Growth and Resilience in an Uncertain Global Economy
Edited by Hal Hill and Maria Socorro Gochoco-Bautista
Unlike many Asian countries that have taken advantage of an increasingly globalized economy by pursuing export- led growth, the Philippines has relied mainly on strong domestic demand, particularly private and public consumption. The upshot is some insulation from the volatilities that occurred in world financial flows and global trade during the Asian financial crisis (AFC) and the more recent global economic recession (GER). The downside is missed growth opportunities due to limited access to global markets and the inevitably constrained growth of the domestic market. As domestic aggregate demand has come mostly in the form of consumption – and the contribution of investment has been low – domestic productivity growth has been slow and further expansion of the domestic market remains difficult. This is true despite the large amount of remittances from overseas Filipinos that have boosted national savings. Remittances have exceeded 10 per cent of gross domestic product (GDP) since 2001 and have led to consistent current account surpluses since 2003.
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