Development Status

When former President Corazon “Cory” C. Aquino assumed the office back in 1986, she
inherited an economy that was facing financial ruin. There was flight in capital, the nation was
debt-ridden, national banks were in the red, inflation was rapidly increasing, and GNP was
tumbling continuously down. However, with the proper management made by the Aquino
administration, they were able to put a stop to the financial crises experienced by the country and
turned the economy around (Presidential Management Staff, 1992).
With the Aquino government’s immense efforts of extracting the country out of the
economic struggle, the poverty incidence in 1985 to 1988 significantly declined. The poverty
incidence went from 44 to 32 percent in NCR; 55.9 to 50 percent in Luzon; a high 71.2 to 59
percent in Visayas; and 63.1 to 51 percent in Mindanao. Simultaneously, business and consumer
confidence were restored in this period thanks to the new constitution and massive amount of
goodwill generated by the historical events that took place in February 1986. Due to these
happenings, a real growth in the Gross National Product was seen where it went from 4.2 percent
in 1986 to 7.2 percent in 1988. Its average annual increase was observed to be 4.3 percent in
1986 to 1991, which was a complete reversal from the six previous years that accumulated a
poor 0.6 percent average (Presidential Management Staff, 1992).
Aquino also got the economic growth to be more respectable when she took office. From
a negative percentage, she was able to get it back up to 1.9 percent in her starting year. For the
next two years, she was able to soar it further and was able to achieve 5.9 and 6.7 percent in
1987 and 1988 respectively. The industrial capacity utilization was as low as 40 percent before
Aquino took place but around this time, industries were starting to work at almost full capacity
(Hays, 2008). Analysis of each sector in the Philippines showed an impressive performance of
the construction sector that made the overall performance of industries elevate. In addition, other
external developments also helped foster industrial growth and boost imports. These include the
increase in the U.S. sugar quota to the Philippines in 1986, recovery of coconut prices and the
fall in the world prices of crude oil in late 1987 (Yap, 1996).
The first four years of presidency by Cory Aquino was a period of economic recovery. In
these years, GDP grew steadily together with consumption and investment, inflation was lowered
and less volatile, which was kept at an average of 4.5 percent and lastly, the current account
deficit and fiscal deficit were reduced as well as the country’s external debt. The World Bank
deemed these achievements impressive with the Philippines even ranking among the near top
regarding the adjustment performance of indebted countries. However, the performance of the
country went downhill the years that followed (Solon and Floro, 1993).
By 1989, the Philippines encountered macroeconomic difficulties despite all its
significant fiscal adjustments. The country was forced again to face the reality of the structural
weaknesses in its industries, rapidly rising fiscal deficit and hovering external debt, which
ultimately caused the fall of its GDP to a negative 1.2 percent in 1991. The 1989 coup attempt
and the natural disasters the country experienced also contributes to this fall. The average GNP
growth in this period has also dropped to 1.8 percent where it hit below 1 percent in Aquino’s
last two years (Hays, 2008). While the GDP and GNP simultaneously declined, the inflation rate
experienced an increase from 8.8 percent in 1988 to 13 percent in 1990 (Solon and Floro, 1993).
The Philippine economy remained stagnant in her final years and she left the office with inflation
raging at 17 percent and unemployment at slightly over 10 percent, which is higher than the
Marcos years (Loreno et.al., 2006).
References:
Hays, J. (2008). Economic History of the Philippines. Retrieved from
http://factsanddetails.com/southeast-asia/Philippines/sub5_6g/entry-3916.html#chapter-6
Loreno et al., (2006). Presidency. Retrieved from http://philpres.weebly.com/presidency2.html
Solon, O., & Floro, M. S. (1993, February). The Philippines in the 1980s: A Review of National
and Urban Level Economic Reforms. Retrieved from
http://siteresources.worldbank.org/INTURBANDEVELOPMENT/Resources/336387-
1169585750379/twurdwp1.pdf
Staff, P. M. (1992, June). malacanang.gov.ph. Retrieved from The Aquino management of the
presidency: http://malacanang.gov.ph/wp-content/uploads/ThePresidentReport.pdf

Yap, J. T. (1996, September). Inflation and Economic Growth in the Philippines. Retrieved
from https://dirp4.pids.gov.ph/ris/dps/pidsdps9611.pdf