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Reflection On Macroeconomics

After years of economic fluctuations, the Philippine economy has grown steadily at 6-7% but slowed to 6.2% in 2018 due to weak global trade and high domestic inflation. Inflation peaked at 6.7% in 2018, greatly increasing the prices of commodities, energy, and transportation and hurting the poor. While the "Build Build Build" infrastructure program aims to boost the economy, as of April 2019 only two of 75 projects were completed, calling into question whether it will achieve its goals. The country also faces threats from a weak external performance in 2018 and risks to overseas Filipino workers from international trade tensions.

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59 views

Reflection On Macroeconomics

After years of economic fluctuations, the Philippine economy has grown steadily at 6-7% but slowed to 6.2% in 2018 due to weak global trade and high domestic inflation. Inflation peaked at 6.7% in 2018, greatly increasing the prices of commodities, energy, and transportation and hurting the poor. While the "Build Build Build" infrastructure program aims to boost the economy, as of April 2019 only two of 75 projects were completed, calling into question whether it will achieve its goals. The country also faces threats from a weak external performance in 2018 and risks to overseas Filipino workers from international trade tensions.

Uploaded by

joyce Kim
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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August 15, 2019

Economic Development

Reflection: Philippines’ Macroeconomic Policy

After regaining its independence in 1946, Philippines experienced economic fluctuation

and inconsistency due to disparate regime policies instilled for decades through colonization.

The Philippines encounter severe fall out from serious financial and banking crisis in the 1980’s.

It experienced heavy losses from successive currency devaluation and several loan

appropriations to distressed financial institutions. But the economy recovered and has been

growing until the present.

The Philippine economy has been manifesting consistent progress at 6-7% growth rate

but moderated into 6.2 in 2018 oppressed by weak global trade and high domestic inflation.

Domestic inflation peaked at 6.7% in October 2018 resulting to dramatic price hike of

commodities, energy and transport prices greatly affecting the poor. I remembered when I was

younger ₱1000 worth of groceries can accommodate our family of three for a week. Now the

same amount is only sufficient for 2 to 3 days. In the public market fish is double the price of

meat making those in budget settle for the latter or for vegetable that are way cheaper. Because

of economic fluctuation healthy lifestyle became elusive requiring one to invest more for every

commodity of survival.

Assessed by the World Bank report, nutrition is in the brink of danger. 1 out of 3 children

suffer from malnutrition.


Inflationary pressures risen from the problem of domestic production and import policy.

The removal of non-tariff barriers on importing agricultural products was also one of the policies

signed by the president. This will be stabilized by liberalization of agricultural abundance such

as the rice but suspiciously price hikes and supplies lessen. The Philippines is one of the

agriculture capitals of Asia but why are we importing an abundant crop? Questions that can be

answered by dirty schemes of the government pushing our farmers to a great height of

inferiority.

Moreover, other inflationary factors include the impact of recent tax reform “The Train

Law” which resulted to wide ranged tax collection. And an external factor “Foreign Investments

Act of 1991” which is the main objective seeking to attract, promote and welcome productive

foreign investments. Removing some barriers and making our foreign investment laws laws less

prohibitive will be useful as the Philippines be increasingly appealing venture goal, boosting our

monetary status and giving more occupations to Filipinos. But in the recent condition Filipinos

are being inferior and foreigners of our own country. The law became a freedom and legal

invasion thus proper execution must be utilized.

As part of President Rodrigo Duterte’s recent macroeconomic policy, the plan is to invest

in public infrastructure supported by the “Build Build Build” program gearing towards a

futuristic economic growth per year. The Philippines suffers from unemployment and poverty

because of poor infrastructures (Mawis,2018). With the help of this program, accelerated

infrastructure will develop industries and employment while improving the lives of Filipinos.

But as of April 30, 2019, only two out of 75 projects have been completed which costs ₱1 244

880 000 both, what about the rest? They said the program is feasible back up by the recent tax

law that produced new public revenues. In three years, the project is not halfway its completion
and were already spend too much. Will it really help us grow or the opposite? I hope not for the

latter.

Furthermore, according to the recent report of World Bank, the country’s weak external

performances contributed to an overall balance of payment deterioration and depreciation of the

Philippines peso in 2018. Balance payments is an indication of overall economic standing

companied by peso exchange rate. In April, the Philippines posted a surplus of ₱467 million

surplus a reversal from 270 million deficit last year.

“The surplus may be partly attributed to remittance inflows from overseas Filipinos and

net inflows of foreign portfolio investments during the first quarter, and net inflows of foreign

direct investments in the first two months of 2019," Bangko Sentral ng Pilipinas (BSP) said. 

Overseas Filipino worker (OFW’s) are as at risk to the rising uncertainties of

international trade war between China and US worsen by the current tension in the Middle East.

Meanwhile the peso remaining at the current rate just close to 52 pesos to the dollar

appears to be unsustainable during the Duterte administration.

Over the past decades Philippine’s undergone several ups and downs regarding economic

growth. We conquered and recovered through the years, as a cyclical process government and us

the citizens should be versatile and flexible against constraints and microeconomic pressures. We

are always the prey and vulnerable in this tug war. Government’s lack of symmetry in policy

control took to long to improve and materialize our domestic business climate. As a citizen we

should be vigilant and sensitive towards the country’s economic stability. These readings

bestowed both knowledge and awareness on how to be mindful over the monetary policies

mandated by the government that are important towards inclusive growth.

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