1992 Economic Challenges| Ramos
Administration(1992-1988)***70% of Filipinos are in poverty
line.*** Dept to IMF: $25 billion
1.
Ramos was elected to lead a country
in which nearly 70 percent of the population lives below the poverty line. He
inherited an economy that had been plundered by the Marcos regime for 20 years
and was too feeble to provide job opportunities for a burgeoning population.
The country was burdened with a foreign debt of $25 billion, although shortly
after Ramos took office, he accepted a $5 billion debt-restructuring agreement,
negotiated by Aquino, that eased the situation. But political instability, the
rising crime rate, and chronic electric power failures all discouraged
potential investors.
2.
Ramos's decision to end 40 years of
foreign currency restrictions, however, encouraged foreign investors to take
another look at the Philippines. Economists hoped for a 2.5 percent growth in
1992 — after zero growth in 1991 — although this was almost equaled by the 2.4
percent annual growth in the population. Inflation was expected to be about 7
percent for the year.
1993 Philippine Economic Stagnation*** Dept to IMF: $31 billion
1.
Ramos repeatedly said that the
Philippines could be the next newly industrializing country in Southeast Asia,
at least by the year 2000. To that end he proposed a 'strategic framework' for
national development entitled Philippines 2000. Many barriers continued to bar
this vision. The 1993 World Bank Report on the Philippines indicated that real
per capita income in 1992 was 7.2 percent below its 1980 level and that the
number of poor citizens continued to rise. Poverty in varying degrees affected
70 percent of the Philippine population. The growth in exports in the period
studied by the World Bank was only half of the 1965-1980 figure, and the
Philippine foreign debt remained a colossal $31 billion. A considerable amount
of the national budget was used just to service the debt's interest.
2.
Aggravating the difficult economic
situation was the rapid population growth, officially estimated at 2.5 percent.
Health Secretary Juan Flavier put forward a progressive health package
emphasizing, among other major measures, a bold family planning program with
which the Catholic Church took issue.
3.
Meanwhile, natural disasters continued to
batter the Philippines and further stagnated the economy. The year brought more
than two dozen typhoons, which, along with monsoons, triggered avalanches of
mud from the still-active Mount Pinatubo as well as explosions of superheated
volcanic debris. In July the explosions sent clouds of ash as high as 5,000
feet. The eruption in February of the Mayon volcano in Legazpi, 200 miles south
of Manila, killed about 70 people. These disasters caused refugee and
environmental problems that were expected to take years to solve.
4.
On the brighter side, the Subic Bay
Metropolitan Authority made headway in using the vacated U.S. military base to
'jump start' the flagging economy. It was helped along by some $300 million in
foreign investment commitments for various development projects, from
electronics to tourism.
5.
Ramos also took steps to dismantle
the oligarchical control over the beer-based conglomerate San Miguel
Corporation and Philippine Long Distance Telephone Company, two of the biggest
corporations in the Philippines. Though criticized as insufficient, this was
seen as a positive step toward opening up the beleaguered Philippine economy.
1994 Philippine Economic Achievements.
1.
The vast improvement in the Philippine
economy in 1994 could be explained by one main factor: the end of the energy
crisis. With the construction of more power lines, what had become daily power
outages ended in November 1993, and the added electricity supply led to
increased productivity in 1994. Gross domestic product growth in 1994 was just
short of the 5 percent President Fidel Ramos had projected in his 1993 plan for
economic development.
2.
Ramos launched bold economic
initiatives in 1994, including completing the breakup of such oligarchies as
the family-owned Philippine Long Distance Telephone Company and opening up the
commercial banking system to foreign participation. Amid much controversy and
public protest, he also pushed through an expanded value-added tax measure and
asked Congress for extraordinary powers to reform the bureaucracy in such areas
as tax collection. Critics worried that Ramos was 'scattering his resources and
biting off more than he can chew.'
3.
Although the United States remained
the Philippines's largest trading partner, major investments came in from Japan,
South Korea, and Taiwan, as the Philippines began to join the regional boom. It
was unclear by year's end, however, whether this boom had improved the dire
economic situation in the countryside, where the people were poorest.
4.
As usual, the country was visited by
typhoons and heavy rains, which triggered mudflows from Mount Pinatubo, causing
loss of lives and property damage.
1995 Philippine Economic Growth
1.
The Philippine economy was expected
to grow at the rate of 5.4 percent to 5.6 percent in 1995, despite a birthrate
of 2.3 percent, one of the highest in Southeast Asia. Ramos's Philippines 2000
program of liberalized economic policies, deregulation, and privatization
earned consumer confidence and accelerated foreign investment. This performance
also lured many Filipino entrepreneurs back home after years of working abroad,
a phenomenon expected to help sustain economic progress in a country striving
to shed its image as a perennial laggard among Asian economies. Federal Express
set up a regional headquarters in the formerly U.S.-owned Subic Naval Base,
transformed into a huge industrial and export-processing hub, while Taiwan's
Acer, Inc., opened a plant to manufacture computer components. Foreign
investments generated by the Subic Bay Metropolitan Authority amounted to some
$1 billion from 1993 to 1995.
1996 Philippines Economy
1.
Speculation ran high over the successor
to Fidel Ramos, who marked the fourth year of a six-year term as president of
the Philippines in July 1996. The economy strengthened, and after many years of
conflict a peace accord was reached with the Muslim insurgents in Mindanao.
Presidential Hopefuls.
2.
Leading contenders to succeed Ramos
(who is limited by the Philippine constitution to a single term) in the 1998
election included Vice President Joseph Estrada and Senators Miriam Defensor
Santiago (the runner-up to Ramos in the 1992 elections), Gloria Macapagal
Arroyo, and Edgardo Angara. With only a simple plurality needed for victory,
endorsement by Ramos could well be the deciding factor.
1997: Philippine Economy
1.
The year 1997 was full of economic
and political turmoil for the Philippines. The rosy picture of the economy
painted by President Fidel V. Ramos in his state of the nation address in July
was soon overshadowed when a currency crisis hit Southeast Asia. And a
political crisis erupted when Ramos supporters agitated to amend the country's
constitution to enable him to run for a second term.
Economic Story.
2.
In July, when financial jitters
swept over Asia in the wake of Thailand's currency crisis, the trading band of
the Philippine peso was widened, bringing a de facto devaluation; by late 1997
the peso's value had dipped one-third for the year. The International Monetary
Fund in July extended an emergency loan of $1 billion to help shore up the
country's reserves, curb inflation, keep the deficit to 4.5 percent of the
gross domestic product, and continue to keep interest rates high. In December,
President Ramos signed legislation revamping the tax system, intended to lead
to an end to 35 years of IMF supervision of the country's economic polices.
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