An Economic Development for the Philippines : Closing the Gap Between the Rich and the Poor

1. Problem : POVERTY (wide gap between rich and poor)

since 1946 - 2012

1946-1972 -> Parity Rights

1973-1986 -> Direct Investment

1986-2012 -> Globalization

Being a country abundant in agricultural resources, it was only natural that we started out as an agricultural country. However, in the modern times when there is more value in finished products than in the raw products, being an agricultural country puts us into an economic disadvantage. During the years 1901 to 1941, the free trade with the Americans made us very dependent on them for finished products. As a result of the trade, industries (e.g. clothes, shoes, steel) have not grown well in the Philippines. Moreover, we remained as an agricultural country that supplies raw materials to the industrialized countries. Aside from this, foreign control of our economy due to the decisions of our previous political leaders has also contributed in our country’s continuing poverty. The Parity Rights given to the US in 1946 made the Americans equal to the Filipinos in terms of the economic factor and they were allowed to invest in the country. Given that the Americans already have an advantage in terms of technology, the Peso-Dollar rate becoming $1:P2 also gave them an additional advantage in capital formation. In 1962, President Macapagal had to borrow money from the World Bank. But to do this, the World Bank gave the conditions of removing restrictions and the 17% excise tax from our Central Bank. Doing this led to the depletion of our dollar reserve. Thus, because of the high demand of dollar given our low supply, the Peso-Dollar rate increased to $1:P3.90. By 1973 to 1986, our government allowed foreign direct investments. Then, in 1986 until the present, there was globalization. These factors led to our economy being heavily dominated by foreigners. These foreigners do not come here to help us with our economic situation, nor do they become to serve their own country. They come to our country...