Corruption and Neoliberalism in the Philippines
International Development
SIS 637-002
International Development Paper #2
November 17, 2013 Despite this year’s onslaught of devastating earthquakes, factional rebel sieges, and most recently, record breaking typhoons, the Philippines is doing surprisingly well for itself. In fact, The Economist Intelligence Unit reports that though the wreckage caused by last week’s Supertyphoon Haiyan will likely slow GDP somewhat, economic damage will not be significant, the Eastern Visayas region accounting for only two per cent of the country’s GDP. Economically, at least, the Philippines has had a good year: the first half of 2013 saw GDP growth at 7.3 percent, the highest growth rate in Asia; it saw seen record foreign direct investment levels; moved itself from low-income to middle-income country in the World Bank country database; and for the first time, became a creditor rather than debtor to the International Monetary Fund (IMF) (Desierto, The Economist). Nevertheless, the poverty rate remains at 27.9 percent with little movement in the past five years, unemployment is at seven percent, and underemployment continues to hover around twenty percent (The Economist Intelligence Unit). Despite record growth levels in the Philippines, large numbers of Filipinos still struggle to find employment and meet their basic needs. Foreign Policy and Fund for Peace have named the Philippines as one of their top 60 failed states in the 2013 Failed States Report. Ranking 59 out of 178 countries, the Philippines scored a slightly improved but critical 82.8 (“Failed States”). Five of its worst scores occurred in: security apparatus, including issues like riots and fatalities from rebel activity; factionalized elites, including power struggles and flawed elections; group grievance, including violence between groups; state legitimacy, including corruption, level of government effectiveness, and illicit economies; and demographic pressures, including population growth, natural
SIS 637-002
International Development Paper #2
November 17, 2013 Despite this year’s onslaught of devastating earthquakes, factional rebel sieges, and most recently, record breaking typhoons, the Philippines is doing surprisingly well for itself. In fact, The Economist Intelligence Unit reports that though the wreckage caused by last week’s Supertyphoon Haiyan will likely slow GDP somewhat, economic damage will not be significant, the Eastern Visayas region accounting for only two per cent of the country’s GDP. Economically, at least, the Philippines has had a good year: the first half of 2013 saw GDP growth at 7.3 percent, the highest growth rate in Asia; it saw seen record foreign direct investment levels; moved itself from low-income to middle-income country in the World Bank country database; and for the first time, became a creditor rather than debtor to the International Monetary Fund (IMF) (Desierto, The Economist). Nevertheless, the poverty rate remains at 27.9 percent with little movement in the past five years, unemployment is at seven percent, and underemployment continues to hover around twenty percent (The Economist Intelligence Unit). Despite record growth levels in the Philippines, large numbers of Filipinos still struggle to find employment and meet their basic needs. Foreign Policy and Fund for Peace have named the Philippines as one of their top 60 failed states in the 2013 Failed States Report. Ranking 59 out of 178 countries, the Philippines scored a slightly improved but critical 82.8 (“Failed States”). Five of its worst scores occurred in: security apparatus, including issues like riots and fatalities from rebel activity; factionalized elites, including power struggles and flawed elections; group grievance, including violence between groups; state legitimacy, including corruption, level of government effectiveness, and illicit economies; and demographic pressures, including population growth, natural
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