The Philippines Economic Report : What are The Economic Problems in The Philippines ?

The Economy of the Philippines is the world's 34th largest Economy by nominal GDP. It is the 13th largest economy in Asia and the 3rd largest economy in the ASEAN after Indonesia and Thailand. The Philippines is one of the emerging markets and is the sixth richest in Southeast Asia by GDP per capita values, after the regional countries of Singapore, Brunei, Malaysia, Thailand, and Indonesia. Since its independence, this southeast Asian nation had massive and frequent political upheaval resulting in degradation of the Economy. This resulted in many Filipinos seeking a job overseas, which contributes 8.6 percent of the Economy. It has been listed by Goldman Sachs as the next big eleven countries. It was the second wealthiest country of Asia after Japan in 1960s. Today , sixty families in the Philipines are controlling most of the Economy. Welcome to The Atlantis Report. The Philippines is primarily considered a newly industrialized country, which has an economy transitioning from one based on agriculture to one based more on services and manufacturing. As of 2018, GDP by Purchasing power parity was estimated to be at $990 billion. Primary exports include semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, and fruits. Major trading partners include Japan, China, the United States, Singapore, South Korea, the Netherlands, Hong Kong, Germany, Taiwan, and Thailand. The Philippines has been named as one of the Tiger Cub Economies together with Indonesia and Thailand. It is currently one of Asia's fastest-growing economies. However, major problems remain; mainly having to do with alleviating the wide income and growth disparities between the country's different regions and socioeconomic classes; reducing corruption; and investing in the infrastructure necessary to ensure future growth. The Philippine economy is projected to be the 5th largest in Asia and 16th most prominent in the world by 2050. According to the PricewaterhouseCoopers, it estimates that it will be the 12th to 14th of the richest Economy in the world by 2060. While this opposes other reports from HSBC Holdings PLC, that by the year 2050, the Philippines will have been stated to surpass the Economy of Indonesia due to its yearly higher GDP growth rate of 6.5% (Second, after China). However, economic statistics may still vary depending on the performance of the government every year. The Philippines' economy is still so dependent on remittances. It is dependent on foreign remittance, and it keeps foreign investors out. Foreign investors find the 60/40 constitutional provisions such a turn off as they have built the business 100% - then upon entering the Philippines, they can only control 40% of the business AND share it with the Philippine entity who will own 60% of the equity. This is such an irony - Filipinos keep foreign investors out, then go overseas to work for 100% owned foreign households and/or firms. This is an outcome of the ultra-nationalist agenda which protects Filipino businesses at the expense of Filipino job seekers and consumers. In the Philippines, what you have is a young population where 53% is under 25 years old supplying labor to countries with an older demographic base. English being a primary language helps a lot, and in terms of opportunity cost, it is more beneficial to work abroad than to work the same job at home (where demand is higher for the price other countries are willing to pay for the same type of work). Also, it is hard to start a business here that can compete in regional markets since before you even start expanding. The local government will impose taxes to make businesses here less competitive. Also, these remittances are basically hot money coming in, increasing the disposable income of families here without the government doing anything. Now you remove that 10%, including all that money that fuel domestic consumption, then suddenly you have the Philippines contracting by at least 10%, which IMO is the difference of a stable economy and a revolution. It's the economic model the politicians have set up so that they don't have to address the underlying issues that make the Philippines poor. They're benefitting from the status quo, so what incentive would they have to change anything. Rather than fixing the corruption and inefficiency that prevents investment from coming in, the government just allows (almost encourages it seems) people to easily leave and send money back so that Filipinos can have a reasonable standard of living. The strength of the Philippines economy lies mostly in its young English speaking workforce. The main drive are the BPO/Call centers (the country is the world epicenter of call centers). Next to it is the remittances send by overseas Filipino workers. The money provided by these two engines of growth helps to support the third engine, which is consumption. The country has a lot of "big" malls. For now, the Philippines is enjoying a high rate of growth, which is good. More middle class means more sustainable growth for the country. But as every growth story, there's also risk. For the Philippines, there are three main risks. The country is not Industrializing fast enough. Its over-reliance on BPO, remittance, and consumption creates a looming import risk. A young country should focus more on creating things instead of consuming like there's no tomorrow. AI and blockchain technology could severely impact the country's BPO Industry. The efficiency offered by these new technologies could render millions of Filippino's jobless. The third one is happening as we speak. Its the onset of robotics and immigration strains. Yes, it is cheap to employ Filipinos, but for how long. And this is the main problem of the Philipines economy It is called : Sections 10 and 11, Article 12 - National Parsimony. It basically means that foreigners who do business/invest in the Philippines can only have 40% of their share while their Filipino partners get 60%. The basic economic issues in the Philippines for a long time are poverty, corruption, and lack of education. Poverty, many Filipinos think that the cause of poverty is the lack of education, which is true. For example, the parents from a poor family and who don't have an education tend to have more babies than those who are in the middle class because they don't have any knowledge of Family planning. While rich people in the Philippines only had one or two babies, they can focus on their future. The poor become poorer. The rich become richer. Aside from this are graft and corruption in the government, and the opportunities are centered in urban areas. These contribute to wealth inequality distribution in the Philippines. Employment often requires a lot of manual labor for insufficient income to support even a small family. The financial security for people that become disabled or too old to work is very weak, and as a result, many people cannot afford basic medication needs and health care. Although there are many people who show great charity for others , young adults often begin their careers with heavy financial burdens from medical expenses incurred on behalf of their parents. Corruption in the governmental infrastructure is a big issue also, although it seems that President Duerte's regime has reduced this some what. I believe that improving education, industry, and environmental awareness would do wonders for the Economy here. Limited Natural resources require better recycling, sanitation, and management of renewable resources. Regional instability is also hindering economic growth throughout the country, especially in the southern provinces. And now the Political issue in the Philippines: As you know, Good Politics leads to Good Businesses, which leads to Good Economy. Corruption; Instability; Security issues; Regulations and Government Legislations as well as Protectionist laws; Corruption, corruption, corruption, corruption on every level from 1946 to 2016 has made The Philippines a hopeless mess for the first 70 yrs of independance. Very low direct foreign investment seriously restricted by the Oligarch protectionist economic policies. This is one of the main reasons why 13 million Overseas Filipinos are legally and illegally working overseas. Poor overpopulated countries have high tariff barriers and terrible low levels of direct foreign investment to employ their own people inside their own country. Low wages and contract labor laws keep the country unproductive. Filipinos love to spend and not save. Also, you cannot seriously have strong economic GDP growth when the birth rate is the highest in Asia. Serious lack of infrastructure and corrupt delays in the movement of goods through the ports has given The Philippines a bad name also. The lack of a domestic manufacturing base, the lack of sufficient employment at a reasonable wage to sustain a fast-growing population; the over-dependence on remittances that create a dependency mindset; a lack of infrastructure to support economic growth; the concentration of economic power amongst a narrow elite; corrupt church and generally corrupt government officials. The above issues are being tackled slowly but will require a huge cash injection from China or another sympathetic power to propel the country forward. The current strong rates of economic growth are misleading as they come off the back of decades of almost no progress. The major economic problem is the lack of knowledge of political leaders and the corruption that has plagued the country remarkably started by the world-breaking looting of the Marcos regime. The oligarchs were created during the Marcos regime. The culture of corruption in the government was especially kick-started during the time when the people has so much trust in Marcos in his early years until he abused his power and tried to hold on to it for as long as he wants. Now, the Philippines is losing its track to economic boom because of corruption and poor leadership. The new President Duterte , has records of alleged corruption that are still not answered up to this day. He also appointed incompetent cabinet members who are long-time friends. Just recently, the President admitted on national television that he owes the Marcoses his winning of the elections due to the financial support from Imee Marcos (daughter of the late dictator Marcos) for his presidential bid. The allegedly corrupt leaders like senator Enrile and former President Arroyo, who were allies of Duterte, were freed from prison as soon as Duterte stepped-in as President. The track record of corruption is easily forgotten in the Philippines, which is the main hindrance to the development of the country. The country is now bombarded with fake news and propaganda to erase the history of corruption, and the government is rather focused on killing small-time drug pushers and on eliminating political enemies. The economic gains of the previous President Noynoy Aquino are in danger of being reversed due to the different ideology of the current administration. The people are still paying the debt that the Marcos regime has left, yet the current government considers Marcos a hero - a mistake that will mark in history as a sign of tolerance and turning a blind eye to grave corruption in the country. Previous President Aquino received international awards for the economic gains of the Philippines and his rigorous fight against corruption. The economic issues were addressed in the previous administration. Now they are not given proper attention. We cannot predict the future. We can only prepare for it. Everyone is preparing. I think the Philippines should too. This was The Atlantis Report. Please Like. Share. And Subscribe. Thank You.













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