Upswing Philippines

The oldest encyclopedia in the world, Encyclopedia Britannica defined economic development
as the process whereby simple, low income national economies are transformed into modern
industrial economies. This transformation into modernization is postulated by Walt Whitman
Rostow in 1960 in his Stages of Economic Growth model. That economic development occurs
in five linear progression steps from (1) the traditional society, (2) the pre-conditions for take-
off into a self-sustaining growth, (3) the take-off, (4) the drive to maturity and (5) the age of
high mass consumption. Each stage has varying timelines from country to country. This theory
heavily influenced the blueprint of economic development plan in the Philippines. In 1974,
from a gross domestic product (GDP) share by agriculture of 31.06 % to 7.44 % in 2016 showed
a primary indication of transition from one based on agriculture to other extractive GDP sectors
– services and manufacturing industries. The rapid export-driven economic growth and the
secular migration of society from rural to urban areas offered significantly less risky to
international investors. This categorized the Philippines as one of the newly industrialized
countries (NICs) or advanced developing countries.

The economy of the Philippines is the world’s 30th largest economy by nominal GDP according
to the outlook projection last April 2018 by International Monetary Fund (IMF) for the year
2018 to 2023. The GDP growth rate of the Philippines is at 6.6%. GDP is the most commonly
used single measure of a country’s overall economic activity. It represents the total value at
constant prices of final goods and services produced by the country at a specified period of
time.

During the post-World War II, the Philippines is left with a distressed city at a stage of
economic recession, and massive food shortages. In 1946, the United States gave the
Philippines independence that led to the creation of the Third Philippine Republic. The New
Republic was off to a good start with the establishment of the Development Bank of the
Philippines and with the creation of the Bangko Sentral ng Pilipinas to promote economic
growth in a comparatively small and manageable population. The economy at these times was
not under severe pressure that can support basic economic activity like agriculture. In 1960s,
the direct share of agriculture sector landed to one-third. However, if one considers agricultural
production and agri-processing it constitutes 40% of GDP and two-thirds of jobs, arose from
agriculture. The labor force is generally unskilled and scientific and technological are
primitive. The challenges of the agriculture sector’s performance may had been from the
scarcity of resources, limited modern technology, individual economic mobility (- as policies
between landlords and farmers were just established), and the unfamiliar farming
methodologies. This is Rostow’s first stage of economic growth.

With the rise of external influences, interests and demanding world market, the Philippine
market conditions also moved towards industrialization. The movement or transitional stage is
Rostow’s second stage of economic growth. It establishes conditions necessary for further
economic growth and development. Since, the Philippine Development Plan (PDP) of 2011-
2016 included the increasing competitiveness of industry, agriculture and service sector
fostering good governance, enforcing the rule of law, peace and security. These advocacies are
also reflected in PDP of 2017-2022 through expanded-linkages with the industry and service
sectors for more efficient value-adding processes and more effective commercialization. These
are the “pre-conditions to take-off” through integrated agricultural map, collaboration efforts
among science and technology, adoption of mechanical advancement, organized farm
management and a climate-resilient retrofitted small-scale irrigation system.

As early as 1987, the Philippine strategy towards a sustainable development lies from the two
pillars: (1) economic growth and (2) environmental integrity. Ten years later, Philippine
Agenda 21 (PA21): A National Agenda for Sustainable Development for the 21st Century was
written in response to the 1992 Earth Summit in Rio de Janeiro, that a third pillar was added,
(3) social development. The PDP of 2017-2022 also grounded its development thrust on care,
change and continued growth of which the solid foundation towards a self-sustainable economy
is through a globally-competitive knowledge economy. The actual application of science and
technology innovations to agriculture, manufacturing and services sectors is a “take-off” -
Rostow’s third stage of economic growth. That investments in social and human capital
services – the primacy of developing human potential, holistic science and appropriate
technology and a participatory democracy reaped digital dividend through the prospering
business process outsourcing (BPO) industries and the emerging of digital technologies. This
shifted from the basic primary sector of agriculture to secondary sectors. This is the normal
growth of economy. Rostow believed that at this development stage, the economy becomes
self-sustaining.

Rostow’s fourth stage of economic growth is the drive to maturity. The country’s present
administration economic strategy is heavily anchored on its ambitious infrastructure
development program – Build Build Program (BBP). A maturity drive towards wider industrial
and commercial development through rapid infrastructure projects creating more jobs and
improving the lives of Filipinos. The program further seeks to solve traffic congestions that
may cost the country to loss up to PHP 6 billion daily by 2030, based on a study conducted by
JICA (Japan International Cooperation Agency). The BBP also seeks to reduced poverty by
attracting foreign investments. The following transportation infrastructure under this program
are: (a) NLEX Harbor Link Segment 10, that was completed last October 2018, (b) NLEX-
SLEX Connector Road, (c) NLEX Harbor Link Segment 8.2, (d) Metro Manila Skyway Stage
3, was completed this year January 2019 (e) BGC-Ortigas Center Link, (f) Southeast Metro
Manila Expressway, (g) Cavite-Laguna Expressway, (h) Central Luzon Link Expressway, and
(i) SLEX Toll Road 4.

The long view of the Philippine Development Plan has always been the contemporary comfort
afforded by the highly developed countries like the United States, some western European
nations and Japan. Rostow’s fifth and last stage of economic growth is high mass consumption.
At this stage, the country has become highly advanced nation that it is as good as fully
developed in all areas – economic, social, political, environmental and security. That Filipinos
have that collective ambition (in AmBisyon Natin 2040) to become predominantly middle-
class society where no one is poor, to promote long healthy life, to become smarter and more
innovative and to build a high-trust society. That if a nation is in the last stage of Rostow’s
economic growth, people enjoy having a strong, convenient, and secure lives.
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