Global Economic Integration in the Philippines: A Blessing or a Curse?

For quite some time now, globalization has been a controversial topic and has

been one of the most widely debated issues in the world. Defined, the world

globalization refers to the spreading of products, services, technology, information as

well as jobs across national borders and cultures. In its economic sense, it refers to the

interdependence of countries around the world promoted through free or open trade.

Economic globalization is said to be the most effective means for developing countries

like the Philippines to achieve extensive development and many believe that it is the

sole way for these countries to achieve economic progress. It is also believed that if we

want to boost our economy, we have to embrace all aspects of economic globalization.

But, how true are these beliefs? In the case of our country, the Philippines, can we

honestly say that economic globalization integration is truly helping our country or shall

we say the opposite? Is global economic integration a blessing or a curse to us? Global

economic integration has truly been a blessing to our country.

To begin with, global economic integration has done great things to our country’s

trade, industries and investment sectors. Because of global economic integration,

foreign investments flow has improved. Foreign portfolios continuously come and there

have been huge foreign investments in various sectors such as industries,

infrastructures as well as large private companies in the country. In fact, according to

the UNCTAD World Investment Report of 2019, the foreign direct investment (FDI) to

the Philippines reached an average of 7.3 billion US dollars from 2016-2018. The

openness of trade between the Philippines and other countries has given the Filipino
consumers greater product choices and lower prices. Open trade also gives producers

and manufacturers choices in buying better quality capital goods and raw materials with

lower prices. This improves their productivity as well as motivating them to produce

high quality products that could surpass international quality thus giving them the

opportunities for better sales and income as well as bigger markets to export their

goods. The growth of the country’s trade and industries has placed the county to be

one of the countries with the highest per capita income in the South East Asia. Indeed,

this liberalization of trade has enabled our country to take a leap from crisis to

opportunities.

In addition, global economic integration boosts the country’s employment sector.

The influx of foreign investments in the Philippines has created jobs employing millions

of Filipinos in the country. More investments generate more jobs and this would mean

reducing poverty level. Moreover, economic globalization results to free movement of

labor giving millions of Filipinos opportunities to seek employment abroad. Overseas

Filipino workers transfer significant amount of money through remittances to their

relatives in the Philippines. These remittances have crucially contributed to the country’s

earnings in terms of foreign exchange thereby improving the nation’s position regarding

balance of payments. The Central Bank of the Philippines reported that OFW

remittances totaled to 33.5 billion US dollars in 2019, which is 3.9% higher than that of

2018. Thus, OFWs are considered to be one of the pillars of the country’s economy.

Imagine, if those Filipinos are not working abroad how much earnings will the

government lose each year? And if they have not been given the chance to find jobs in
other countries, what would happen to them? Would the government be able to provide

jobs for them when in fact there is still a huge number of Filipinos who are unemployed

at present? And if foreign investments are not present, how many more Filipinos will

remain jobless? Luckily, globalization has come to the rescue of millions of Filipinos who

are seeking for employment locally and internationally.

Furthermore, sustained growth in the Philippine economy due to economic

globalization increases the probability that poverty reduction will continue. The poverty

level in the Philippines is estimated to have been reduced from 27.0 percent in 2015

and 24.2 percent in 2017, 20.8 percent in 2019 and estimated to decline by 19.7

percent in 2020 and by 18.7 percent in 2021. This is based on the World Bank

international poverty line of 3.20 US dollars a day for lower middle income countries.

With this, about a million Filipino citizens are exiting poverty each year since 2015. Free

trade in the Philippines has allowed our economy to grow and increased the living

standards of the people. Foreign investments have provided jobs to the Filipino people

thereby reducing the number of unemployed to a significant degree. Therefore,

economic globalization in a way helps alleviate the standard of living of the Filipino

people.

However, while the above reasons clearly explain why globalization can be seen

as a blessing, there could also be reasons why it can also be seen as a curse. In terms

of trade, industries and investments, free trade is believed to limit the development of

Philippine industries. Trade and investment in the Philippines seem to benefit the
foreigners more than the Filipino people. Many argues that free trade is killing local

industries in the country as the removal of import barriers may cause a substitution of

goods within the country’s by others imported. Instead of buying the rice our farmers

produce, the government import from other countries leaving our farmers in a

disadvantage position. This is true to all other producers and manufacturers in the

country. And I guess, we can all see Filipinos who favor international brands than local

ones.

While it is true that foreign investments, especially in infrastructure, provide jobs

to the Filipino people, these jobs are mostly temporary and contractual. Once the

projects are done, the people go back to being jobless again. Also, since globalization

enables our workers to move freely, therefore holding on to our professionals or skilled

workers who are attracted by greater opportunities abroad has been a problem as it

results to the country’s labor drain. And once the OFWs finish their contract in other

countries, isn’t it that they will go back to our country as jobless also?

Although, the government keeps on reiterating that the poverty level in the

country is decreasing, many argue that there are far too many poor people in the

country and that economic globalization is hurting them more. Some studies even show

that globalization results to rising inequality because the poor do not always get the

benefits from the trade and foreign investments thus they remain poor. A study

conducted by Ponciano S. Intal Jr. posed the question ‘The Persistence of Poverty in the

Philippines: Is Globalization the Culprit?’ In his study he emphasized that economic

openness and globalization do not really translate into lower poverty rate In fact, the

number of those moving up the poverty line is too small compared to the ones who

remain below it.

To end, we all know that there are always two sides of a coin. The same thing is

true in global economic integration in the Philippines. There are advantages as well as

disadvantages to global economic integration, but we cannot deny the fact that the

benefits outweigh the costs and the gains are much more than the costs. While it is

true that global economic integration poses threat to our producers and manufacturers,

such threat can force them to be more productive and to produce better quality

products. This will lead to specialization of production. Yes, it is true also that foreign

investments may provide temporary jobs but no matter how temporary they are, they

are still jobs that can provide the people a living and while working these people learn

skills which they can use in the future. We cannot deny the issue of labor drain, and is

the issue of how much our OFWs are helping the country in terms of their remittances.

Also, globalization does not only allow OFWs to leave the country but it also allows

professionals from other countries to come and share their expertise, knowledge and

skills to the Filipino people. Lastly, it is quite true that the number of Filipino people

living below the poverty line is still too great, it is worth noting that every year there are

Filipinos who are moving beyond the poverty line. No matter how small that number is,

if it continues throughout the years to come then poverty rate will decrease significantly

in the future. Some people may argue that growth in trade and industry, as well as

foreign investments alone, are not enough to eradicate poverty totally, but still we
cannot deny the fact that one way or another they do help a lot. Therefore, there is no

point of arguing as the points given above are reasons valid enough to say that global

economic integration proves to be more beneficial than harmful to the Philippines.