ECODEPT

PHILIPPINE ECONOMY EVALUATION STATUS

The Philippines has been one of the most dynamic economies in the East Asia Pacific
region. Average annual growth increased to 6.4% between 2010-2019 from an average of 4.5%
between 2000-2009. With increasing urbanization, a growing middle class, and a large and
young population, the Philippines’ economic dynamism is rooted in strong consumer demand
supported by a vibrant labor market and robust remittances. Business activities are buoyant
with notable performance in the services sector including business process outsourcing, real
estate, tourism, and finance and insurance industries. The Philippine economy has also made
progress in delivering inclusive growth, evidenced by a decline in poverty rates and its Gini
coefficient. Poverty declined from 23.3% in 2015 to 16.6% in 2018 while the Gini coefficient
declined from 44.9 to 42.7 over the same period.

However, the COVID-19 pandemic and community quarantine measures imposed in the
country have severely impacted economic growth and poverty reduction. Growth contracted
significantly in 2020, driven by heavy declines in consumption and investment growth, and
exacerbated by the sharp slowdown in exports, tourism, and remittances. Similarly, the previous
trend in real wages, which is expected to have a positive impact on household incomes—
particularly those from the lower income groups—has been severely hampered by the impact of
the COVID-19, with negative consequences also for poverty reduction in the Philippines.

Nevertheless, the economy has started to recover with a 3.7% year-on-year expansion in
the first half of 2021, buoyed by public investment and a recovery in the external environment.
With continued recovery and reform efforts, the country is getting back on track on its way from
a lower middle-income country with a gross national income per capita of US$3,430 in 2020 to
an upper middle-income country (per capita income range of US$4,096–$12,695) in the short
term. Economic growth is expected to further rebound assuming a containment of the virus
domestically and globally, an acceleration of mass vaccination pace, and with more robust
domestic activity bolstered by greater consumer and business confidence and the public
investment momentum. The recovery is expected to also have overall positive impact on poverty
reduction.

Agriculture. Education. Health. Natural Environment. These are some of the economic
segments in which the Philippine government has worked hard to achieve development in our
country.

Agriculture

Southeastern Asian country of the Philippines faces many problems in the agricultural sector. This
sector employs around 37 percent of people in the country, being a major source of income for many
households. Yet, this sector’s share in the country’s GDP has gone down over the years, showing a
decline. The Philippines government is also decreasing funding on agriculture. Starting in 2011,

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agriculture only makes up about 4 percent of the national budget. This makes agricultural development
in the Philippines questionable. To make matters worse, the Philippines is notoriously vulnerable to
natural disasters, facing around 20 typhoons each year. For farmers, one typhoon or tropical storm
could be enough to wipe out the entire crop. Starting over with the work can be expensive and time-
consuming. For example, coconut farmers need up to 10 years for their crops to grow. The lack of
financial support coupled with frequent natural disasters leaves farmers in a compromising state.

As a result, 57 percent of agricultural households are impoverished. In comparison, non-agricultural

For these farmers, high poverty rates can be attributed to underemployment. Almost 70 percent of
underemployed Filipinos work in agriculture, forestry or fishery. While many farmers and agricultural
workers are searching for employment, the Government of the Philippines seems to be moving away
from reliance on local farmers, turning to imports instead.

In 2016, the Philippines was the biggest rice importer in the world, with close to 2.45 million tons of
imported rice. The lowered funding and employment of Filipino farmers put more than 12 million
people who work in the agricultural sector at risk. Evidently, more support needs to be given to
farmers in order to reduce poverty. Consequently, many poverty-fighting organizations target
agricultural development in the Philippines.

The International Rice Research Institute (IRRI) is the world's premier research organization dedicated
to reducing poverty and hunger through rice science; improving the health and welfare of rice farmers
and consumers; and protecting the rice-growing environment for future generations. It has developed a
rice variety that can survive natural disasters, especially floods. With funding from the Gates
Foundation, the IRRI hopes to increase rice yields by 50 percent in the next 10 years. Based on an
Indian rice variety called Swarma, this climate-smart rice has an additional flood-resistant gene. The
rice was able to grow even after two weeks of flooding, whereas most rice varieties would not survive
more than four days. This is a huge advancement that can attribute to the lingering agricultural issues
in the Philippines.

The Philipinnes government is also working towards agricultural development by implementing the
Inclusive Partnerships for Agricultural Competitiveness (IPAC) Project. Funded partially by the World
Bank, the project works on expanding the capacity of small farmers to make a living.

Through commercial agriculture and improved infrastructure, small-holder farmers can increase their
incomes and slowly become more self-reliant. Developing irrigation systems in rural farming lands
which is an important aspect of the project, makes farming more efficient for the people of the
Philippines. The project plays an important role in reducing poverty, with 20 percent of the
beneficiaries being poor farmers.

Education

From one of the most highly-educated developing countries in the world in the1980s, the Philippines’
educational outcomes had fallen short of potential.Results of the Trends in International Mathematics
and Science Study (TIMSS) in 2003 placed the country in the lowest 10 percent of participating
countries in Grades 4 and 8. Internal testing by the Department of Education or DepEd showed that
only 40 percent of 4th Grade students had mastered 3rd Grade, and 30 percent of first-year high school
students had mastered 6th Grade competencies in English, math and science.

Reforms failed to resolve chronic shortages in textbooks and school buildings, and a revised
curriculum and new instructional policies did not produce desired outcomes as real government
spending on basic education failed to catch up with population growth and inflation. However,
between 2005-2013, public education spending almost tripled which had positive effects on education
outcomes.

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The National Program Support for Basic Education (NPSBE) played an important catalytic role in
implementing the government’s Basic Education Reform Agenda (BESRA) over a six-year period
(2006-2012). The project was the first Bank operation in the country that adopted a national program
support approach which built the foundation for policy and system-wide reforms. This resulted in the
more effective use of resources that focused on implementing targeted reforms. The project supported
strategic elements and key reform thrusts of BESRA that included school-based management, teacher
standards and quality assurance.

The project likewise facilitated reforms that promoted decentralization and rationalization of the basic
education system that in turn improved equity, quality, governance and financing of services. It also
helped government better coordinate donor assistance and mobilize resources from the private sector.
An innovation of the project was that it was implemented by the government itself through the
Department of Education’s regular staff and used the country’s procurement and financial
management systems.

As of 2014, the project contributed to achieving encouraging results under BESRA:

• Between 2005 to 2013, spending for public education almost tripled while spending per basic
education student increased by around two-thirds, resulting in increased resources to improve access to
basic education services especially of the poor and disadvantaged and to improve quality of learning;

• The elementary participation rate for 6-11 year olds increased from 88.58% in 2005 to 95.24% by
2013.

• The overall enrollment numbers also improved from 13 million to 14.4 million from 2005 to 2013.
This is a substantial figure given that a substantial portion of the enrollment increase was largely from
the poorest households.

• The Grade 6 mean percentage score in math, science, Filipino, English and social studies improved
from 54.66% in 2005 to 66.9% by school year 2012-2013, based on the National Achievement test.

• The high school participation ratefor 12-15 years improved from 61.16% from 2005 to 64.8% by
2013.

• High school enrollment numbers also showed improvement from 6.3 to 7 million from 2005 to 2013.
This is also significant since there were more children attending school from poor households.

• There were improvements in math, filipino and social studies from 46.66% in 2005 to 47.93% by
2013 based on the National Achievement test scores for Year 2.

Health
The Philippines has been an active Member State of WHO, and is the home of the WHO Regional
Office for the Western Pacific. The country has played a critical role in shaping development agendas,
including the Sustainable Development Goals (SDGs). In the spirit of the SDGs, the country
cooperation strategy focuses on leaving no one behind and enhancing collaboration for health to move
the Philippines closer to universal health coverage. The work of WHO and the Department of Health
will focus on five strategic priorities: saving lives, promoting well-being, protecting health, optimizing
the health architecture and using platforms for health.

For WHO, this strategy paves the way for a new level of collaboration with the Philippines – as a
focused, transparent and committed partner that supports the country in making health a priority across
programmes and sectors. Government departments and United Nations agencies, multilateral and
bilateral partners and civil society groups have contributed to the development of this strategy.

WHO support to the Philippines will leverage the resources and expertise of the three levels of the
Organization – the Office of the WHO Representative in the Philippines (country office), the WHO
Regional Office for the Western Pacific and WHO headquarters. In doing so, WHO seeks to harness

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global knowledge for the betterment of the health of the Filipino people and provide a platform for the
Philippines to engage in regional and global health initiatives.

Being a learning organization, WHO will adapt the way it works in the Philippines to maximize its
contribution – as a place of meeting and dialogue where public health stakeholders come together to
consider challenges and develop innovative solutions. WHO will work as a group of highly motivated
professionals who look beyond so-called programmatic silos in providing health leadership across
sectors and leadership for public health.

Natural Environment

As one of the fastest growing countries in Asia, the Philippines faces environmental challenges, with
disproportionate impacts on the poor and women. Ineffective management seriously degrades the
country’s significant biodiversity resources; water and air pollution levels exceed generally accepted
healthy standards; greenhouse gas emissions are increasing from the transport and power sectors; and
the country is ranked as one of the world’s most vulnerable to the impacts of environmental disasters.

The Philippines has endeavored to improve its management of solid waste through the passage of RA
9003 or the Ecological Solid Waste Management Act that provides for a systematic, comprehensive
and ecological waste management program to ensure the protection of public health and the
environment. It mandates the bureau to provide secretariat support to the National Solid Waste
Management Commission in the implementation of the solid waste management plans and prescribes
policies to achieve the objectives of the National Ecology Center that is in charge of information
dissemination, consultation, education and training of various local government units on ecological
waste management.

The ecological solid waste management program is expected to assist Local Government Units in
implementing RA 9003 or the Ecological Solid Waste Management Act particularly in the
development of their 10 yr. SWM Plan, closure and rehabilitation of dumpsites, establishment of
Materials Recovery Facilities, and an environmentally sound disposal system.

The issuance of Guidelines and provisions of technical support in the establishment and operation of
Waste To Energy facilities will enhance the sustainability of disposal system for municipal residual
wastes to all provinces and highly urbanized areas. The significant contribution of this project is
expected to enhance the economic development of the country through formalizing the waste
collection and recycling, and promotion of job opportunities. It also helps the economy to reduce
reliance on imported oils and increased in power generation.

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