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The Impact of the Global Financial Meltdown and New Growth Strategies for the Philippines

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  • Joseph Lim

    (Department of Economics,Ateneo de Manila University)

Abstract

This paper discusses the impact of the global financial meltdown on the Philippines. To cushion future capital flow, exchange rate volatilities and export collapse, new growth strategies for the Philippines should include on the financial and capital account fronts: a) controls on short-term capital flows; b) a BBC (basket, band, crawl) system to replace the free floating exchange rate regime; and c) a bigger reliance on domestic debt financing and a shift away from external debt financing of growth to avoid external debt crises due to external shocks. In developing a vibrant domestic internal demand in order to reduce over-dependence on exports, the following will be vital: a) a strong move to correct income and regional inequalities and disparities, including strong anti-poverty policies; b) an industrial policy to make stronger linkages and productive capacity in the economy; c) fiscal reforms (especially tax) in order to generate sufficient funds to finance much needed infrastructure and human capital, and to address the grave problems of poverty across the country; d) enlightened and independent governance by a pro-poor and democratic state; and e) an end to pro-cyclical fiscal and monetary policies and a strong adoption of counter-cyclical policies

Suggested Citation

  • Joseph Lim, 2013. "The Impact of the Global Financial Meltdown and New Growth Strategies for the Philippines," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 5(2), pages 69-100, July.
    • Handle: RePEc:umk:journl:v:5:y:2013:i:2:p:69-100
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    - growth strategy; Philippines; global financial crash;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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