMHO sections, then graduating into the Thought Leaders section starting September 10, 2016.

Through my pieces, I’ve captured some pretty big developments and shifts in Philippine economics and politics. Let me share with you 10 pieces that encapsulate that journey.

1. Kasambahay Law: Its unintended consequences (January 31, 2013)

The article that started it all. For one reason or another, I felt strongly about this piece of legislation when it was signed into law by the late former president Benigno Aquino III on January 18, 2013. Applying (rather naively, I admit) basic lessons from microeconomics, I argued that legislating the wages of househelps or kasambahay might lead to some of them becoming unemployed if their employers’ couldn’t afford it.

Unfortunately, years later, the implementation of the Kasambahay Law remains poor . Although there are now help desks in DOLE regional offices catering to househelps specifically, many househelps remain unaware of the benefits they’re entitled to under the law. Many employers are also not complying. Monitoring of househelp remains difficult because of DOLE’s lack of staff, as well as the difficulty of gaining access to many househelps’ areas of work.

Economists’ understanding of the minimum wage has also drastically shifted since then. Whereas before economists were deathly afraid of minimum wage hikes (because they supposedly lead to unemployment), the empirical evidence for that is a lot weaker now. In certain contexts, higher minimum wages may even lead to higher employment.

The lessons: just because a law is approved doesn’t mean it will be implemented, and the feared of unintended consequences will pan out. (Maybe the poor implementation itself is also an unintended consequence?) Also, don’t take textbook economic models and theories too seriously.

2. Marcos years marked ‘golden age’ of PH economy? Look at the data (March 5, 2016)

This piece was inspired by the BusinessWorld piece of my former professor, Dr. Emmanuel de Dios of the UP School of Economics, on the same topic. After reading that, I decided to dig deeper, and that got me obsessed about Martial Law economics. I discovered for myself that there’s a ton of empirical data showing that Martial Law was not the country’s “golden age,” and in this piece I shared some of those data.

At that time, I was elated by the splash this article made. But I overestimated the power of data to change people’s minds about an issue, and underestimated the strength of the Marcoses’ propaganda machine, the social media echo chambers, and the cognitive biases that could lead people to prefer falsehoods to truth.

Since then Martial Law economics has been a key research interest. In February 2023, I will be publishing my first book – False Nostalgia: The Marcos Golden Age Myths and How to Debunk Them – combining 7 years’ worth of research on Martial Law economics. The starting point of that journey was this Rappler piece.

3. Free tuition alone won’t make college any more accessible (March 9, 2017)

Through my pieces, I get to indirectly participate in legislative debates and proposals. One of the memorable pieces of legislation in the past years was the free tuition law, that made college education free in all state universities and colleges, as well as local ones.

Using past research and government data, I showed that the richest fifth of tertiary students are overrepresented vis-à-vis the poorest fifth. So, arguably, the free tuition law stands to give billions worth of subsidies to rich kids who can actually afford to pay for college tuition. What a waste! This subsidy of course posed as a fiscal strain: why should the government subsidize the rich this way?

I remember receiving praise from colleagues saying the original article (there was also a follow-up piece in 2019) was a great use of statistics to argue for sound economics. But I remember receiving a lot of flak as well on Twitter from those from the Left (especially the young ones), saying I should stop spewing such “neoliberal” BS. The attacks were so intense I had to leave Twitter for a few days and let things subside.

As with many legislative proposals, politics and populism trump economics. Former president Rodrigo Duterte signed the free tuition law in August that year.

I realized then that my pieces can be quite triggering for some groups ascribing to certain closely held narratives or ideologies. But so long as I’m using data and evidence to back up my claims, I should be fine.

4. Why is Philippine inflation now the highest in ASEAN? (September 6, 2018)

Discussing macroeconomic statistics and trends is a recurring theme of my Rappler pieces. In fact, macro developments have significantly shifted my teaching and research interests in this direction (vis-à-vis microeconomics).

One of the more memorable trends I wrote about was the spell of high inflation in 2018. That year inflation reached a nine-year high, and was also the highest inflation rate in ASEAN around September and October. I had fun triangulating the reasons for this, with factors ranging from the rice shortage brought about by the Duterte administration, the rising trade deficit, inflation expectations, and the ill timing of the TRAIN law, which raised excise taxes just as world oil prices were rising.

I also rebutted claims by the Duterte economic managers then that rising inflation was “not alarming” and “quite normal in a fast-growing economy.” Such rebuttals have irked the economic managers a number of times, based on reports from my friends in different agencies. Little do those officials know that I receive a lot of positive feedback (even encouragement) as well from many economist colleagues, who are just constrained from speaking out in one way or another.

5. Dengvaxia scare: How rumors caused viral outbreaks (January 16, 2019)

I use my Rappler pieces to show that economics can be related to other fields of study, such as public health.

I particularly liked writing this piece about the ill effects of the Dengvaxia scare perpetrated by certain personalities of the Duterte administration. In a nutshell, disinformation surrounding the new dengue vaccine spilled over to other vaccines, and parents ended up not having their children take basic shots for measles and like diseases. Hence, all sorts of otherwise preventable epidemics spread across the country. The opening sentence captured it rather nicely: “Fake news can kill, and the Dengvaxia scare is a perfect example of it.”

This was a perfect illustration of so-called “negative externalities” in economics. And I remember incorporating this piece in my microeconomics classes back then. Little did we know that the Dengvaxia scare would presage the even greater troubles wrought by the global pandemic just one year later.

6. Dismal PISA rankings: A wake-up call for Filipinos (December 4, 2019)

Education issues have always been close to my heart, and I was particularly devasted by news that we ranked so poorly in the 2018 Programme for International Student Assessment (PISA). Specifically, we ranked dead last in reading, and second to last in math and science.

Later, even more bad news came when we also ranked dead last in the 2019 TIMSS (Trends in International Mathematics and Science Study). Meanwhile, the first ever Southeast Asia Primary Learning Metrics in 2019 also showed that 9 in 10 schoolchildren in the Philippines can’t read basic texts.

Long story short, we’re experiencing a full-blown education crisis – undoubtedly worsened by the pandemic, what with the extremely long school closures and the “learning losses” from online classes.

I argued that all these studies ought to be a wake-up call for Filipinos. But the attitude from education officials has been characterized by denialism and gaslighting. The Department of Education, for instance, complained that they were not consulted for a World Bank education report. After that, the World Bank took down their report from their website. I wrote about this in “ 8 facts from WB education report they don’t want you to read .”

7. Why Filipinos need to stay at home until June (or even longer) (March 19, 2020)

By far my most viral piece ever (pun unintended). I wrote about this days after Duterte imposed the first COVID lockdown nationwide. At the time, everyone was at a loss about what’s going on, and nobody knew until when Duterte’s strict lockdowns would last.

I saw some analyses on Facebook by experts in biomedical data and biostatistics, showing the exponential rise of COVID-19 cases that necessitates prolonged lockdowns up to at least June that year. This was quite concerning to a lot of people: many people thought the lockdowns would just last days or a few weeks.

But little did we know that the lockdowns would be a lot longer than that, with some form of mobility restrictions lasting up to 2 years or more, with varying degrees of strictness nationwide (I discovered recently that the lockdowns were very severe in places like Camiguin Island). Also, the lockdowns would turn out to be a political tool of the Duterte administration to subjugate people, especially the poor.

COVID would dominate a lot of my Rappler pieces since then: constituting maybe a fourth of all my pieces, ranging from the economics of lockdowns , the health versus economy trade-off , the inadequate and slow distribution of economic aid , the glacial pace of vaccination , the Duterte government’s wrong budget priorities (I collaborated a lot with my friends Zy-za Suzara and Luis Abad on this topic), and pandemic-related corruption (e.g., Pharmally).

Fast-forward to 2023, our lives are normalizing now. But I’m glad to be able to document the economics of the pandemic through Rappler; later I might just write a book about it.

8. 10 Build, Build, Build projects that started in previous admins (June 23, 2021)

My Rappler columns are often a venue to debunk some of the lies and misconceptions said by government officials. And quite a few people look forward to my pieces when it comes to economic mistruths.

The Duterte administration was particularly fond of boasting about its “flagship” economic project, an infrastructure spending spree called “Build, Build, Build” (BBB). However, upon closer inspection, many of projects under BBB were in fact started by previous administrations. My friend Zy-za Suzara, formerly with the Department of Budget and Management, co-wrote this piece with me on the rampant credit-grabbing of the Duterte administration.

Some other pieces I wrote on economic lies include those about the “ Duterte Legacy ,” the statistics behind the war on drugs , the TRAIN law , and the recurring claim that we would soon be an “ upper-middle income country ” (we’re still not).

9. Malubha ang state of the nation (July 23, 2021)

Up until the middle of 2021, I’ve been writing almost exclusively in English. But months before the pivotal 2022 elections, there was growing concern about the looming possibility of another Marcos presidency. And I figured I needed to write more in Filipino (if not exclusively in Filipino) to try to reach a wider audience with my economics pieces, especially those that would figure in the electoral debates and discussions. I started with this piece, on the last State of the Nation Address of former president Duterte.

Writing in Filipino was quite liberating for me: I could write quicker, and I could use the nuances of everyday language in a way I couldn’t do with English. For instance, I found myself incorporating more jokes and witticisms, as well as pop culture references. Most of all, I discovered that there was indeed a huge reader base of articles in Filipino: interactions and engagement with my pieces blew up.

I wrote in Filipino until end of 2022, and switched back to English just recently. But I may still put in some Filipino pieces here and there.

10. Budol of the century (May 12, 2022)

Even if my column is primarily about economics, I can’t avoid writing about politics from time to time. This piece was written a few days after the 2022 elections, when the partial and unofficial results showed that another yet Marcos would sit in Malacañang.

Apart from showing some of the election results across the regions, I explored possible reasons for the landslide win of the teamup between Bongbong Marcos and Sara Duterte. These include intense regionalism (which pervades much of everyday life, culture, and politics), “networked disinformation,” historical distortions, and the broken educational system. These are pretty much the same issues that led to the landslide win of administration senators in the 2019 midterm elections, which I also wrote about in “ Why is Duterte still so popular ?”

All in all, writing for Rappler in the past decade has been an unalloyed boon for me and my career. My writing has made me grow as a writer and economist, and I’ve also made a ton of new friends along the way. (I’ve irked some people, too, from all sides of the political spectrum. But I guess that’s an occupational hazard, and one more measure of the impact of one’s writing.)

Here’s to another 10 years of writing for Rappler! – Rappler.com

JC Punongbayan, PhD is an assistant professor at the UP School of Economics and the author of the forthcoming book, False Nostalgia: The Marcos Golden Age Myths and How to Debunk Them . JC’s views are independent of his affiliations. Follow him on Twitter ( @jcpunongbayan ) and Usapang Econ Podcast .

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Home — Essay Samples — Sociology — Globalization — The Impact of Globalization on the Philippine Economy

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The Impact of Globalization on The Philippine Economy

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Published: Jan 5, 2023

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essay about the philippine economy

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Essay on The Phillippines' Economy

The Phillippines' Economy Over the past few years, the Philippines' economy has undergone a remarkable transformation. In the late 80's and early 90's the Philippines were stuck with poor political leadership, economic growth, and slow paced economic development. Today it is recognized globally that the Filipino economy has turned around to produce a positive growth. One of their biggest accomplishments has been the GNP growth rate rise from zero in the early nineties to between 5% and 6% today. The current president, Joseph Ejercito Estrada, is following the strong pace set by former president. Under the Ramos administration, important steps were taken towards economic liberalization. These steps included the opening of …show more content…

Despite this expansion, the quality of education was still not up to par and remains a concern today. One problem facing the education system was a thirty- percent difference in the literacy level between rural and urban areas. Also, all families below the poverty line could not afford to educate their children beyond elementary school. These and other problems like poor teacher performance, overcrowded classrooms, lack of language skills and low wages could definitely benefit from new programs aimed at improving work productivity and family income. In 1990, over 10,000 foreign students studied in the Philippines, the majority of which were American. Until recently, most of the students attending these schools had to be taught in three languages; English, Filipino and Spanish. Now the schools primarily focus on Filipino, which will relieve much stress on students and faculty, and promote faster progress in the future. Another controversy noticed by many American students was the fact that many education policies were fluctuating constantly, and were likely to be changed before teachers became used to them. The most important concern of the education system in the Philippines is the number of students who actually complete college, and are then unable to find a job that they were not grossly overqualified for. These trained personnel could facilitate economic development if properly utilized, which is why the Department of Education,

Fremont High School Summary

More likely to serve low income students is urban public schools which who are reportedly failing to educate the students they serve. In urban public schools, Numerous understudies and their families are living with serious financial disservice. Students are not proven to be the problem. The education that urban students in government funded schools get is evidently insufficient. To be a school that promotes a good academic status of students, you can’t lack basic social utilities. Poverty in urban schools can be fixed. A feature that characterizes effective schools involves coordination instruction among teachers which contributed to the weak academic performance of low income students. You must ask yourself what would be the best solution to help these students succeed? Because urban school are being run badly, they are failing. Improvement within management lies a solution. According to Chicago Tribune in the news article” Economic Inequality: The real cause of the urban school problem” findings show that the root of the problems facing urban schools can be found in gradual but extremely powerful changes in the nation's economy It takes a comfortable environment, suitable effective committed teachers, more use of instructional practices consistently and available necessities and needs. The most important statistic provided is the Growing economic inequality contributes in a multitude of ways to a widening gulf between the educational outcomes of rich and poor

Education Is The Root Of Inequality In America

Throughout decades, education inequality is still one of the most deliberate and controversial issues in the United States. Thus far, the privilege or right to receive education has not attained the level of equality throughout the nation. Poor districts obtain less educational funds while rich districts obtain more, which create an immense gap between the quality of schools in poor and rich areas. In other words, the education gap is the root of inequality in America. Inequality in education is linked to the major problems in the society. The need for studies to be done to find ways of overcoming these inequalities is very inevitable. The means of mitigating these inequalities are important for the entire world. This is something of great interest due to the fact that children need quality education which is a pillar for a guaranteed future. Generally speaking, the distinctions among races, genders, and classes in the society have caused the educational inequality in America.

Education in the United States is Falling Behind

Education is an integral part of society, School helps children learn social norms as well as teach them to be successful adults. The school systems in United States, however are failing their students. In the world as a whole, the United States is quickly falling behind other countries in important math and reading scores. The United States ranked thirtieth in math on a global scale and twentieth in literacy. This is even more true in more urban, lower socio-economic areas in the United States. In West Trenton Central High School was only 83% proficiency in literacy and only 49% of the students were proficient in math. These school have lower test scores and high dropout rates. Many of these students come from minority backgrounds and are often form low income families. There are many issues surrounding these urban schools. There is a severe lack of proper funding in these districts, and much of the money they do receive is sanctioned for non-crucial things. Schools also need a certain level of individualization with their students, and in many urban classes, this simply does not happen. While there are many factors affecting the low performance of urban schools, the lack of proper funding and distribution of funds, the cultural divide between teachers and students in urban districts, along with the lack of individualization in urban classrooms are crucial factors to explain the poor performance in these districts. Through a process of teacher lead budget committees and

Purpose Of The No Child Left Behind Act

Also, the amount of teachers qualified was a concern. The ratio of student to teacher in the classroom was an issue. Many classrooms were overcrowded which makes it hard for teachers to focus on students individually if assistance was needed. Teachers in turn were not able to receive assistance from teacher aides. Strength of all individuals is culture. The ethnic background of the children was taken into consideration. Federal funding was used to provide more training to teachers in relation to cultural competency and technical skills. The teachers will take into consideration a child’s culture and their ability to learn and retain information. In addition, the use of technology provided a full range of technical skills to analyze data to improve quality of decision-making skills and classroom experience (United, 2010).

Does The U.s. Have An Obligation Help Poor Countries?

rural areas, is in need of financial support that not only fund schools but can pay professionals who care about teaching. America can spend money to do a public education reform that paves the way for a better education for students. Paying for better teachers with higher requirements, than what’s currently accepted and paying for the safety of schools guarantee the United States a bright future. High expectations backed with a large fund work and retain high quality teachers can make a big difference. Not only are there too many of the students

Waiting For Superman Documentary Summary

This means that the good schools can only take in a few students, the proverbial tip of the ice berg. The rest of the students are relegated to schools in which their parents have no faith at all. This is tantamount to dooming these students to failure and being completely unable to do anything about it. The decline in the level of education in the public school system has prompted a lot of parents to opt for private schooling for their children. The problem with this is, of course, finances. Another problem facing the schooling system is the lack of streamlining of services. A comparison is drawn between the schools in the poor neighborhoods and their equivalents in the rich neighborhoods. The difference is astronomical. There is absolutely no coherency between the levels of services being provided in these institutions. Thus, the education system appears to be skewed. This is a worst case scenario situation for a system that is supposed to provide children with equal opportunities at a better life in the

Achievement Gap Flaws

Schools can’t solve the problem alone,” and” without local initiative, reformers cannot succeed.” The neighborhood is where the children grow up, so some of the small level programs depend on local promote. Third, do not ignore the stupendous gap of income. The achievement gap begins when children are young because some of them have had better medical care and have memorized more vocabulary than others because of highly educational parents. According to what Sean Reardon found, the income achievement gap is growing, and it is two times larger than black-white achievement. Therefore, to mend the schools, to act in concert with local, and not to neglect the large income achievement gap are the points that Diane Ravitch

Problems Of Equal Education In The United States

Today’s education system has its problems, one of the problems being equal education to everyone. This is a problem that can be seen in the more poverty areas in the United States. Most schools in poverty areas have older materials to work with, teachers who are less passionate about their jobs, are not being taught the humanities, and many of the schools are shutting down from poor conditions and low attendance.

The No Child Left Behing Act

Many United States children are failing in the public schooling system. Students are dropping out at alarming rates and those who stay are not properly prepared for college and careers. There are vast achievement gaps leaving children behind that are minorities, come from low income families, are disabled, and are English learning (U.S. Department of Education). These problems are apparent to teachers, parents, students, employers, and society as a whole. This will leave the United States with a workforce that is not properly educated or trained for the jobs available.

When Work Disappears Essay example

Moreover, the advancement in technologies causes higher requirements for education and training for potential employees, and the lack of education in the inner cities cause the residents to fall short of these requirements. Wilson speaks about the lack of motivation the teachers have to teach their students will great enthusiasm, the lack of skills the teachers had, and the overcrowding of schools. A woman gave details on how her daughter isn’t going to a public school because since they don’t get the amount of money a private school makes, the teachers do not care and the schools are overcrowded. There are also no schools that give the specific training that particular jobs require from their employers.

The Effects of Poverty on Education Essay

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In today’s world people need to compete globally for jobs and one of the most important factors in getting a good paying job is education. However, even the best schools cannot overcome some of the obstacles placed in front of the students that walk through their doors. Poverty, chaotic home environments, discrepancies in exposure to technology, and lack of funding for schools all negatively impact the effort to educate children.

Essay Filipino Americas

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Under the new regime agriculture developed rapidly, commerce and trade soared to unprecedented levels, transportation and communication were modernized, banking and currency improved, the manufacturing industries were transformed. As compared with the Spanish era, economic progress of the Philippines during the American era forged ahead with great strides. (291)

Essay about The Philippines

It has three major island groups which are the Luzon, the largest island and where the capital is located; Visayan, and Mindanao. Eleven islands make up 94 percent of the Philippine landmass, and two of these--Luzon and Mindanao--measure 105,000 and 95,000 square kilometers, respectively. They, together with the cluster of the Visayan Islands that separate them, represent the three principal regions of the archipelago (many scattered islands in a large body of water) that are identified by the three stars on the Philippine flag.

Examples Of Pestle Analysis Of The Philippines

The Philippine economy is progressively increasing according to the World Bank Org. According to the date compiled by CNN Money, the Philippines is projected to be the fourth fastest in the world, that has a GDP at 6.7%. It is projected that the Philippines economy is higher than Bangladesh 6.3%.The agriculture is one of the factors that affects the economy of the Philippines. It contributes the GDP and labor force in the Philippines.

The Philippine Philippines Culture And Culture Essay

The Philippines is a country deeply rooted in culture. The Army defines culture as a “dynamic social system” containing the values, beliefs, behaviors, and the norms of a “specific group, organization or society or other collectively” learned, shared, internalized, and changeable by all members of the society (FM 3-24 COUNTERINSURGENCY, 2006). Cultures have different characteristics which consist of shared, learned, symbols, integrated and dynamic.

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Essay on Economic Issues In The Philippines

Students are often asked to write an essay on Economic Issues In The Philippines in their schools and colleges. And if you’re also looking for the same, we have created 100-word, 250-word, and 500-word essays on the topic.

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100 Words Essay on Economic Issues In The Philippines

The Philippines suffers from high poverty rates. Many people lack basic needs like food, shelter, and clothing. This is because jobs are scarce and many are low paying. The government is trying to create more jobs and improve living conditions, but progress is slow.

Unemployment

Unemployment is another big issue. There aren’t enough jobs for everyone. This leads to people not having money to buy things they need. The government is working on this problem by trying to attract more businesses to the Philippines.

Education in the Philippines is not always good quality. Many schools lack resources like books and computers. This makes it hard for students to learn and succeed. The government knows this is a problem and is working to improve schools.

Infrastructure

The Philippines needs better infrastructure, like roads and buildings. Poor infrastructure can make it hard for businesses to operate and for people to get to work. The government is investing in infrastructure to try to fix this problem.

Corruption is a big problem in the Philippines. It makes it hard for the government to improve the economy because money is not always used correctly. The government is trying to stop corruption, but it is a difficult problem to solve.

250 Words Essay on Economic Issues In The Philippines

Introduction.

The Philippines, a Southeast Asian country, faces numerous economic problems. These issues include poverty, unemployment, and corruption. Let’s explore these issues in detail.

Poverty is a significant problem in the Philippines. Despite the country’s economic growth, many people still live in harsh conditions. They struggle to afford basic needs like food, shelter, and education. The government is trying to reduce poverty, but progress is slow.

Another big issue is unemployment. Many Filipinos do not have jobs, especially young people. This problem is due to a lack of job opportunities and skills mismatch. A lot of people have skills that do not match the jobs available.

Corruption is also a major issue in the Philippines. It affects the economy because money that should be used for public services ends up in the wrong hands. This problem hinders economic development and increases poverty.

To sum up, the Philippines faces several economic issues. These problems include poverty, unemployment, and corruption. Solving these issues is not easy, but with the right policies and actions, the country can improve its economy.

500 Words Essay on Economic Issues In The Philippines

The economy of the philippines.

The Philippines is a country in Southeast Asia made up of over 7,000 islands. Its economy is mixed, meaning it has both private businesses and government involvement. The country’s economy has seen growth in recent years, but it still faces many challenges.

Issue 1: Poverty

One of the main economic problems in the Philippines is poverty. Despite economic growth, a big part of the population still lives in poverty. This means many people don’t have enough money for basic needs like food, shelter, and education. Poverty is more common in rural areas where farming is the main source of income.

Issue 2: Unemployment

Unemployment is another big problem. This means there are people who want to work but can’t find jobs. The COVID-19 pandemic made this worse, as many businesses had to close. The government is trying to create more jobs, but it’s a slow process.

Issue 3: Inequality

Inequality is another issue. This means that the wealth in the country is not shared equally. A small group of people own a big part of the country’s wealth, while many others have very little. This makes it hard for people to improve their lives.

Issue 4: Natural Disasters

The Philippines is often hit by natural disasters like typhoons, earthquakes, and volcanic eruptions. These disasters damage homes, roads, and businesses, which hurts the economy. The government has to spend a lot of money to repair the damage and help people recover.

Issue 5: Dependence on Overseas Workers

A lot of Filipinos work in other countries and send money back home. This money is a big part of the country’s income. But it also means the country depends a lot on other countries’ economies. If these countries face economic problems, it can hurt the Philippines too.

Ways to Improve

To solve these problems, the government is working on several things. They are trying to help farmers by providing better tools and training. They are also trying to create more jobs, especially in manufacturing and services. They are investing in education to give people better skills for these jobs. And they are working on improving the country’s infrastructure to make it more resilient to natural disasters.

In conclusion, while the Philippines has made progress, it still faces many economic challenges. By focusing on reducing poverty, creating jobs, reducing inequality, and improving resilience to natural disasters, the country can continue to grow and improve the lives of its people.

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The Influence of Globalization on the Philippine Economy

Table of contents, economic growth, economic development, references:, economic reform strategy, international trade, financial flows and currency, foreign direct investment (fdi), quality of life (qol) and hdi, income and wealth distribution (gini coefficient and lorenz curve), environmental sustainability.

FDI net inflows fall for 6th month in Aug.

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Harvard International Review

Overseas Filipino Workers: The Modern-Day Heroes of the Philippines

Bayani is the Tagalog term for “hero.” In the Philippines, a bayani is someone who is courageous, humble, and selfless. They pursue causes that are greater than themselves, such as those impacting a community, a nation, or the environment. Overseas Filipino Workers (OFWs) is a term referring to Filipino migrant workers, individuals who have left their homes to work abroad and provide comfortable lives for their families. Referring to these workers, former President Corazon Aquino coined the phrase ‘Bagong-Bayani’ in 1988. OFWs are the country’s modern-day heroes because they not only boost the Philippines’ economy through remittances but are figures of resilience. OFWs endure homesickness, personal sacrifices, and horrible working conditions in order to support their families back home.

By the Numbers

The Philippine Statistic Authority estimates that about 1.83 million OFWs worked abroad from April to September 2021. The same data reveal that about “four in every ten” OFWs work low-status or ‘ elementary ’ jobs, such as street vendors, construction and factory workers, cleaners, domestic helpers, and agriculture laborers. A majority of OFWs work in Asia, specifically Saudi Arabia, United Arab Emirates, Hong Kong, Kuwait, Singapore, and Qatar.

Because of their major contribution to the growth and development of the Philippine economy, OFWs are revered as the nation's economic heroes. According to data released by the Central Bank of the Philippines, remittances from OFWs reached a record high in December of last year: from the previous all-time high of US$34.88 billion, it rose by 3.6 percent to a record high US$36.14 billion in 2022.

“OFW remittances, at new record highs on a monthly basis, are a bright spot for the Philippine economy in terms of spurring consumer spending, which accounts for at least 75 percent of the economy, and in turn, support faster economic growth,” Rizal Commercial Banking Corp. Chief economist Michael Ricafort said .

Furthermore, most OFWs are Filipina women. The numbers clearly show that women dominate the workforce, accounting for approximately 60 percent of OFWs. According to data from the Overseas Workers Welfare Administration, at least 18,002, or 75.05 percent of the 23,986 cases of abuse and other incidents involving workers in the Gulf Cooperation Council that were reported last year included female OFWs. On the other hand, male OFWs were involved in only 5,984 cases, or 24.95 percent of all cases.

These women are disproportionately more likely to suffer from terrible working conditions, as they are often subjected to abuse, excessive work, little pay, rape, or worse, being killed by their foreign employers. The International Labour Office published a working paper titled Philippines: Good Practices for the Protection of Filipino Women Migrant Workers in Vulnerable Jobs explaining that “Gender-based discrimination intersects with discrimination based on other forms of  ‘otherness’ – such as non-national status, race, ethnicity, religion, economic status – placing women migrants in situations of double, triple or even fourfold discrimination, disadvantage or vulnerability to exploitation and abuse.”

In 2020, there were 23,714 documented cases of contract violations involving the maltreatment of OFWs, according to data provided by the Philippine Overseas Labor Offices, and approximately 5,000 of these cases were reported from Middle Eastern countries. According to the Philippine Information Agency, Filipina women who work in the Middle East are subjected to the “ kafala ” system, which ties foreign workers to their employers. Under this framework, employers could easily lock domestic workers inside their houses and seize their phones, passports, and visas until the expiration of their contracts.

The Human Rights Watch (HRW) published a comprehensive report titled “ ‘I Already Bought You’ Abuse and Exploitation of Female Migrant Domestic Workers in the United Arab Emirates,” which explains real-world examples of how the UAE’s kafala system of visa sponsorship binds migrant employees to their employers and how the exclusion of domestic workers from labor law protections exposes them to abuse.

The report included interviews with 99 female domestic workers in the UAE between November and December 2013. 22 of the 99 domestic helpers questioned by HRW claimed to have experienced physical abuse at the hands of their sponsors.

“They slap me in the face and kick me. They have a stick for you. If I make a small mistake they would hit parts of my body—back legs, back, and head. Sir would slap or punch me in the face. If they come back from the mall and I am not finished they would beat me,” Shelly A., a 30-year-old Filipina worker said. “They would say, ‘If you had done work then we won’t hit you.’ ”

Injustices in Kuwait

Currently, there are over 268,000 OFWs who live and work in Kuwait with 88 percent of them working as domestic helpers and 73 percent of them being female. According to the Philippine Department of Migrant Workers (DMW), there were over 24,000 cases of abuse and violation against OFWs in 2022—a significant rise from 6,500 in 2016.

It is a significant sacrifice to work abroad. Being physically and emotionally thousands of miles away from one’s family for an indefinite period is challenging, isolating, and suffocating. Rowena, a 54-year-old Filipina worker in Bahrain found herself feeling “trapped” due to canceled flights to the Philippines because of the COVID-19 pandemic as well as being underpaid by her employer. “I don’t want to make trouble. I want to go home,” Rowena said .

Beyond this, many OFWs also work abroad without knowledge of the future or the dangers they may encounter in a foreign country. Even worse, a harsh truth of working abroad is that a number of OFWs return home as dead bodies.

In January of 2023, Jullebee Ranara , a Filipina domestic helper living in Kuwait, confided in her family over the phone that she was terrified of her employer's 17-year-old son. The 35-year-old appeared to have vanished by the next day, which prompted her friends in the Gulf state to share their worries about her disappearance on social media.

Less than 24 hours later, on Jan. 21, 2023, her body was found dead, with burnt remains and a smashed skull found beside a desert near Al-Salmi Road.

Ranara was discovered to be pregnant after an autopsy, and DNA samples taken from the unborn child were confirmed to match the accused, who is the 17-year-old son of Ranara’s boss. After being apprehended, the 17-year-old perpetrator confessed to his crime.

Since 2018, there have been at least four murders of OFWs in Kuwait that have garnered national attention, including the case of 29-year-old Joanna Demafelis , whose body was kept secret in a freezer in an abandoned apartment for nearly two years. Her employers, a Syrian and a Lebanese couple, received death sentences for the murder of the victim.

In 2019, 47-year-old Constancia Lago Dayag was discovered dead after being sexually abused and beaten to death by her boss. The same year, 26-year-old Jeanelyn Villavende passed away from serious injuries inflicted by her boss, who was ultimately given a death sentence for the murder.

“These are only the high-profile ones,” Migrante International chairperson Joanna Concepcion told VICE World News. “There are other cases that are not visible. The public is not made aware of the real gravity of the rampant abuses faced by Filipino domestic helpers in Kuwait.”

Actions taken by the Philippine Government

A week after the discovery of Jullebee’s body, her remains were returned to her grieving family in Las Piñas, Philippines. Without delay, Philippine President Ferdinand “Bongbong” Marcos Jr. attended Jullebee’s wake and promised to provide the deceased’s family with all aid possible.

“I just wanted to offer my sympathies to the family and to assure them that all the assistance that they might need for the family and for whatever else, that is my promise to them,” Marcos Jr. remarked . “Their child made that sacrifice to work abroad because she has dreams for her family here.”

Recently, the DMW issued a deployment ban on new and aspiring OFWs in Kuwait, following the increasing reports of work mistreatment, including the horrific murder of Ranara.

“In order to strengthen the protection of the rights of Overseas Filipino Workers (OFWs) in Kuwait, particularly workers who are most vulnerable to abuse and exploitation, action on the applications of first-time agency-hire domestic workers bound for Kuwait is temporarily deferred effective immediately,” the DMWs said in a statement on Feb. 8, 2023.

Senator and Committee on Migrant Workers Chairperson Raffy Tulfo proposed a total deployment ban in Kuwait. “We can enter into bilateral agreements but our terms should be clear and unequivocal. If there are violators to such agreements, we have to prioritize the welfare of our overseas Filipino workers and act at the soonest possible time. Make these violators accountable and liable without concession and pursuant to our laws and international conventions,” Tulfo said in a senate inquiry.

The DMW was also tasked with working with the Department of Foreign Affairs to communicate to the Kuwaiti government the "sentiments and concerns" of the Filipino people regarding all recurrent incidents of physical and financial abuse, failure to pay monetary benefits, as well as murder committed against OFWs after the deployment ban went into effect.

The deployment ban was not well received by migrant advocacy groups, who claimed it would not provide a permanent solution to the issues surrounding labor migration. They claimed that placing bans for an extended period of time would encourage OFWs to turn to illicit means and consequently put themselves at risk for human trafficking in their desperation to find jobs abroad.

“What about the already-deployed Filipinos? Are there any steps being taken to protect them and make sure they do not suffer the same fate as Julleebee and the others?” Concepcion said to Maritime Fairtrade News. “These problems cannot be resolved with a deployment ban. The Philippine government has imposed bans many times before, but lifted them soon after when the particular cases of abuse or murder had been resolved by the courts and the perpetrators punished by death penalty or long-term imprisonment. When the deployment restarts, the abuses also start all over again.”

Much Needed Reform

OFWs often serve as the backbone of their families back home. Based on the results of a survey published by the Social Weather Stations , they found that 7 percent of Filipino households have an OFW who helps support the family. In addition, seventy-five percent of households frequently receive money from their OFW family members.

It would be difficult and inconsiderate to discourage or ban OFWs from going abroad for work. To promote a better quality of life for OFWs, the Philippine government must enact concrete policies aimed at protecting the welfare of Filipino workers. Advocacy groups, such as Migrante International are urging for reforms, including the abolition of the kafala system, which has resulted in complete employer control over domestic workers and OFWs.

For Concepcion, the country’s over-reliance on OFWs remittances is equivalent to the perpetuation of the violation and murder of Filipino workers. She believes that a viable solution to this issue involves ending the government’s labor export program and creating decent jobs domestically through meaningful land reform and national industrialization.

“The government’s determination to continue its labor export policy is totally misguided. What it should do is implement immediate measures to protect our domestic workers and OFWs abroad and long-term measures to generate decent jobs in the Philippines,” Concepcion said . “We need to end the government’s Labor Export Program and instead ensure that more jobs are created at home. Filipinos won’t have to leave the country and their families to risk their lives abroad if they have gainful and secure employment here.”

It is clear that OFWs live up to the definition of a bayani and are now considered heroes of the Philippines. However, under the shiny title of ‘bagong bayani’ lies a dark and unfortunate reality. Numerous Filipino workers suffer from various injustices including being overworked, underpaid, abused, raped, and even worse, murdered. The only way OFWs can truly be safeguarded is if the Philippine government enforces concrete and actionable policies. With this, OFWs could avoid the potential death sentence of working abroad and have the chance to be treated as they deserve to be: as modern-day heroes.

Laurinne Jamie Eugenio

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Navigating the Complexities of the Philippine Economy

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  • Topic: Economic Problem , Philippine Government , Philippines

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