Written by Ernesto R. Gonzales.

For several decades after World War II (the 1950s and 1960s), the Philippine economy was considered next to Japan in terms of direction and performance. During this period, nationalist economic policies were created by responsive Filipino politicians like Claro M. Recto as well as budding Filipino entrepreneurs. At the time, such business leaders were able to mass produce world class products like “Ang Tibay” shoes, “Sarsaparilla” cola, and Filipino “Jeepneys.” Poverty was minimal due to a stable currency, natural capital in clean rivers, and rich habitats with vast rice fields. Today, however, many Filipinos are trapped by a persistent poverty that hovers around 60% of the total population of 110 million.  The people trapped by these miseries have become the same people who are victimized by the extra judicial killings and war on drugs currently being pursued by the administration of Rodrigo “Digong” Duterte.

What Went Wrong With the Philippine Economy?

National prosperity started to deteriorate when the government’s economic policy began to shift away from national self-reliance towards foreign direct investment.  After fifty years, economic disintegration was created in the physical (economic capital), social (cultural capital), and ecological (natural capital) habitats.  Ideally, economic capitalization would be equivalent to both natural and cultural capital. Yet, the current situation seeks to increase economic growth at the expense of natural and cultural welfare. The current trend towards foreign direct investment overtook self-reliance in national economic affairs.  Today, economic laws favour foreign investment over local businessmen, who are often isolated by stringent policies that are not conducive to their development.

After years of foreign direct investment, the national economy contracted and created a downward trend in national economic development.  High levels of growth in gross national and domestic productivity are often gained in the short term. However, there is a general level of economic degradation which has expanded the poverty and hunger of millions of Filipino citizens.  In essence, economic development has been prioritized at the expense of both cultural and natural welfare.

Duterte and Economic Nationalism

Recently, a group of academics, public servants, and business leaders gathered for a National Economic Summit to address issues of unsustainability, national progress, and the hunger and poverty of half of the entire population. The main focus of the summit was to discuss the extent of national economic disintegration in the face of high levels of growth, as well as justify the need to go back to the nationalist economic framework of figures like Recto.

The first conference of the National Economic Summit was held on February 7, 2017 at the Cigar Room of the historical Manila Hotel. During the meeting, it was argued that the national poverty situation in the Philippines was the outright result of the imposition of overzealous foreign direct investment.  Many attendees expressed their lamentations about the lack of lasting solutions to the country’s economic problems.  Arguing for the necessity of a cohesive Filipino development ideology, the summit contended that championing small and medium-scale enterprises are the key to addressing the current socio-economic malaise of the country.

The holding of the National Economic Summit is crucial to foster confidence that the current administration is not only listening but also addressing the chaotic economic situation being created by the divergence in economic gains and socio-cultural welfare. There is a clear challenge to the Duterte administration to be consistent with the mandate that “change is coming.”  If he maintains his predecessor’s economic policies and programs, as is currently being pursued by his economic managers, the national situation of chaos and confusion will continue unabated.

Ernesto R. Gonzales is a lecturer at the University of the Philippines – Manila. Image Credit: CC by Wikimedia Commons.