Philippines economic development has been very fast in recent years. However, in last three decades, growth rate has been fastest. Real gross domestic product for this time was estimated to be 7 percent, but growth has slowed down a bit in 2008, which came to about 4.5% because of world financial crisis.
Economic development in Philippines economy has been because of high government spending. A hard working service sector and large allowance from millions of Filipinos working abroad played an important role in Philippines economic development. Since, Macapagal-Arroyo came into power in 2001 there has been an economic growth of 5 percent. Still, Philippines needs a further increase in growth rate in order to sustain growth in economy.
More economic development of Philippines is required to alleviate poverty from that country and address imbalances in distribution of income. It also stresses on high population growth. Macapagal-Arroyo also has taken great care introduce new revenue measures to constrict expenditures of country. New developments in economy of Philippines can be expected because of positive efforts in lowering fiscal deficits, narrowing debt and debt service ratios. There has been an increase in expenditure in infrastructure of country. Economic prospects of Philippines have grown, which in turn would augur well for economic development at Philippines.
Though there has not been any negative impact on macroeconomic outlook of Philippines economy, yet this nation has faced some setbacks because of various external reasons. It has also faced challenges from regional competitors. Main focus of Philippines has been to develop employment opportunities and lessen poverty. Long term Philippines economic development can only be possible if these areas are properly taken care of.
Purchasing power parity of GDP for fiscal year 2008 was $327.2 billion, while official exchange rate of GDP was $172.3 billion. Per capita GDP as was recorded in 2008 was $3,400 and 4.5% is real growth rate in gross domestic product. Agricultural sector contributes about 13.8% to GDP, 2008 of Philippines economy and 31.9% is received from industry. From service sector of Philippines economy contribution towards Philippines GDP is about 54.3%.
Philippines economic development is also result of agricultural products, which includes corn, sugarcane, pineapples, coconuts, bananas, rice, cassavas, mangoes and pork, eggs, beef and fish. Major industries that contribute to economic development of Philippines are wood products, electronics assembly, food processing, footwear, garments, pharmaceuticals, chemicals, petroleum refining and fishing.
The ASEAN Economic Community, planned to come into effect in 2015, is expected to liberalise goods, capital and skilled labour flows in the ASEAN region. While there has been considerable progress in the area of trade integration, financial integration still lags behind. The ASEAN Banking Integration Framework, which aims to liberalise the banking market by 2020, could help pave the way for further integration and the entry of ASEAN banks into regional banking markets.
Greater banking integration in ASEAN will benefit the region.
Professor at Columbia University. Recipient of the Nobel Memorial Prize in Economic Sciences in 2001 & the John Bates Clark Medal in 1979. Author of "Freefall: America, Free Markets", "The Sinking of the World Economy", "Globalisation and its Discontents" & "Making Globalisation Work".
Professor of Economics & Director of the Earth Institute at Columbia University. Special Adviser to the UN Secretary-General on the Millennium Development Goals. Founder & co-President of the Millennium Promise Alliance.
Mario I. Blejer is a former governor of the Central Bank of Argentina and former Director of the Center for Central Banking Studies at the Bank of England. Eduardo Levy Yeyati is Professor of Economics at Universidad Torcuato Di Tella and Senior Fellow at The Brookings Institution.
James W. Harpel Professor of Capital Formation and Growth at the John F. Kennedy School of Government in Harvard University. Director of Program in International Finance and Macroeconomics at the National Bureau of Economic Research.