GROUP 1  finance largely by borrowings
 External indebtness
ECONOMIC HISTORY OF THE
PHILIPPINES
Economic Development in the Philippines in the
Early 20th Century
 land owning elite group
 Strong economic position = strong political
position
After independence in 1946&Japanese
Occupation
 reliant to US
 Imports from US are not restricted
 prewar exchange rate was maintained
 Php 2=$1 written in Bell Trade Act
 1949- Philippine entered into economic
crisis
 Result instituting imports & foreign
exchange controls up to 1960
Economic Development in the Philippines in the
1950's and 60's,
 Boom of manufacturing Industry due to
Import Restriction
 Manufacturing net Domestic Product=7.7%
in the GNP
 1950- Entered in an Import Substitution
Industrialization
 Second half of 1950
 GNP went down to 4.9%
 imports outpace exports
 1962. Php 3.90=$1
 abolishment of imports
 Implementation of export led
industrialization were largely unsuccessful
Philippine Economy under Marcos
 Early 1970
 Economic rate 6.4% next to Japan
 1970= $2.3 billion
 1983=$24.4 billion
 Assassination of Benigno Aquino resulted
into political and economic crisis
 When Marcos fled outside the country in
February 1986 crisis heightened
Impact of U.S. Military Bases on the Philippine
Economy
 World Bank played a major role
 1991, the Philippine government was in
ongoing negotiation from US
 The Major domestic political issue was US
was trespass the Philippine sovereignty.
 There were three economic consideration
 Aid by US officials and as rent by Filipinos
Philippine Economy under Cory Aquino
 Philippine economy floundered under
Corazon Aquino
 1986, revived the economic growth
reaching 6.7%
 1988, began to encounter difficulties
 1990, situation exacerbated by several
natural disasters, growth declined to 3%
 GNP grew at annual average of only 1.8%
less than the 2.5% of population increase
 50% of population lived below the poverty
line
 "Policy Agenda for People-Powered
Development"
Economic Policy under Cory Aquino
 New direction in economic policy
 Foreign Policy
 1986, the gap between the rich and poor
had widened
 1987 , land reform program
  Secretary finance Jesus Estanislao
introduce a new tax measures
 1990, placed a 9 percent levy on all
imports
Economy under Ramos
 Given high remarks for handling the
economy (1992-1998)
 Economic Powerhouse
 Asian tiger cub
 High growth rates if economy and touted
as next Asian "tiger"
 poverty, corruption, and crime rate scare
away investors
 1992 , Treasury bill fell to 17.3% from 23%
 inflation was down to 9.4% from 18.7%
 Ramos abolished tariffs and preferential
terms that enriched the rich families
ASIAN ECONOMIC CRISIS IN THE PHILIPPINES IN
1997-1998
 32% - Philippine stock market
 48% - Currency against dollar
 Exports to Europe
ECONOMY UNDER ESTRADA
 Investors poured money in the Philippines
 40% - foreign ownership of business
 Negativities:
 Inconsistent monetary policy
 Slow economic growth
 Uncertainty (terrorists and insurgencies)
 didn't make much action and effort to pave
roads, set up irrigations, build schools, etc.
ECONOMY UNDER ARROYO
 30% stock market (2001)
 free market and anti-corruption policies
 Foreign Investments:
 1992 - 1.8 billion dollars
 2001 - 319 million dollars
 Growth:
 2001 - 3.4%
 2002 - 4.3%
 2003 - 4.5%
 2004 - high oil prices
 Inflation - less than 6%
 Government’s debt = 74% of GDP
 2003 and 2004 - around 5% growth rising
demand for electronic exports
 2005 - 4.7% growth (exports amounted to
40% of GDP)
 Promise of the Administration
 fight corruption
 attract foreign investment
 be less dependent on foreign energy
 create 10 million jobs by 2010
 provide clean water and electricity to every
village
 build 3000 schools
PHILIPPINE ECONOMY PICKS UP IN THE MID-2000s
 Arroyo - economic professor
 good ideas and policy schemes vs. political
troubles
 Philippines - India's main rival in BPO
 Main problems:
 poor infrastructure
 public finances needs fixing
 low tax revenues (GDP is below pre1997 levels)
 high public debt (around 75% of GDP)
 Average Annual Productivity Growth (2000-
2005)
 Philippines - 0.9%
China - 10.3%
India - 4.9%
Solution: The government might boost revenues and
spend them on sensible works
PHILIPPINES AND THE GLOBAL ECONOMIC CRISIS IN
2008 AND 2009
 trade flows = slow economy
 currency - 13.4% loss
 PSEI - slumped 48%
 Imports - electronic components
  Exports - mobile phone chips and computer
parts
 GDP forecast - 0.7% in 2009
 GDP forecast - 3.8% in 2008
PHILIPPINE ECONOMY PICKS UP IN THE 2010s UNDER
BENIGNO AQUINO III
 Philippine economy
⇧ 7.2% - 2013
⇧ 6.8% - 2012
⇧ 3.7% - 2011
⇧ 7.6 % - 2010
 5% - expected growth in GDP turns to 6%
Growth rate:
• 1st - China
 2nd - Philippines
 12% - government expenditure
 6.1% - private spending
 Philippines pledged 1 billion dollars ⇨ IMF
⇨Europe
 steady flow of positive economic news
 44th largest economy -> 16th by 2050
 GDP - 6.4% in 1st quarter
 impeachment of the chief justice of Supreme
Court
 arrest of former President Gloria Macapagal
Arroyo (accepting kickbacks and misuse of
government lottery money)
 natural disasters
 The country's new found prosperity has not
sufficiently eradicated poverty "
Philippine Economy Improves but does not Create
so many jobs
 Words from Tagarro
 "Philippines is the rising tiger economy of
Asia"
 "But only rich people are going up &up. I'm
no feeling it"
 April 2013- unemployment rate is 6.9%
Philippine Economy Grows 7.2 Percent in 2013
 "Manufacturing hub"
 Rising exports solution to the calamities
encountered (Yolanda,7.2 Bohol
earthquake)
 Philippine Gets 1st ever Investment Grade
Rating
 Fitch Rating- one of the 3 major
international debt watcher
 From BB+ to BBB-
Philippine Economy on 2014
 Government expenditure= 361 billion pesos
for the reconstruction of the damages of
the typhoon Yolanda
 Result: decrease in the Economic rate by
5.7%
Economics
 Slavin. - Economics studies the efficient
allocation of the scarce means of
production toward the satisfaction of
human wants
 Walstad&Bingham,1993 Economics is a
social science concerned with using scarce
resources to obtain maximum satisfaction
 Samuelson and Norhaus. Economics is the
study of how societies use scarce resources
to produce valuable commodities and
distribute them among different people
 Collins, 1997. Economics is the study of
production, distribution, selling, and use of
goods and services
 Parkin and Bade,1991. Economics is the
study of how people use their limited
resources to try to satisfy unlimited wants
Most concise definition
 Thomas Carlyle- Economics is the study of
how society uses its scarce resources
The Concerns of Economics
 production, distribution and consumption - as the output of one good expands,
of goods and services opportunity cost increases
 Production creation or addition of utility  Economic Growth
- increase in economy's capacity to
 Land minerals, oil, coal, soil, water, and
produce more goods and services
ground
- can be measured by the GDP or GNP
 Labor work, time, and human effort
 Wage an amount of money that a worker is
paid based on the number of hours, days,
etc., that are worked
 Salary an amount of money that an
employee is paid each year
 Capital money used by entrepreneurs to
run their business
-"Human made"
 Entrepreneurial organize production
process
 Distribution allocation of the total product
 Consumption utilization of a good or a
service
 Opportunity Costs the value of things we
give up

Full Employment

 Society's available human resources are

being maximized efficiently
 All qualified people who want to work

Full Production

 Resource being allocated in the most

efficient manner
 Physical resources and human resource

 Production Efficiency
- lowering the production level of another
product
- use of linited resources
- considering society's demand
 Productive Efficiency
- occurs when operating on the PPC
 Law of Increasing Cost