major problems

Topics: Macroeconomics, Philippines, Unemployment Pages: 2 (467 words) Published: November 5, 2013
Over-dependence on Global Economy The growth of the Philippines economy drastically slowed to just 3.6%.the slowdown may have been due to the on-going global crisis, it was markedly slower in comparison to other South-East Asian neighbours. Economic performance figures indicated a contraction in exports and a drop in FDI. The administration further allowed the US to even more directly influence Philippine economic policy making in its self-interest, by entering in a Partnership for Growth (PfG). These partnerships will consequently further the dependence of the economy on the global economy, whereas a regional arrangement between less unequal Southeast Asian countries is potentially useful. Greater attention has to be paid to addressing to the internal problems of the economy and enhancing domestic-oriented growth. A policy of removing structural impediments to growth has to be adopted with lesser focus on foreign investors and exporters. UnemploymentWithout a strong manufacturing industry or real Filipino industry, the economy will be unable to create enough decent paying jobs. Till then manufacturing or services will remain substandard, or of low value-addition. Steadily rising inflation has contributed to the erosion of the value of the minimum wage. Though the Aquino administration increased the minimum wage and announced cash dole-outs but lack of quality decent paying jobs and higher real wages continue to be a problem. The government's policy to encourage foreign capital, even if in just low value-added assembly operations will continue to hinder real growth and development of the manufacturing sector. The Aquino administration needs to plan over the long-term, and prepare an industrialization program that encourages value-addition manufacturing or services and builds Filipino-owned industries. Misplaced Fiscal AusterityMisplaced austerity measures and an exaggerated concern about credit ratings contracts...
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