April 2, 2018

Philippines Economy in 2018 – Pushing the Limitations

The Residences at Greenbelt Makati by Judgefloro (Own work) [CC0], via Wikimedia Commons

Last year was an exceptional year for Philippines, the economy is still in the high point, registering an economic growth of 6.8% (GDP 2017p). Yet, the growth is seen to be centered on the middle and upper class of the society. The question arises, how do we include the bottom in the economic development? This is crucial question because the bottom can be the cause of problems of society (crime, cyclical poverty, over population and the likes).

Create Jobs for the Poorest of the Poor

We all know that the start of the problem in an economy is unemployment. Unemployment (if you don’t have a business) means you don’t have money to spend to buy food & beverages, to pay for house rental, water & electricity, to pay for transportation, and to use other services. That is, when basic needs are not met, a person could possibly shift to survival mindset and could possibly commit a crime. This coincide with Adam Smith statement that, no society could truly be happy with a portion of its population down to poverty.

What we want to prevent is the poverty cycle; that is when the poorest of the past are still the poorest of today. The solution is to give them jobs, jobs that are easy to do, jobs that doesn’t require special skills – such as construction work, road works, community works and the likes. Work in agriculture sector doesn’t also require high skill, if we teach poor people to plant they would probably earn money. The crucial investment for agriculture employment is land, seed, and irrigation.

Improve Security

We have learned last year 2017, that even though there is a massive effort to curve crime and illegal drug use, the bad guys are still there and doing their usual routine. There is much more to do when it comes to ensuring the safety of people on the street. On the other side, Philippines government is trying to boost the morale of police officers by increasing their salary.

Market Philippines Tourism Around the World

There is no doubt that Philippines has the best beaches around the world backed by a tropical climate. Surely, if all foreign travelers, looking for white sands, knows that it’s cheaper to have fun in our country then tourists arrival will hit its peak. Tourism needs to be one of the priorities of the government since it creates income to small businesses.

Improve Mass Transportation

As more people flocked to cities of Metro Manila, more and more will demand for transportation. The daily traffic on the streets of Manila is a normal scenery, while one of the solution is to add and expand roads and bridges, this would probably take long years before being implemented. Improving mass transportation like trains (MRT, LRT, PNR) would surely benefit the public, this should not take too long since we have the train rails in place.

Improve Exports and Manufacturing Sector

Manufacturing sector not only create jobs, but it also increases our foreign reserve (Dollars) if it engages in exporting of goods and lessens our imports if it engages in domestic selling. As we demand more goods from abroad (cars, cell phones, laptop and, etc.) we would also need to have enough reserves of foreign money. This is very important since this affect the value of our money (foreign exchange). If more countries demand for Philippines goods (thru manufacturing) and services (thru BPO and OFW) then we will observe that our currency will be much stronger compare to other foreign currency (e.g. USD vs. PHP); we will be able to convert Peso in higher amount of foreign currency. If we don’t have enough supply of foreign currency, that means that there is no much demand for our goods and services from abroad, that would mean that we will have difficulty of accessing foreign goods and services in the long run.

Philippines 2018 GDP Forecast

Philippines economy is projected to hit 7% GDP growth this 2018. The numbers is set to high point since the country has many rooms for growth. Private sector businesses are increasingly expanding their business locally and government is set to disburse a budget of PHP 3.767 Trillion (USD 74.79 Billion) this year.

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