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Tuesday 14 July 2015


1992-1998: Fidel V. Ramos Administration

  1. 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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