The Philippine Development Plan Chapter 6: Towards a Resilient and Inclusive

Financial Sector

A Critique Paper

The Philippine Development Plan set by the government establishes 3 objectives

for achieving full potential growth; a three-type growth objective that any developing

country would like to achieve to earn its first world country status. The dream of

reducing poverty, unemployment, and stagnation in the economic activity of the

Philippine country has been and should be a vision by every president elected. We have

the 39th rank in worldwide GDP, a boost to 93.5% employment rate and an impressive

97.5% literacy rate. These set of statistics are a boost in our reputation of being

economically sound but a rank in the 85 th level of a global corruption index and a 79 in

poverty says otherwise. An outsider can see the improvement of our country but the

citizens living within the boundaries beg to differ. Over the years, we have developed a

profound skill in hiding our poverty. We are the little kid living on welfare who badly

desires to keep up with the popular cliques in school so he buys an Iphone and a Nike

shoes with his mother’s savings. He doesn’t look at the future and the need for the

savings in more important terms because he desperately wants to sit in the cool kids

table right now. Philippine delegates can brag all it want of our tall towers in Makati, the

high class setting of the Bonifacio Global City, the rise of BPOs in Pasig and Ortigas,

and the augmented tourist destinations in Cebu and Subic but as always, there are two

sides of the coin. An outsider may see prosperity but natives can see the back door to

this story. With a widening wealth inequality, the Philippines is not a newbie in the

games of socio-economic issues that it’s drowning in. Philippines severely wants to fly
but poverty and corruption is plucking its feathers away. This plan is rudimentary and

highly in its embryonic stage.

An establishment of a development plan signifies that there has been a

hindrance in the economic and financial system. The Philippine Development plan

covers the important grounds that we have been battling with since the times of our

father’s father: unemployment, poverty and corruption. The development plan has 5

strategies, namely, (1) massive investment in infrastructure, (2) transparent and

responsive governance, (3) human development and improves social services, (4)

competitiveness to generate employment, and (5) access to financing. An investment in

the infrastructure and competitiveness means public spending and generating

employment, access to financing means opportunities of credit and increased spending

with debt, improving governance means battling corruption, and social services means

distributing the wealth from its inequality. The plan is governed by the microeconomic,

macroeconomic, social, and political principles. It might be called the perfect mix of a

good development plan. A plan is a good plan until someone attempts to implements it

and realizes it doesn’t work. What is the goodness of a plan on a piece of paper without

proper execution? A poor implementation of financial policies leads to further crisis and

destruction. This story is not a what-if and a trial-and-error plan. This has not been the

first. We’ve lived and seen this before. The Philippine Development has not been the

first attempt to fix the anomalies and this certainly won’t be the last. A plan to fill the

bowl with water seems prodigious until one overlooks that the bowl has holes.

The challenges we faced in the aberrations of our economic and financial models

is extraordinary. First, there is a lack of financial literacy within the poorer provincial
states of the Philippines. They are hardly aware of the threat of inflation and the benefits

of investing. The rural areas are still in the dark on how banking sectors work and how it

benefits the improvement of an economy. This presumption is proven by the drastic

number of victims in pyramid and networking scams. Another, there is a low trust rate

aimed at the bank due to its regality or poor confidence that the bank can serve what

they need. Application for loans is strenuous, the requirements and the process for

increasing the availability of credit to further increase the ability to spend is painstakingly

high to the poor residential areas. Banks are the king of today’s economic model, as it

was highlighted in the Chapter 6. The plan amplifies five key points in improving the

financial sector. The plan aims to improve its mobilization of savings, stabilization of the

financial markets in times of crisis, supervise and regulate to prevent inefficiency,

maximize exposure to foreign opportunities, and dissipate financial literacy within

regions. There had been reservations whether giving liberation to the banking sector

while monitoring it can go hand in hand; this rather sounds too good to be true. The

action to disperse of the banking sector while improving the financial learning of the

household members is a logical action to solve deterrence of the flow of money from the

household to the business sectors. The spread of banking sectors can improve the

efficiency of allocating resources and credit to provide for the sectors that properly need

the financing to expand its capacity in production. Theoretically, an increase in financing

of the business sectors can provide an increase in employment and being employed

can fuel your spending proficiency which in turn fuels the economic activity of the

country. However, while improving the utilization of savings deems to be the safest and

the lowest risk of all, the plan intends to open the doors to a larger pool of risk in the
promise of a high potential of return. This highlights the plan to make use of the savers

and turn them into investors and borrowers as well. Investing and borrowing without a

doubt can lead to euphoric and greater means. This and all of its other perks such as

providing financing, generating income, increasing your spending power, and improving

your credit worthiness has been a reverie of any citizen wanting to taste a much better

type of living. Although this may sound promising and if all else is equal and no

economic crisis happens, which highly was never the case in a developing country, it

may look like a well thought-out plan. A promise of monitoring the financial markets,

such as the stock, bond, money market, and the ease of loan application and

distribution, while in turn giving them the right of liberty might show complications in the

long run.

To answer the question, is this the plan that can solve our problem? Is the plan

viable and applicable to our current state of thinking and living? Are the modern

housewives and mother of two even willing to sit down and listen to the functions of a

financial system? Can anyone attest to reply and fortify that the plan is invincible? We

cannot ignore the possibility of a conflict of interest by the government focusing to

implement the development plan. Present and immediate prosperity signals a

performance well done and this secures their place in the next election. Present profits

signals higher commissions for banking sectors without the stating whether the

transaction completed was an accountable and secured one. This has been all too

familiar and enough to say that we are going to a road where a financial bubble is

waiting for us at the end. However, it is irresponsible to imply that credit or debt is

malice, in fact, without the loans and deposits, our country on this age cannot survive a
longer residence of economic stagnation. We must contemplate and decide on a trade-

off. The trade-off of increasing our potential to engage in spending and help ignite the

economic activity while living on consumer debt or living miserly with the assurance of

the absence of recessions in the long run. The plan is forgetting that the market is not

run by a robot where it can process activities with underlying rules and good practices;

the market is run by people, and the people are run by their emotions; basically any one

of us with a too big to fail personality, can be fueled and be enticed with greed at the

presence of money. And basing on our history, malpractices and manipulations has

always been present whenever it can. The 1929 Great Depression was fueled by the

deregulation of the market, the explosion of the number of investors participating, and

the price manipulations of the banks to increase their profit. All of these key points that

the plan wishes to happen has the similarities to not just the great depression but to any

financial crisis experienced by a deregulated sovereign country; this must be a red flag

to anyone asking to implement as it is showing patterns of an impending crisis that is

bound to happen. Unless, the government stays true to its word that the education of

financial principles to regular citizens will be implemented and that the presence of

regulators will be present at times, to protect the market from abuse of power, and to

prevent and practice risk and crisis management, then it might not be too bad to be a

little optimistic of the future it can bring to the Philippines with this financial growth plan.