Amidst the global uncertainties amplified by the 2008 global financial crisis, the
Philippines did not experience sharp contraction in growth. And, despite a slowdown
in economic activity, the Philippines managed to maintain positive growth.
According to official data from the National Statistics Office (NSO), in 2007, GDP
grew by 6.6 per cent, declining at 4.2 per cent in 2008 then plummeting to 1.1 per
cent in 2009. In 2010, however, the economy swung back to recovery registering a
GDP growth rate of 7.6 per cent. But again the economy decelerated in 2011, growing
by only 3.7 per cent.
The apparent resilience displayed by the Philippine economy during the recent
global crisis may be attributed to a combination of factors. First, the Philippine
banking system has an insignificant exposure to subprime and other related
securitised products. Banks are largely focused in the domestic business (Yap et al.
2009).Second, prudent policies implemented in the aftermath of the 1997 Asian
financial crisis and a more conservative approach by the banking system played a
role in limiting the impact of the 2008 global liquidity crunch (Yap et al. 2009).
Third, the Philippines introduced in 2009 a PhP330-billion fiscal package, formally
known as the Economic Resiliency Plan (ERP) that aimed at stimulating the
economy through a mix of government spending, tax cuts and public–private
partnership projects. The ERP prioritised ‘easy to implement projects’ like repair and
rehabilitation of roads, hospitals, bridges and irrigation facilities, school and government
buildings (Yap et al. 2009: 19). In October 2011, another economic stimulus
package was introduced totalling 72.1 billion Philippine pesos (US$ 1.7 billion) for
public works and poverty reduction projects. Fourth, existing social protection
programmes were strengthened and expanded to help vulnerable sectors cope with
the 2008 crisis.1
Thus, budget allocation for ‘Social Security, Welfare, and
Employment’ increased from 4.5 per cent in 2007, to 5.7 per cent in 2008 and 6.1
per cent in 2009 (Yap et al. 2009: 22).