Author: Josef T. Yap, PIDS
After two years of slow growth — owing primarily to the repercussions of the 2008 global financial and economic crisis — the Philippine economy expanded by 7.5 per cent in the first three quarters of 2010. The growth rate in 2010 is nearly equal to that of 2007 which is not surprising since economic activity in both years was boosted by election spending. The new administration has therefore benefited from favourable economic conditions. The challenge is to sustain the momentum and make economic growth more inclusive and balanced.
In the short-term, the Philippines, like many other emerging market economies, has to deal with the surge in foreign capital inflows. The peso appreciated by 5.6 per cent in the first 11 months of the year. Read more…
Author: Marife Ballesteros, PIDS
The enactment in the nineties of the Urban Development and Housing Act (UDHA) of 1992 and the Comprehensive Shelter Finance Act (CISFA) of 1994, two pro-poor housing legislations, greatly changed the Philippines’ policy on housing the poor. From a highly centralised and heavily subsidised policy, the government moved to a market-oriented and participatory approach to housing. Despite these reforms, the problems with UDHA and CISFA have not delivered housing on the scale or of the quality that is required.
The National Shelter Program (NSP), which regulates housing production, regulation and financing, is the Philippines’ banner program for low-income housing provision. Read more…
Author: Gloria O. Pasadilla, PIDS
September 2008 might well be considered the most traumatic period in recent financial history, with shocking unfolding one after the other. The US government-sponsored enterprises, Fannie Mae and Freddie Mac, went into conservatorship. AIG appealed to the US Federal Reserve Bank for a bailout. Wall Street stock prices plummeted. Financial titans like Merrill Lynch and Bear Stearns sought cover from the white knights, Bank of America and JP Morgan Chase, to avoid bankruptcy. Lehman Brothers disappeared from the financial map. And the US government committed approximately $1.4 trillion (so far) to bail out the financial sector. Although there is a greater measure of confidence now, economic conditions remain moribund and uncertain, at least until next year.
What can the Philippines learn from the global financial crisis? How does all this affect the Philippines?
Read more…
Author: Gilberto M. Llanto, PIDS
A growing number of developing countries have implemented conditional cash transfer (CCT) programs, a new intervention funded by donors that seeks to improve the health and education status of mothers and poor children, respectively, and reduce poverty in the long run. The CCT is a targeted transfer program whereby cash is directly transferred to poor household beneficiaries on condition of doing certain activities such as keeping children in school. This intervention rests on the importance given to human capital in stimulating growth and social development.
Recently, the Philippine government has designed its own version called “Pantawid Pamilyang Pilipino Program” (4Ps), allocated a budget and knocked on the doors of donors such as the World Bank for supplemental funding.
The 4Ps will provide cash to targeted poor households on condition of regular school attendance by the households’ children and visits to health centers by family members.
The 4Ps are based on the following rationale: Read more…
Special Author: Josef Yap, Philippine Institute for Development Studies
The Philippine economy slowed down sharply in 2008. GDP growth in the first three quarters of 2008 fell to 4.6 per cent, compared to 7.5 per cent in the same period a year ago. The jump in the inflation rate following a sharp rise in food and fuel prices was the first big setback. Inflation averaged 9.4 per cent in the first 11 months of 2008 after recording only 2.8 per cent in 2007.
Another factor was the sharp deceleration in construction activity following a surge related to the 2007 elections and the initial implementation of President Macapagal-Arroyo’s ambitious infrastructure program. The US recession, which officially began in December 2007, was alsao a likely contributor to the slowdown.
The economy seems continue to slow further following the chaos in the global financial system and the recession in major economies including Germany, Japan, Singapore and Hong Kong that has followed. Key multilateral agencies are unanimous in the view that the Philippines will see lower economic growth in 2009. The IMF, the World Bank and the ADB all forecast growth around 3 per cent, or at most 3.5 per cent. Growth in 2008 is estimated at 4 per cent or a touch over. In 2007 it was well over 7 per cent.
Read more…
Author: Josef Yap, President of the Philippine Institute for Development Studies (PIDS), Manila
Regional financial cooperation in East Asia flourished in the aftermath of the 1997 crisis. Driven by common experiences, objectives, and concerns—particularly the realization that fundamental reform of the international financial architecture (IFA) was not forthcoming—the ASEAN+3 countries laid out a broad framework for financial cooperation and integration. Enthusiasm for regional financial cooperation also reflected frustration among some of the countries about the emphasis on reforms of domestic financial systems. Such emphasis carried the implicit message that the root cause of the 1997 financial crisis was the lack of transparency and poor governance in their financial sectors.
The current global financial turmoil has shifted attention back to the supply side of the problem. The crisis has revived calls for fundamental reform of the IFA, revolving around proposals for new international institutions designed to regulate and stabilize international capital flows. The proposals have ranged from the modest—collective action clauses in loan contracts and greater policy coordination among G7 countries—to the ambitious, e.g. a global currency and an international clearing system using individual country currencies.
Read more…
Author: Josef Yap and Jenny D. Balboa, PIDS
Compared with other economies in East Asia, economic growth in the Philippines has been disappointing. The Philippines was, notably, not described as a ‘high-performing economy’ by the World Bank in its 1993 study of the East Asian Miracle, while Thailand, Malaysia and Indonesia were included in this group.
The per capita GDP of the Philippines was almost twice as large as that of Thailand and three times that of Indonesia in 1960. Yet by 2006, Thailand’s per capita GDP was more than double that of the Philippines while Indonesia — which has a population more than twice that of the islands — has nearly caught up.
The Philippines also lags in terms of poverty alleviation. The incidence of absolute poverty — based on the one dollar a day threshold applied to recent data — is 13.2 per cent in the Philippines, higher than Indonesia (7.7 percent) and Vietnam (8.40 percent). In stark contrast, Malaysia and Thailand have virtually eliminated absolute poverty. Inequality, based on the spread of household expenditures, is amongst the highest in developing Asia. This is a serious problem for growth as well as social welfare, as recent studies have argued that an inequitable distribution of wealth constrains economic growth and development.
Read more…
Author: Josef Yap, PIDS
The destabilising effect of the US subprime mortgage crisis and global economic turmoil has affected East Asia, with mounting inflation and escalating food and fuel prices around the region. There is serious imbalance in the world economy. This is in part due to worldwide overreliance on the US dollar – a currency that is weakening, and one in which confidence has been eroded by persistent US current account deficits – and a lack of any sort of reform in the international monetary system. In the latest PIDS Policy Note I ask: what might East Asia do?
Read more…
Authors: Dalisay Maligalig and Jose Ramon Albert, Philippine Institute for Development Studies (PIDS)
Can the Philippines achieve its goal on two key international commitments–the Millennium Development Goals (MDGs) on Education and the Education for All (EFA) Initiative–for the achievement of education for everyone? A close look at the figures shows that the country may be at risk of not achieving its goal of attaining universal primary education by 2015. Given this scenario, the government should intensify its efforts in improving basic education by developing evidence-based policies and actions. In particular, the Department of Education (DepEd) should be required to have a sound monitoring and evaluation system to assess the conditions of basic education regularly.
For more, see the full Policy Note [pdf].
Author: Shiro Armstrong
Overseas Filipino worker (OFW) remittances are huge. The economy has relied on the them as they accounted for around 11 percent of GDP in 2006 . Fourth in the world in fact, behind India, Mexico and China.
Read more…
