INSIGHTS ABOUT CURRENT ECONOMY SITUATION OF THE

PHILIPPINES

The Philippines was one of the top three performers in the area of growth in

2017. The Philippine economy expanded in 2017 compared to 2016. Strong exports

served as the foundation for growth, which reduced consumption growth and severely

delayed investment development. While imports continued to expand by double digits,

the Philippines' yearly exports rapidly increased and became the major driver of

economic expansion in 2017. After two years of a fast increase, investment growth

slowed in 2017, and rising inflation hindered real wage growth and decreased the rise of

private consumption. According to forecasts, the Philippine economy will expand at an

average annual pace in both 2018 and 2019. In 2020, growth is expected to slow. Since

the economy is now expanding at its potential, it is crucial to make profitable

investments in both people and physical capital if we want to keep the economy on its

current development track. The success of the government's ambitious public

investment program depends on how well and on schedule it is implemented.

Furthermore, the government must make it clear what role the private sector will play in

its investment plan. Real wages must increase to achieve inclusive development and

shared prosperity. The Philippines' economy has made significant progress in recent

years toward achieving inclusive development, as seen by dropping poverty rates and a

declining Gini coefficient. While the unemployment rate has fallen to historic lows,

underemployment remains significant, approaching the ten-year average. More

significantly, unlike its high-performing East Asian neighbors, who have growing
industrial sectors that provide plenty of labor-intensive opportunities, the bulk of Filipino

people who leave agriculture often land in low-paying service positions. As a result,

although employment grew between 2006 and 2015, mean salaries did not increase in

real terms over that time. The two pieces needed for more shared prosperity are poor

job quality and sluggish real pay growth. but It happened before the COVID-19. The

pandemic was a harsh reminder that a growth paradigm driven by services and

remittances doesn't fare well in a pandemic. The Philippines' economy contracted

significantly in 2020, one of the most in the Association of Southeast Asian Nations

(ASEAN), and it entered negative territory for the first time since 1999. What happened?

How does one of Asia's economies that is expanding the quickest stumble? To attribute

the whole situation to the epidemic would be oversimplified. The economic structure of

the Philippines seems to make it more susceptible to disease outbreaks. Although it is

based on the movement of people, the growing sectors of tourism, services, and

remittances are all susceptible to lockdowns brought on by pandemics and a drop in

consumer confidence. Domestic lockdowns and mobility restrictions decimated the

retail, dining establishments, and hotel sectors, while international travel plummeted and

tourism came to a grinding standstill. Fortunately, the nation's business process

outsourcing (BPO) industry has shown some resilience; nonetheless, its key markets

have been severely affected by the epidemic, prompting the industry to quickly upskill

and adapt to emerging possibilities under the new normal. Additionally, it was difficult to

manage pandemics. A nation's lockdown is advantageous if it gives a nation more time

to improve its healthcare and test-trace-treat systems. These are the cornerstones of

more effective disease control. But if a nation doesn't improve these mechanisms, it
wastes the time that lockdown gives it. This seems to be the case for the Philippines,

which made headlines around the world when they put in place one of the longest

lockdowns in history during the epidemic but were still unable to flatten the COVID-19

surges.