Philippine Economic Performance in Regional Perspective

Abstract

The Philippine economy is experiencing its most severe depression since indepen dence. The economy actually contracted in 1983 and is likely to continue to do so in 1984. External reserves are extremely precarious, and the country's overseas debt situation is the most serious in non-communist Asia. Perhaps most importantly, there does not appear to be a consensus among the current political leadership ? nor among the major opposition groups ? concerning the country's current economic difficulties and future development strategies. The immediate cause of the present impasse is the political instability and resulting capital flight following the assassination of Benigno Aquino, the opposition leader, in August 1983. How ever, even before this event the economy was severely recessed, as indicated by the trends in almost every major economic indicator from 1982. Thus, although the current crisis has been precipitated by the post-assassination political instability, the reasons for the underlying economic malaise are more deep-seated. The purpose of this paper is to broadly assess Philippine economic perfor mance during the 1970s and early 1980s in order to understand the background to the current crisis. The paper consists of two main sections, the first being an analysis of the economy's performance and some of the more important issues in Philippine economic development. These issues ? including equity, the role of the public sector, and the foreign debt ? have been highlighted in the current distur bances, but they have been contentious in the Philippines since the 1960s and before. Secondly, the Philippine economic record is examined in regional perspec tive. East Asia is one of the most rapidly growing regions in the world, and a com parison with these economies is perhaps invidious. For this reason, we focus on Thailand, an economy with many similarities to the Philippines. We conclude with a brief discussion exploring future economic scenarios.