Philippine economy remains in overdrive, but warning signs appear
A bloody anti-drug war that blurs the line between law and lawlessness and serious problems with jihadists in the south did so far not hold back the Philippine economy to maintain its high rate of growth, the June 2017 Global Economic Prospects by the World Bank suggests.
According to the report. the Philippine economy is now the world’s 10th fastest growing, expected to advance between 6.5 to 7.5 per cent this year, despite President Rodrigo Duterte’s unabatedly harsh domestic policies and his foreign policy flip-flops.
This is almost twice the country’s long-term growth which averaged 3.68 per cent from 1982 until 2017, reaching an all time high of 12.4 per cent in the fourth quarter of 1988 and a record low of -11.1 per cent in the first quarter of 1985.
However, some critics say the strong economic performance has nothing to do with the Duterte administration, on the contrary, it is thriving despite him. In fact, it bodes well for the few rich business clans in the Philippines that the president largely focuses on his pet issues such as the war on drugs and terror and leaves the business community running its own show.
Others say that Duterte just inherited an economy from his predecessor in financial health and with a tremendous momentum on the back of a vibrant service sector, a resurgent industrial sector and robust consumer spending.
But today, despite having the means, the Philippine government does little to develop infrastructure and improve healthcare and education systems. Duterte’s policies seem to observes more as a guarantee that the Philippines will become less competitive in the long run. After all, Transparency International and the Global Competitiveness reports have all raised serious doubts as to whether the current robust economic growth rates will be sustained in the future.
There are also no signs that the newly created wealth is trickling down to the poorer brackets of society. It actually never has in a substantial form, doing little in terms of improving the enormous inequality in the country where people watch nations such as Vietnam and Malaysia becoming richer from a thriving economy.
There are already warning signs on the horizon. As a first signal, the Philippines’ equity markets have underperformed the other markets of the region this year. This should be an eye opener for the administration in Manila, since stock market investors are normally the first to pull out of a country they feel is on a wrong trajectory.
A bloody anti-drug war that blurs the line between law and lawlessness and serious problems with jihadists in the south did so far not hold back the Philippine economy to maintain its high rate of growth, the June 2017 Global Economic Prospects by the World Bank suggests. According to the report. the Philippine economy is now the world’s 10th fastest growing, expected to advance between 6.5 to 7.5 per cent this year, despite President Rodrigo Duterte’s unabatedly harsh domestic policies and his foreign policy flip-flops. This is almost twice the country’s long-term growth which averaged 3.68 per cent from 1982...
A bloody anti-drug war that blurs the line between law and lawlessness and serious problems with jihadists in the south did so far not hold back the Philippine economy to maintain its high rate of growth, the June 2017 Global Economic Prospects by the World Bank suggests.
According to the report. the Philippine economy is now the world’s 10th fastest growing, expected to advance between 6.5 to 7.5 per cent this year, despite President Rodrigo Duterte’s unabatedly harsh domestic policies and his foreign policy flip-flops.
This is almost twice the country’s long-term growth which averaged 3.68 per cent from 1982 until 2017, reaching an all time high of 12.4 per cent in the fourth quarter of 1988 and a record low of -11.1 per cent in the first quarter of 1985.
However, some critics say the strong economic performance has nothing to do with the Duterte administration, on the contrary, it is thriving despite him. In fact, it bodes well for the few rich business clans in the Philippines that the president largely focuses on his pet issues such as the war on drugs and terror and leaves the business community running its own show.
Others say that Duterte just inherited an economy from his predecessor in financial health and with a tremendous momentum on the back of a vibrant service sector, a resurgent industrial sector and robust consumer spending.
But today, despite having the means, the Philippine government does little to develop infrastructure and improve healthcare and education systems. Duterte’s policies seem to observes more as a guarantee that the Philippines will become less competitive in the long run. After all, Transparency International and the Global Competitiveness reports have all raised serious doubts as to whether the current robust economic growth rates will be sustained in the future.
There are also no signs that the newly created wealth is trickling down to the poorer brackets of society. It actually never has in a substantial form, doing little in terms of improving the enormous inequality in the country where people watch nations such as Vietnam and Malaysia becoming richer from a thriving economy.
There are already warning signs on the horizon. As a first signal, the Philippines’ equity markets have underperformed the other markets of the region this year. This should be an eye opener for the administration in Manila, since stock market investors are normally the first to pull out of a country they feel is on a wrong trajectory.
