The economy of the Philippines used to be protectionist, inward-looking. Now, the country has a very liberalized, trade-oriented, open economy. According to a World Bank report, it ranks as one of the most deregulated in Asia.

The Philippines is on the right track towards a full economic recovery by the year 2000. Consider the following positive indicators:

  1. The country has achieved reasonable GDP growth - 4.3% in 1994 and 5% in 1995.
  2. Metro Manila and its neighboring provinces in Luzon are buzzing with economic activities, e.g., real estate developments, packed shopping malls, professional Filipinos returning to work at home, etc. In Visayas and Mindanao, local businesses are begin ning to prosper and foreign investments are growing.
  3. Tremendous increase in exports. Manufactured exports now account for 80% of the total exports (against 43% in 1983); while merchandise exports grew from 18% in 1994 to 29% in 1995.
  4. Steady growth of investments (10% to 12% per year since 1992). This had a favorable impact on Philippine economy - increasing technology transfer and reducing reliance on debt financing.
  5. Reduction of foreign debt servicing (from 31% in 1989 to 12.6% in 1995).
  6. Wholesale return of private Philippine companies to the Euromarkets.
  7. Reduction of public sector deficit. In fact, the government entered into surplus in 1994, the first time in 20 years. This surplus came mainly from the proceeds of privatization in 1994.
  8. Slow-down of the trade and current account deficits (9% in 1995 as compared to the average deterioration of 35% in the 1992-1994 period). In addition, there was a surplus in the overall balance of payments, aided by a 75% -increase in the remittance s of overseas contract workers.
  9. Increase in the employment rate by 3.2 million (1991 - July 1995).

To ensure that the Philippine economy continues on the right track to full recovery, President Ramos is implementing the following additional measures:

  1. Redress the government's low tax revenues by proposing new, wide-ranging tax legislations. Tax revenues are low (about 15% of GDP).
  2. Improve the deteriorating water situation.
  3. Increase saving. National savings of 17% to 18% are still below the ASEAN average of 25% to 28%.

"Source: ASIAMONEY magazine March 1996 Supplement - The Philippines Back in the Spotlight"
(C)Copyright 1996 Euromoney Publications (Jersey) Ltd."
"Materials used with permission."
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