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IDEA Magazine
December 22, 2022 (Archived)
Photo by Erik Reemst: https://www.pexels.com/photo/a-tiger-sleeping-on-the-grass-6575255/
The Philippines has been called a variety of names throughout history. The 7,641-island archipelagic nation caught the attention of many regional and international spectators. To people inside and outside of the continent, it has always been quite an intriguing place.
The Pearl of the Orient. Perlas ng Silanganan is derived from the Spanish Perla del Mar de Oriente which roughly translates to Pearl of the Orient (Sea). We utter the said words in our national anthem to describe our Motherland. It was introduced by a Spanish Jesuit priest in 1751 and later referenced by national hero Jose Rizal alluding to the natural splendor of the Philippine archipelago’s landscape.
This natural splendor, fortunately, has never ceased to captivate the eyes of many — whether they are tourists from inside and outside the country or residents. We have some of the world’s most beautiful beaches, biodiverse habitats, and other marvels of nature whose essence couldn’t be fully described in words.
The Tiger of Asia. This one’s interesting. This nickname isn’t exactly exclusive to one country. A “tiger” typically refers to an economy, most likely within Asia, experiencing rapid growth. In other words, these were breakout countries within a particular region that stood out among a pack of many.
The Philippines, Sri Lanka, and Myanmar were among the first Tigers of Asia who earned this moniker. The Philippines lived up to it — for the time being. In 1950, the Philippines had the third-highest GDP per capita in the entire Asian continent. It was only behind Japan and Turkey. In the 1960s and 1970s, the overall GDP was among the top 10 in the entire continent. The rather young republic pulled past its regional neighbors.
Manila was known as the country’s Paris of the East. The city displayed a level of grandeur and finesse that made it shine over other Southeast Asian metropolitan areas. It did not see the graying skies, bumper-to-bumper traffic congestion, trash-filled rivers, and massive overcrowding that the typical Manileno has to endure nowadays. Metro Cebu’s Carbon area was formerly the city center. The country’s second city has always been a hub prior to its exponential migration and development. However, a variety of other areas were either developed from other properties or flat out gentrified. Both of these cities remain special and unique. But they were and still are far from perfect.
The Sick Man of Asia. Unfortunately, domestic issues began holding the Philippines back. President Marcos consolidated his powers — later becoming a dictator. Marcos can take credit for the dozens of infrastructure projects that took place. His administration was responsible for the construction of major projects such as the Cultural Center of the Philippines and the San Juanico Bridge. He oversaw swift GDP growth rates, briefly nearing 10 percent right after the declaration of martial law.
However, Marcos was just as responsible for the economic mess that he left the country with. Many industries were nationalized — to the point it became inefficient. Rather than giving the means of ownership to the people, only a select few benefited from his policies. The already-wide gap between rich and poor only widened. Cronies flourished. National debt skyrocketed due to the big-ticket projects being debt financed.
Senator Ninoy Aquino’s assassination spooked investors even more. The country slid in various economic rankings, especially in terms of GDP, GDP per capita, and human development. The graph above shows a considerable slowdown in GDP per capita growth ending with a decline towards the mid-1980s. The economy became susceptible to fluctuations inside and outside. Corruption destroyed the people’s trust in institutions. Prices of basic goods plunged while wages stagnated. The Masagana 99 program aimed to help farmers bankrupted hundreds of banks. A famine took place in Negros. The country’s overall image — especially due to its faltering economy — was tarnished. The Philippines became the Sick Man of Asia. The Rising Tiger was there no more.
The Rising…Tiger…again? Marcos became increasingly unpopular. Popular demonstrations led by labor groups, the Catholic Church, activists, and other groups led to his ouster and the installation of Aquino’s widow Corazon (Cory). President Cory had a huge task to accomplish: fix the disarray left by your predecessor and appease the skeptics. Alas, her presidency was rocked with raging political turmoil. With a whopping six plots in Aquino’s first year alone, investors remained cautious. Democracy and basic civil liberties were restored. Privatization commenced. Slow but steady growth began.
Fidel Ramos, her successor and defense minister, laid down reforms that created a stronger economic foundation for growth. The Ramos years were seen as a recovery. However, successor Joseph Estrada was ousted via another uprising and sparked a wave of instability. President Gloria Arroyo took office in a tumultuous climate once again. Arroyo’s mandate became questionable after the tight 2004 election and political scandals thereafter.
Nonetheless, the country’s economy became increasingly resilient. The Philippines was able to weather the 2008-09 global financial crisis — posting positive GDP growth rates. A stable economic foundation was handed down to Cory’s son Benigno (Noynoy) Aquino III.
Cebu City in 2022. Photo courtesy of Project Lupad
President Noynoy further took advantage of this. Public-Private partnerships (PPPs) flourished. Corruption scores dramatically improved. Despite Aquino having scandals of his own, the Philippine economy received praise from several economic pundits and was awarded an investment-grade credit rating. His emphasis on good governance emboldened investors to choose the republic over its neighbors. GDP growth rates exceeding 6 to 7 percent across several quarters — some of the world’s fastest — convinced publications to once again dub the Philippines a rising tiger economy. The archipelago’s robust economy caught international headlines.
President Duterte addressed the underspending concerns. Aquino was criticized for holding the country back through not pursuing an expansionary, or bullish, fiscal policy. The country’s actual deficit — caused by spending — consistently fell below targets. Deficits, or the excess of spending over revenues, may be harmful on paper. But forgoing them may sometimes mean lost opportunities.
Finance Secretary Diokno said in 2016 that P168.9 billion put aside for infrastructure was left unspent. This could have given the economy more leverage — and Duterte’s Build, Build, Build, a bullish infrastructure package, sought to attain that. To meet Build-Build-Build’s spending demands, the government had to impose excise taxes on beverages and gasoline. These may have been well-intentioned, but they were met with fierce opposition. The poor bore the brunt disproportionately because they spend relatively more to pay for these commodities as a part of their income. Inflation began to leapfrog. At the same time, more cost of living concerns arose.
The cautiously optimistic government started falling short of expectations. GDP continued to grow to around 6 percent per annum in 2019, but missed its target of 6-6.5%. In addition, neighboring Vietnam took the spotlight from the Philippines.
The debt-to-GDP ratio, or national debt relative to GDP, began to increase to its highest level in years. Concerns were raised not on the sheer dollar amount of debt but on its rapid rise. Institutions across the country earned a worsening rep for impunity and corruption. There were a plethora of overpriced projects that came into light.
Then came the COVID-19 pandemic in late 2019 and 2020. The pandemic caused lockdowns and movement restrictions that inhibited economic activity. GDP growth slowed down by -9.6% in 2020, the worst decline in the entire Southeast Asian region. Around four million more people were pushed below the poverty line.
To make matters worse, corruption scandals became even more obvious. The Commission on Audit flagged billions worth of overpriced equipment especially from the Department of Education and the Department of Health. With the rapidly soaring debt, people’s concerns on its use were perfectly justified. Despite the decade of growth, foreign direct investment (FDI) fell short — before plunging even further during the pandemic. Investors began to favor neighbors such as Vietnam.
The Philippine economy may appear to inch closer to pre-pandemic levels. Raw GDP figures may begin to increase. But this country’s weakened institutions, lost opportunities, persistent poverty and inequality, mishandled national debt, and the current administration’s lack of concrete plans makes me question whether we still are the rising tiger we once were… or even have been. I guess we are… perhaps just sleepy.
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