Economic Development of the Philippines

Impacts of Globalization on Economic Development: 1) Through globalization, the Philippines is able to access foreign aid to improve infrastructure since it is still a developing economy. The Provincial Road Management Facility (PRM) initiative was created between Philippines and Australia to improve public access to infrastructure and services by incentives governance reform. In return for good governance reforms, the Philippines can access Australian aid to upgrade core road networks. In 2011-12, it received $21 million. 2) Globalization also allows tort tottering aid to help reduce its poverty incidence.

T includes the co-operation with international organizations such as ‘FAD (International Fund for Agricultural Development). The ‘FAD provides funds for agricultural development in order to assist rural regions that rely on agriculture for their main resource of income. Since 1978, ‘FAD has committed a total of US$168. 8 million in financing 12 agricultural development projects. This enables poor rural people to improve their incomes, food security, education and health care, and consequently increasing their quality of life. 3) The Philippine economy is still mainly based on its agricultural industry.

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Almost 80% of the country’s poor lives in rural regions, and they depend upon agriculture for their only source of income. After the country’s commitment to the WTFO, the market has been flooded with cheap imports from countries like the United States and Australia. This has reduced the competitiveness of the Philippines’ agricultural industry, and reduced the quality of life of poor rural farmers. Liberation’s due to globalization is one of the factors that have caused the poverty incidence rate to decline at a slower rate as poor rural farmers still struggle. ) Contagions of the international business cycle have also spread to the Philippines and affected its economic development. Households felt the impact of the SGF through reduced incomes and increased unemployment. As many as 208,128 domestic workers lost their Jobs between October 2008 and August 2009 due to the SGF. 37% of working adults also had their working hours shortened, wages reduced or lost their Job between February and April 2009. These economic shocks have caused the poverty incidence rate to rise as people lost their livelihoods, and consequently reduced their quality of life. ) These contagions due to the integration of the economies of the world also evidently impacted on the Philippines in the 1997 East Asian Financial Crisis. The sharp decrease in output affected the level of inflation. In 1998, inflation reached 9. 7% as the full effect of the crisis was felt from a rate of 5. 7% in 1997. The prices Egan to stabilize again in August 1999 as inflation decelerated to 5. 5%. Similarly, a total of 59,861 workers lost their Jobs in 1997, increasing to 155,198 in 1998 as the effects of the crisis were felt.

Evaluation of Strategies to Promote Economic Growth and Development 1) After the Philippines Joined the WTFO in 1995, agricultural imports significant increased and total exports decreased due to import liberation’s. The Philippines made significant commitments under WTFO agreements to liberalism its imports in order to promote economic growth as it was expected to result in agricultural export benefits for evolving countries like itself. For example, it converted quantitative restrictions to tariffs, and significantly reduced its agricultural tariffs which fell from 19. 6% in 1997 to 13. 3% in 2000.

However, this led to a slow growth of the agricultural sector of an average of only 1. 8% rather than the normal 5% in the 1995-1999 periods. The government is also holding back on supporting agriculture as evident by the low and declining snares to the agricultural sector in terms to government expenditure and loans. The proportion of total government expenditure declined from 3. 3% in 1992 to 3. 1% in 2001. The effect of this would be a reduction in employment and incomes for the rural poor as the industry that they are dependent upon is overwhelmed by cheap, subsidized competition from the United States, Australia and New Zealand.

This includes poultry, sugar and vegetables. As a result, the government realized that it had to prepare to help the sector and its farmers with the effects of liberation’s to maintain their quality of life. It promised to establish a fund for safety nets, infrastructure and competitiveness-enhancing public investments in order to counteract the negative implications of the Philippines’ entry into the WTFO on the agricultural sector and the rural Poor’s quality of life. ) The asses were also the time of the emergence of the market-oriented strategy of liberalized trade, macroeconomic stability and minimal government intervention in the market. In 1980, the Philippines first embarked on a trade liberation’s programmer under a World Bank structural adjustment loan (SAL). It included the removal of quantitative import restrictions and the reduction and rationalization of tariffs.

The government’s market and liberation’s strategy to promote economic growth in the new global economy led to the continued normalization of various sectors of the economy, such as the agricultural sector as previously discussed. The liberation’s of the economy continued as further tariff reforms continued as the effective protection rate declined from 22% to 18% between 1990 and 1995. In 1992, further foreign exchange reforms were instituted and foreign exchange controls were removed by the Central Bank to boost exports, attract foreign investments and improve the country’s external payments position. ) The Philippine government aimed to implement 66 different social protection programmer at the onset of the SGF in 2007. They existed to protect Filipinos against epicycle (hunger, illness, disability), economic (low income, unemployment), social (homelessness), and environmental risks (natural disasters), reduce poverty and enhance the social status and rights of the marginal’s. This strategy aimed to improve the livelihoods of the groups that are marginal’s by protecting them against hazards and sudden losses of income.

One of the benefits provided are conditional cash transfers. However, the social protection programmer were inadequately funded, especially when compared with other developing economies. Government spending accounted for only 0. 4%. The effectiveness of the social retention programmer was also compromised by poor targeting, resulting in high leakage rates, where the non-poor are benefited instead of the actual people who need it. An estimated 41% of the total of a National Food Authority (NFG) rice subsidy goes the non-poor.

The response of the government in 2008 by implementing the new targeting methodology of a proxy means test proved to be beneficial in improving the targeting of the programmer to reach and assist the poor. 4) After being affected by the SGF, the government recognized the need for a more effective social protection programmer. The coverage of the cash transfer programmer as significantly expanded to cover more poor households, as evident by the increase from 20,000 households benefited in 2007 to 1,000,000 benefited in 2009, which covers around 20% of the country’s poor population.

The social protection scheme was also expanded to create more Jobs and expand the quality of health care services. In February 2009, the Nurses Assigned in Rural Service (NARDS) programmer was created for unemployed nurses to work in rural areas. In June 2009, 4,046 registered nurses were deployed in selected areas. This also further helped to improve the level of health care by providing more access to skilled health personnel.