PHILIPPINE ECONOMIC

DEVELOPMENT
About 250, 000 to 300, 000 years ago, there was already inhabitants in the
Philippines. They came from other countries in Asia through the land bridges. They
lived by hunting, fishing and food gathering. Later on, more civilized migrants
introduced primitive agriculture and handicrafts. As early as the 10th century, there
was already trade with the Arabs. Three hundred years later, the Chinese dominated
the trade from Batanes to Sulu.
THE COLONIAL RULE
The Philippine became the slave of three colonial masters: Spain,
United States and Japan. For more than three countries we were
under Spanish rule and about half a century under the American
regime, the Chinese dominated the retail trade business even
during the Spanish time.
The only economic contributions of the Spanish rule were the
encomienda, galleon trade and tobacco monopoly. All these
benefitted the colonial masters while the Filipinos were exploited.
To control Philippine trade, the United States set up free trade
through the Payne- Aldrich Act in 1909. All U.S. goods in
unlimited quantities entered the Philippines free of tax. Philippine
products also entered the United States tax free, but only primary
products like sugar, tobacco, coconut and abaca. To complete U.S.
economic exploitations, our Philippine economy was designed for
agricultural development, not on industrial development which is
the economy of the rich countries.
Our economy was at its worst during the Japanese time. Goods and services were
extremely scarce. The production of sugar stopped for lack of foreign market. As a
result, inflation became very high. This was aggravated by the printing of money by
the Japanese government. Most Filipinos starved
THE REPUBLIC: 1946-1972
The United States granted our political independence on
July 4, 1946. Filipinos rejoiced and expressed their
gratitude to the U.S. government, only to realize later than
that our independence was not meaningful. The United
States still influenced our political and economic policies.

The Americans imposed the Bell Trade Act of 1946. This

gave the American businessmen the right to exploit our
natural resources, to operate public utilities and other
businesses, and to enjoy the Pre-war free-trade agreement.
The Philippine government accepted the Bell Trade Act in
exchange for war damage payment.
When the Philippine economy plunged into its lowest
level, the United States agreed to impost import and
foreign exchange control.
The import control program of the Philippine
government provided Filipino entrepreneurs
opportunities to put up their own enterprises. There was
no foreign competition, in 1959, President Carlos
Garcia introduced the Filipino First Policy. It granted
the Filipinos preferential treatment in the Philippine
economy. Thus, more Filipino factories were
established, particularly along EDSA.
However, the control program lasted only for seven
years. In 1962, the newly elected president Diosdado
Macapagal abolished the import and foreign exchange
control. In exchange, the Philippine government
received more than 500 million dollars loan from the
United States.
The abolition of control pulled down the economy. President Ferdinand Marcos, in
his 1965 State of the Nation Address, said that more than 1,500 industries were in
distress, and hundreds of workers were jobless. Despite Marcos criticism of the
decontrol program, he was forced to continue such program due to heavy pressure
from the WB-IMF. The Philippine government was heavily indebted to the United
States, and it needed more funds for its projects. During Marcos regime, the peso
was devalued several times.
THE MARTIAL LAW REGIME
There was a fast decay in Philippine society and deterioration in the economy. To
prevent further ruins, martial law was declared.
The remaining few years of martial law was marked with economic devastation and
political instability.
Crony capitalism and dictatorship led to the destruction of the economy and society.
Finally, in February 1986, people power ended the Marcos regime.
THE AQUINO
ADMINISTRATION
Economic recovery was the first priority of the Aquino government. It stresses rural
development and the development of labor-intensive industries. Such economic
development program was planned to poverty and to generate jobs and incomes for
the poor, especially in the rural communities. The Aquino 6-year development plan
was based on the following principles:
-respect for human rights
-promotion of social justice
-wiping out of poverty
-attainment of economic growth
-market economy
THE RAMOS GOVERNMENT
Unlike the Aquino government, President Fidel V. Ramos was lucky in inheriting
political stability, together with democratic institutions in place. Likewise, long
range economic and social infrastructures have been undergoing construction.
Basically, the Ramos government in just an extension of the Aquino administration
THE ROLE OF
ENTREPRENEURSHIP IN
ECONOMIC DEVELOPMENT
There are various definitions of entrepreneurship. However, the key concept is
innovation. This refers to new or different ways of doing things, like technology,
marketing, human relations, management, and so forth. When an individual creates
new product, it is innovation. When he sells his product in a different approach, it is
also innovation.

In view of the innovative nature of entrepreneurship, it is capable of generating more

jobs, incomes, goods and services. Ultimately, this means better economy and higher
standard of living for the people. However, the real contributions of entrepreneurship
are measured in terms of the welfare of the masses. It should be Filipino
entrepreneurship for Filipino economic development- whose benefits seep down to
the level of the masses.
ECONOMIC DEVELOPMENT
AND GROWTH EXPLAINED
Development is a process while growth is a product. So, growth is the result of
development. In agriculture, the application of fertilizers, pesticides, labor, machines
and other productive input represents a process or development. In simple terms,
development is input while growth is the output.
In economics, development does not only include economic factors like money,
machines and materials, but also other factors which are non-economic, such as
culture, values, religion government and education. These mixtures of economic and
non-economic factors which are applied in the creation of goods and services
constitute economic development. Clearly, it is not effective to solve economic
problems with economic solutions alone. For instance, extravagance is not only an
economic problem. It is also caused by the unfavorable culture or social values.
In poor countries which are usually dominated by poverty, illiteracy, unjust
distribution of wealth, income and power, the concept of economic development has a
more relevant definition. Under this socio-economic context, economic development
refers to a progressive process of improving human conditions by eliminating or
reducing poverty, unemployment, disease, illiteracy, injustice and exploitation.

What are needed in poor countries are more economic activities through the
operations of factories, agricultural production, trade and service industries. In
concrete terms, such economic activities multiply jobs and incomes. However, social
justice must prevail. There should be a fair distribution of wealth, income and power.
Unfortunately, it is almost impossible to redistribute wealth in poor countries. Their
land reform programs are failures, because there was no political will on the part of
top government officials who obviously prefer to sustain the existing socio-economic
order.
In view of the very limited access to economic opportunities by the masses, a better
option is to develop an entrepreneurial class. With the strong support of the
government and the private sector, small-scale enterprises can flourish in the
countryside, such community-based projects can generate jobs and incomes for the
poor. This is all what they need to uplift their social and economic conditions.