| Photo by Alvin Cabaltera on Unsplash
The Philippine economy is transitioning from agriculture to services and manufacturing, leading to significant economic growth and transformation. Since 2010, the country has emerged as one of the fastest-growing economies in the world, with an average annual growth rate of around 6 percent. The Philippines is a founding member of the United Nations, Association of Southeast Asian Nations, Asia-Pacific Economic Cooperation, East Asia Summit, and the World Trade Organization. The Asian Development Bank (ADB) is headquartered in the Ortigas Center in Mandaluyong, Metro Manila.
Primary exports include semiconductors and electronic products, transport equipment, garments, chemical products, copper, nickel, abaca, coconut oil, and fruits. The country’s major trading partners are Japan, China, the United States, Singapore, South Korea, the Netherlands, Hong Kong, Germany, Taiwan, and Thailand.
In 2017, the Philippine economy was projected to become the 9th largest in Asia and the 19th largest globally by 2050. Some projects predict it will be the 22nd largest in the world by 2035.
The Philippines has been named one of the Tiger Economies in Southeast Asia. However, major problems related to alleviating the disparities in comprehensive income and growth between the country’s different regions and socioeconomic classes, reducing corruption, and investing in the infrastructure necessary to ensure future growth continue to haunt the country.
In 2024, the World Economic Forum chief Børge Brende said, “[T]here is a real opportunity for this country to become a $2-trillion economy.”
The Philippines is experiencing growth similar to the mid-’60s to early ’70s.
Just as then, much of the growth was fueled by heavy borrowing, which, at the time and as is promoted by current economic planners, is being peddled as a panacea. The gross international reserves are more resilient nowadays thanks to unrelenting remittances from both contracts and, more so, from migrant Filipinos. An entire generational diaspora numbering around 10 million strong is also looking to retire back in the Philippines, particularly those from non-English speaking countries that do not have a path to citizenship. Any anecdotal accounting of the number of condominiums and other housing communities would reveal that the economy sector is almost entirely dependent on the prospect of sales to repatriating overseas Filipinos. Likewise, the tourism industry directly and indirectly provides many of the hospitality jobs created.
“The Philippine economy is challenged both by increasing debt and a growing population. Hence, the country’s per capita GDP remains in the bottom third among all nations. And for as long as overseas manpower deployment is considered a source of pride instead of a call for action to grow employment with living wages organically, no policy reform will be possible.”
Generation Diaspora, or Generation D, is driving much of the economy. As is repeatedly mentioned in this column, this influx of the returning diaspora is a finite and unsustainable source of growth. In another generation, referred to by this writer as the ‘generational existential threat,’ a necessary winding down of this bonanza is inevitable. The next generation of overseas Filipinos will at least have diminished emotional ties to their homeland, if not absent. The mirage of a windfall will continue as many retired returnees seek to augment their retirement cash flow through investments in their hometowns. For some, it could be as simple as building a new house. Some of them will fail, and some will succeed. Faced with taxes from their host countries, some will belatedly realize their unplanned tax burdens from their country of citizenship and the Philippines.
The Philippine economy is challenged both by increasing debt and a growing population. Hence, the country’s per capita GDP remains in the bottom third among all nations. And for as long as overseas manpower deployment is considered a source of pride instead of a call for action to grow employment with living wages organically, no policy reform will be possible. We’ve stooped so low in the labor totem pole as to send some of our unemployed professionals, such as teachers and midwives, to work as domestic household workers. I shudder to imagine how much deeper in the barrel we might go.
There are many remedies. Remedies that mostly start with legislative reform. The national Tax Allotment formula must be reconfigured to aid the poorest communities instead of the most populous or biggest in land area. The ‘Napoles Doctrine’ of providing livelihood projects to the marginalized countryside must be accountably implemented by tapping legitimate and established non-government organizations, including the clergy, that have known and verifiable headquarters and countrywide chapters as an address instead of cubicles in a mall.
The ownership of Overseas Filipino banks must be transferred to overseas Filipinos, both contract and migrant Filipinos. Agriculture, aquaculture, and livestock enterprises should be fully integrated and owned by farmers and fisherfolk to afford them greater control and a share of profits instead of middlemen and importers.
Every farm, fishpond, piggery, and poultry farm must be given the same status and tax incentives as companies in export processing zones so that they may receive power and tax subsidies, for example.
Displaced indigenous and other internally displaced peoples must be granted a minimum 10% share of the net profits of any venture that affects their livelihood, abode, even health, and other consequences of those ventures, such as mining, tourism, oil exploration, housing development, etc. Ideas to generate organic economic growth leading to authentic poverty alleviation are many.
The only element missing is patriotic economics.
ABOUT THE AUTHOR: Dr. Crispin Fernandez advocates for overseas Filipinos, public health, transformative political change, and patriotic economics. He is also a community organizer, leader, and freelance writer.
