Impact of the Economic Global Crisis:
Current Situation and Prospects in the Philippines
Asia in general was not affected by the current global financial crisis (1). The source of the crisis did not come from the developing countries as seen in the 1990s during the Asian crisis. In 2008 - 2009, the developed world initiated the global financial crisis with the sub prime lending implosion; thus, affected the rest of the world. The Philippines in particular did not fall into a recession since the banks were not exposed to toxic assets as seen in the European banks and other developed world. Despite the disaster in the world trade and credit markets affecting trade in the Philippines, the large volume of remittances from overseas Filipino workers and migrants helped alleviate the crisis. In addition, the Philippines had a tremendous balance of payment excess due to banking reforms implemented after the Asian financial crisis. Furthermore, the ASEAN (Association of South East Asian Nations) Swap Arrangement under the Chang Mai Initiative with a supply of foreign-exchange reserve of about US$ 2 billion, was available to the Philippines and the region; but, there was no need to use it (2).
Looking through the Lens of the World Bank. The Philippines can sustain growth that benefits the poor over the next decade and emerge stronger from the global crisis with a deeper structural reform. The World Bank foresees the Philippines to increase by 3.5 percent in 2010 and 3.8 percent in 2011, as a result of the rising remittances from overseas Filipino workers and increase in government spending. If the Philippines manages the challenges of its perennial bottlenecks (poor investment climate, reduced infrastructure spending), higher growth...
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...s to improve the nation’s competitiveness in the South East Asian region. As seen in the first quarter of 2010, growth is accelerating. However, focus on improving business efficiencies (i.e. lowering the cost of doing business) and critical infrastructures including health, education, environment and technology, are much-needed. Also since the tax collection effort is substandard, substantial improvement of the revenue collection system will raise funds for critical infrastructure and public investment. As recommended by the IMF, improved revenue collections combined with improving regulations, reducing the cost of business, investments will increase, employment opportunities will be available, and development will accelerate (7). Therefore, all these together would allow the Philippines to develop at the same rate as its neighboring South East Asian countries.
Mid September 2008 saw a significant change for the Australian economy, with the collapse of the Lehman Brothers triggering the Global Financial Crisis. The Global Financial Crisis was characterised by a tightening in the availability of money from overseas markets and resulting in governments having to intervene to maintain market stability. The Australian economy and its leaders generated considerable discussion about the prospect of a global recession, while most expected the financial crisis would have a major impact on the Australian economy, a factor that was not considered was the immediacy of its effects. The December quarter of 2008, saw business stocks devalue by $3.4 billion, the largest fall on record. In addition, there was a considerable softening in property prices, resulting in many companies/people having too much debt vs. too little wealth. With this, consumer confidence plummeted which in turn deteriorated consumption. Throughout the month of September and into October, the financial crisis spread from the United States to Europe, and all around the global economy, with economies contracting in growth.
The number of people working in Indonesia is more than any other ASEAN country. Also,it is expected to grow until 2035 which will help to increase Indonesia’s per capita income too. As the working class increases target market expands.This evidence
The IMF typically provides loans to countries whose currencies are losing value due to economic management. In return, the IMF imposes on debtor countries strict financial policies that are designed to rein in inflation and stabilize their economies. The IMF was heavily influenced by worldwide financial collapse, competitive devaluation, trade wars, high unemployment, hyperinflation in Germany and elsewhere, and general economic disintegration that occurred between the two world wars. The IMF also helped several Asian countries deal with the dramatic decline in the value of their currencies that occurred during the Asian financial crisis that started in 1997.
To begin with, it is necessary to discuss some basic information about the current system in place. Neoliberal capitalism is an economic system that promotes free market policies of liberalization, deregulation, privatization, and the cutting of social support systems. The International Monetary Fund and the World Bank are two key organizations that help spread free market policies through globalization by implementing structural adjustment programs as conditions for any aid or support to any third world developing countries. Once structural adjustment programs are put into place they tend to disrupt developing countries’ economies and end up making them even worse off than before. Before the 1980s, developing countries had a per capita growth rate of more than 3%, once structural adjustment programs were put into place growth rates dropped to 1.7% (Hickel 2012: 7).
It should be taken as a challenge then for countries like Philippines to keep up with the advancement of its neighboring countries. The Philippines is not at all an inferior country. We, Filipinos, are blessed with a rich land filled with natural resources. That is why the government should allot more attention to our agricultural sector and aid our farmers in acquiring better conditions and income. We must also not forget that change should start within us by beginning to have awareness and pride of what we have as Filipinos.
Over the years, the Philippines has gone from being one of the richest countries in Asia to being one of the poorest. It has experienced growth and development since World War II. The current administration under President Gloria Macapagal-Arroyo is aiming for a more rapid growth in the coming years. In 2004, the Philippine economy grew by 6.1% surprising everyone. In 2005, the Philippine peso appreciated by 6%, the fastest in the Asian region for that year. At present, the administration is meeting its expected target growth and is continually looking positive for the future.
The recent Global Financial Crisis (GFC) initially began with the collapse of credits and financial markets, which caused by the sub-prime mortgage crisis in the US in 2007. The sub-prime mortgages were given to high-risk lenders (with bad credit history) who were in danger of defaulting, which eventually caused a global credit crunch, where the banks were unwilling to lend to each other. In October 2008, the collapse of the major financial institutions and the crash of stock markets marked the peak of this global economic slowdown (Euromonitor International, 2008).
...would also mean a rise in poverty, and a rise in poverty would reduce the growth of GDP. To avoid this, the government should lower taxes to attract multi national companies to Indonesia thus reducing unemployment. By doing the actions mentioned, Indonesia can greatly improve its economy.
Following a period of severe and prolonged recession, the Malaysian economy has returned to growth aided by a relaxation of monetary and fiscal policies and by increased export demand, particularly in the electronics sector. While the world economic slowdown was more severe than expected and the unprecedented September 11 events in the United States had widespread implications for all economies, Malaysia was able to steer away from a major economic contraction and GDP growth for the year remained in positive territory. However, given the openness of its economy with trade accounting for about 200 percent of GDP, Malaysia was not spared from the negative effects of the United States economic slowdown. These effects came in the form of declining manufacturing production and negative export growth, particularly of electronics. Nevertheless, the government’s initiation of strong monetary and fiscal policies to stimulate economic growth through accelerating domestic economic activities and reducing the over-dependence on exports helped the nation to sustain a positive real GDP growth.
East Asia has already become the most dynamic region in the world during the last decade. The United States has been suffering from the 2008 financial crisis created by its own mismanaged financial sector, and only recently did the Federal Reserve decide to start slowing down the quantitative easing, demonstrating a slightly positive economic prospective. The Europe, which has already fully integrated itself and with the United States economically, collapsed right after the financial crisis not only because of its vast amount of investment in the US security market, but also because of its sovereign debt crisis in some of its member states. However, countries in East Asia remained robust and served as the growth engine of the world in the last few years. One of the major problems that East Asia is facing today is the lack of regionalism that resembles the NAFTA and the European Union. Nevertheless, the Cold War, the Asian financial crisis, and 9/11 terrorist attack have been very influential factors that stimulate the regionalism of East Asia.
Warwick J. McKibbin, and Andrew Stoeckel. “The Global Financial Crisis: Causes and Consequences.” Lowy Institute for International Policy 2.09 (2009): 1. PDF file.
According to Economic Forecasts from the World’s Leading Economist, Philippines continuous to enjoy strong and healthy economic growth. Exports plays an important role in the Philippines economy. Exporting products and services to other countries can greatly affect the productivity growth in the Philippines. Rising imports and retail sales are a testament to steadily strong private consumption, underpinned by strong remittances and moderate inflation, while investment activity is benefiting from improved investor confidence and rising FDI. Ironically, economic growth is sometimes unpredictable. Due to globalization, political issues, natural calamities and other factors, Philippines tend to experience down fall on its economic
Proceso Alcala- [Department of Agriculture Philippines] - Filipinos will need to support our products more. This will also help in the interests of the national economy. (Wurfel, 2006) He states that the Filipino citizens need to cooperate with the government and local producers in order to bring about and improvement in the economy.
The Philippines has long been a country with a struggling economy. Ever since World War II, they have struggled to have a steady government and labor system. Independence did not bring any social changes to the country. The hacienda system still persists in the country, where large estates are farmed by sharecroppers. More the half the population are peasants and 20 percent of the population owns 60 percent of the land. Although the sharecropper is supposed to receive half of the harvest, most of the peasant's actual income goes to paying off debts to the landowner. Poverty and conflict strained the industrial growth of the country with many Presidents trying to fix the problems, but failing to do so. Factors that have faced the country are there is almost 9 percent unemployment, and the country suffers from the consequences of a balance of trade deficit. With the resources that the Philippines have, they are capable of pulling themselves out of the economical hole they are in and being up to par with their successful neighboring countries.
As previously stated, the Philippines is an agricultural country. One of its main products is rice, which makes it economically important. Rice can be seen everywhere sold in the different types of markets whether it is small or big. For many farmers, it is their only source of income. The demand for this commodity is not only for a certain social class, but for everyone. It is also exported to other countries in the world economy. However, the Philippines does not have enough land resources to plant and provide rice crops for the people compared to other major rice producing countries in Asia so it still remains to be a rice dependent country. Infrastructure like irri...