Since the election of reformist President Benigno Aquino, the Philippine economy has been on an unprecedented upswing, defying almost all earlier forecasts. Today, the country is among the fastest-growing economies in the world, expected to grow by up to 8 percent this year. No wonder the Philippines is seen as the next Asian tiger economy and is expected to attain a much-coveted “investment grade” rating this year.
The emerging consensus among experts is that the increasingly positive economic outlook is a result, first, of the Aquino administration’s good governance agenda focused on tough anti-corruption reforms and, second, of the larger focus on revamping the country’s flailing infrastructure through the introduction of major public-private partnership projects.
However, the picture of impressive growth obscures fundamental structural economic weaknesses that render the Philippine economy unbalanced and highly unsustainable in the long run. Many analysts also tend to overlook the extent to which the Aquino administration’s foreign policy has direct implications for the country’s economy, in particular the fact that intensifying territorial disputes with neighboring China could stall the Philippines’ economic takeoff.