Leyson N.

San Juan
Econ112-A
Based on the handouts given, my observations revolve around interesting
im!lications that " have reali#ed$ 1. %n-the-ground !roblems are getting &orse des!ite
the technical gro&th in 'hili!!ine economy 2. that the 'hili!!ine ()' ma*orly results
to tem!orary bene+its . that the 'hili!!ine ()' indicates a lo& utili#ation o+ resources
!otential +or gaining a com!arative advantage in the &orld. As can be observed, the
above observations are too general to be su++iciently understood right a&ay so the
+ollo&ing !aragra!hs &ill try to *usti+y these claims.
,he handouts are +ull o+ numbers, seriously. ,rying to memori#e each digit
encoded &ould have only given me much o+ a headache. ,hus, the vantage !oint that "
too- is, not to reiterate anymore the digits given but, to tell the story behind those digits
and ho& such story creates an im!act to an individual.s li+e such as mine.
Let me start &ith my understanding o+ the ()'. ,he gross domestic !roduct is
the yardstic- o+ a country.s economy. "t is the indicator as to &hether such country is
e/!eriencing an economic gro&th or recession. ,he ()' measures the total amount o+
services and +inal goods made &ithin the boundaries o+, say, the 'hili!!ine archi!elago.
,he ()' is greatly a++ected by 'ersonal 0onsum!tion E/!enditures, (overnment
'urchases, (ross )omestic 'rivate "nvestment and Net E/!orts. "t sho&s the economic
e++iciency o+ all the mar-ets and all sectors &ithin the country. Needless to say, the ()'
has a direct e++ect to the 1uality o+ living o+ the citi#ens. 2or 1
st
&orld countries, &hich
lead the economic arena in terms o+ ()', most o+ them have minimal !roblems o+
!overty, lac- o+ education or de+iciency o+ healthcare services as com!ared to third
&orld countries li-e 3imbab&e, "ndonesia, "ndia and the 'hili!!ines &here ma*ority o+ its
citi#ens are belo& the !overty line. "n these third &orld countries, &hich have a relatively
lo& ()', millions o+ !eo!le starve every day. 4illions o+ children are being +orced to
&or-, instead o+ going to school, in order to secure +ood on the table +or their +amilies at
the end o+ each day. ,here+ore, the 1uality o+ li+e in a country de!ends much on its
()'.
2rom 1 565 576 4illion !esos in 188, nominal ()' increased to 9 95: 257 in
2;;6. 2urthermore, real ()' increased +rom 65, 179 4illion !esos in 188 <18:7 base
year= to 1 9: 951 in 2;;6. As can be seen, undeniably there is a gigantic increase in
both real and nominal ()' o+ the 'hili!!ines +rom 188 to 2;;6. But does the increase
in the ()' mani+est a tangible !ositive change on the ground> 0an regular
individuals ,?the common tao@, +eel the e++ects o+ &hat is su!!osed to be an economic
gro&th> No. "n +act, +rom the 188 until no&, statistics sho&s that more and more
2ili!inos dive belo& the !overty line as the years &ent by. Each day, more 2ili!inos
starve to death des!ite such a gro&th. )es!ite a technical gro&th in the ()' as !roven
by the digits, the 'hili!!ines has earned an un+ortunate re!utation as one o+ the !oorest
o+ the ,hird Aorld countries. ,his is 1uite inconsistent &ith Economics theories, right>
Ahy do !eo!le get !oorer even i+ the digits say that the economy gets better> " thin- the
!roblem e/tends to the unsto!!able boom o+ the country.s !o!ulation and its serious
issues o+ corru!tion. As much as there is an arithmetic increase in the ()', there is
s-y-roc-eting, geometric increase in the number o+ !eo!le the government needs to
su!!ort. ,his is &here the idea o+ ()' !er ca!ita comes in. "+ &e com!are the
in+ormation given by the handouts to the gro&th o+ the !o!ulation in the 'hili!!ines,
clearly the latter outmatches the +ormer. ,his means that the additional economic
gro&th is insu++icient to cater the !rimary necessities o+ its additional citi#ens. ,he
bene+its by the increase in the economy, no&, have to be shared to more number o+
!eo!le lessening the individual bene+its that one gets. ,he second reason as to &hy
tangible bene+its are not seen to tric-le do&n the grassroots might !robably be
corru!tion. ,he 'hili!!ines is also cro&ned as the second most corru!t country in Asia.
,his means that +unds allocated by the government to su!!osedly develo! certain
sectors o+ society most li-ely do not end u! there but on the ban- accounts o+ the
!oliticians handling such +unds. ,here+ore, unless the issue o+ corru!tion and !o!ulation
boom in the 'hili!!ines is !ro!erly addressed, even a miraculously tremendous gro&th
in the ()' &ould mean little because either more !eo!le have to share the bene+its or
the bene+its *ust end u! solely +or bigoted individuals.
Secondly, as can be seen in gra!h, 'hili!!ine ()' relies much <58.1 B= on the
service sector and very minimal <1:.5B= on the Agriculture, +ishery and +orestry sector. "
+ind this very !eculiar because the service sector has the least tangible e++ect to a
country in terms o+ economic gro&th. 0all centers is !art o+ the service sector and the
'hili!!ines is -no&n +or this in the &orld. "n +act, the call center industry is getting bigger
and bigger in the 'hili!!ines &here even nurses, teachers and even doctors leave their
*obs *ust to become call center agents because lo& salaries. ,he +rustrating !art o+ call
centers and other service centers is that it does not ma-e lasting and tangible
im!rovements to a nation. Cnli-e i+ the country is +ocused on the industrial sectors li-e
Ja!an, bridges and buildings are built, the 1uality o+ !roducts are increased &ithin the
country. Ahat.s more de!ressing is that call centers in the 'hili!!ines encourage
underem!loyment and such centers are usually +or +oreign com!anies. ,his means that
our human resources are the ones being used but it.s the mar-etability o+ the +oreign
com!anies that is tangibly im!roved. 2urthermore, &e can see in the gra!h that net
+actor income +rom abroad is a substantial !art o+ the (N'. Ae e/!ort our s!eciali#ed
citi#ens abroad. Demittances may be sent to the 'hili!!ines, but the actual bene+its li-e
the im!rovement o+ lives and health by our nurses are made +or other citi#ens. "+ &e
ta-e a loo- at 2ili!ino engineers in "reland, even i+ money is remitted to the 'hili!!ines,
the actual im!rovements o+ technology and industry is being made a!!arent in those
countries at the e/!ense o+ 2ili!ino talent and s-ill.
Lastly, the gra!h o+ ()' by industrial origin sho&s that the economy utili#es a
very minimal amount o+ agriculture, +ishery and +orestry +or its ()'. Ae +ail to reali#e
that &e are an agricultural country and our greatest !otential lies in agricultural
resources. ,he 'hili!!ines is !oor country sitting on a mountain o+ gold. Ahat ha!!ens
right no& is that our lumber and other resources are being e/!orted to the other !arts o+
the &orld +or +urther !rocessing and the 2ili!inos end u! buying the end !roducts at a
higher cost. Ae e/!ort lumber to 2rance and end u! buying &ooden, high 1uality
+urniture +rom the same country even i+ the initial resources used &ere ours. Ae allo&
other countries to e/!loit our o&n resources instead o+ ma/imi#ing and utili#ing these
resources +or our o&n bene+it. ,he agricultural, +ishery and +orestry is the sector &e are
naturally rich &ith and other countries envy us +or this. " thin- it.s about time &e use the
resources in &hich &e have the highest !otential in order to gain a com!arative
advantage in the economic &orld.