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Republic of the Philippines

Don Honorio Ventura State University

Bacolor, Pampanga


Submitted by:

Alberto, James Keith M.


Submitted to:

Ms. Mharree Joie Shynne P. Gomez, MBA


The subject Economic Development is focused on seeing the improvement in

people’s lives. As said by Dudley Seers and Milton Friedman, economic development is
about outcome and is about structural change. Such change is necessary in the
Philippines. The country experiences both foreign and local struggles, ranging from
territory to political controversies, but one of its direst problems is poverty. With
millions of Filipinos living in poverty, it has become more and more urgent that the issue
be addressed.

In order to tackle and fix the issue, it is important that its meaning is first
understood. Poverty is defined as the “lack of basic capacity to participate effectively in
society.” (United Nations, 1998) It is the lack of resources that deprives a person from
basic necessities, and results in “insecurity, powerlessness, and exclusion,” as well as
“susceptibility to violence and often implies living on marginal or fragile environments,
without access to clean water or sanitation.”

22 million Filipinos are still living in poverty as of 2015. Poverty is caused by

different factors, ranging from conflicts, natural disasters, overpopulation, and lack of
job opportunities.

Poor families have an average of 5 children per family, 2 of which are likely to be
stunted due to malnutrition. Out of all the children from poor families, only half will be
able enroll in secondary school, and most will likely have trouble finding jobs in the
future due to poor school instruction.

This is worsened by the fact that the population growth rate decline in the
Philippines has been sluggish. For comparison, take a look at two neighboring countries:
Philippines and Thailand. The Philippines and Thailand had the same population growth
rate in the late 1960s to early 1970s (2.9%). Now, Thailand’s growth rate is a staggering
0.2% compared to the Philippines’ 1.5%.

However, according to studies, poverty in the Philippines has declined by 5

percent. It has gone down from 26.6 percent in 2006 to 21.6 percent in 2015 (World
Bank, 2018). Along with this, school enrollment has notably increased and health
services have increased in usage.

It is evident, therefore, that millions of Filipinos not only lack the ability to
sustain themselves, but also live in a state of low self-esteem which makes them
susceptible to all kinds of coercion especially by the ones in power. It is also obvious that
the number of people living in poverty will increase. On a brighter note, the World
Bank’s information regarding poverty’s decline gives Filipinos a sliver of hope and a
glimpse of a bright future of change. What then can the country do to encourage the
continuity of such improvement?

Main Ideas

First of all, the national government has actually been very busy. The
government has set goals and is aiming to give a comfortable life for Filipinos as stated
in the AmBisyon Natin 2040 and Philippine Development Plan 2017-2022. These plans’
goals are to turn the country into a middle-class nation.

Aside from the Philippine government, the World Bank has also proposed policy
actions to help the country attain its goals. The organization suggests increasing
competitions in telecommunications, electricity, and transport, as well as having the
government regulate and streamline administrative procedures to encourage more
investors. If the government simplifies regulations, more firms will enter the market and
will lead to higher labor productivity.

According to the census, 41.8% of the population of the Philippines is in the

school age (5 to 24 years old) (Philippines Statistics Authority, 2010) It would then be
best to imitate South Korea’s steps in their early development stages and invest highly
in education. If education and literacy improves in the country, as well as its vocational
training, then the Philippine economy would have a large and competent labor force in
the next few decades, further contributing to the country’s productivity and

Another necessary investment is healthcare. It is necessary that people,

especially the poor infants and children, receive good healthcare to ensure that they do
not suffer illnesses and malnutrition that will hinder them from achieving their full
potential as adults.

An investment in infrastructure, technology, and job opportunities to ensure the

proper absorption of the incoming labor force is also important. Creating more
opportunities and infrastructure as well as investing in new technology would certainly
boost economic growth. In a few years’ time, there will be thousands and maybe even
millions of workers from the next generation looking for work, with the large number
caused by the country’s population growth. Such growth can be used for the better
instead of viewing it as a bane of society by paving the way for them and giving them a
platform to contribute to the economy.
The Philippines was among the top three growth performers in the region in
2017 (World Bank), next only to Vietnam and China. If the economic growth were to
continue, it will contribute to poverty reduction. The poverty rate is projected to decline
from 27% in 2015 to 21.7% in 2019. The next investment the government must make
should be to turn such growth into development and increase the productivity of the
modern sectors.


Out of the multiple theories on economic development, the Neoclassical

Counter’s market friendly approach seems to be the one that would spearhead the
Philippines’ economic growth. Even in the World Bank’s proposals, it is evident that they
are suggesting that the government should intervene in nonselective ways by making
reforms to make a better climate for businesses to flourish. It is also important for the
government to invest in education to equip the future generations of workers and
leaders with the necessary training and knowledge for modern industries. The market
friendly approach should be the guideline of the Philippines to boost its economy and
subsequently reduce poverty.

With the right mix of investments in human and physical capital and
infrastructure, along with savings, foreign aid, and proper utilization and allocation of
resources, as well as continuous innovation, research and development, the country’s
poverty issue will be resolved in a few years’ time.

However, we must always remember what Jack Ma has said in the APEC Summit
in 2015. “Nobody can help you. We can only help ourselves.” It is, therefore, up to the
Filipinos now, especially those in power, to take the necessary steps for improvement
and take that glimmer of hope and turn it into actions to produce the outcomes that will
change people’s lives. Such change only comes through economic development.
Works Cited