1. Over-dependence on Global Economy
The growth of the Philippines economy drastically slowed to just 3.6% in the first three quarters of 2011, which is significantly less than the 7%-8% growth targeted by administration’s Philippine Development Plan (PDP). Though the slowdown may have been due to the ongoing global crisis, it was markedly slower in comparison to other South-East Asian neighbors. Economic performance figures indicated a contraction in exports and a drop in FDI. Though the remittances from overseas Filipinos to the country grew in the first ten months of 2011, however the compensation that overseas Filipinos received actually fell, in peso terms, due to an appreciating peso.
In 2011 the Aquino administration sought a FTA (Free Trade Agreement) with the EU and join the Trans-Pacific Partnership (TPP). The administration further allowed the US to even more directly influence Philippine economic policy making in its self-interest, by entering in a Partnership for Growth (PfG). These partnerships will consequently further the dependence of the economy on the global economy, whereas a regional arrangement between less unequal Southeast Asian countries is potentially useful. Greater attention has to be paid to addressing to the internal problems of the economy and enhancing domestic-oriented growth. A policy of removing structural impediments to growth has to be adopted with lesser focus on foreign investors and exporters.
2. Misplaced Fiscal Austerity
Practicing fiscal austerity just to get favorable credit ratings can be counterproductive. The Aquino administration, in 2011, pursued fiscal austerity and spent 2.1% less in the first 11 months than it did in the same period last year. This along with increased revenues brought down the fiscal deficit and subsequently international credit rating agencies Standard and Poor’s, Moody’s and Fitch upgraded the country’s credit ratings and outlooks. In 2011 the government cut spending on economic services, including infrastructure, in the same vein did not fill in for shortfalls in education, health and housing sectors. As a result, over the first three quarters of 2011, income from public construction contracted by about 46% whereas government consumption reduced by a mere 1.7% in comparison to the same period last year.
Misplaced austerity measures and an exaggerated concern about credit ratings contracts the economy, reduces demand and undermines future growth. The proposed public private partnerships (PPPs) are a poor substitute to real investment and public expenditure, because the former are majorly driven by short-term profit while the latter play a vital role to create development.
These are just some of the economic challenges looming large over the Philippines. The country is facing significant decline in industrial production, gross domestic product, income and employment and sales. The Aquino presidency supposedly is getting the support of the people, as indicated by its high approval ratings, for the necessary economic measures that are in the general public interest. In 2011, the Aquino administration’s policy choices to give greater weight to narrow foreign and domestic elite interests, unfortunately, underscores the challenge of pushing for real reform in 2012.
3. Import-Export Imbalance
The negative trade is heavy and only counterbalanced by the service account surplus. Over the last two decades, Philippine exports have shifted from commodity-based products to manufactured goods. In the midst of the current global economic recession, the exports of electronics, garments and textiles are yet to reach a level of import neutralization.We can solve it by apply a tax directly to consumer and every one confront the problem in their money and not in the check in to the country.
We need to improve more moral consumer philosophy. We need to improve more native industry. We need to improve more native export. We need to improve more cooperatives applications to best micro economy. We need to improve more citizen empowerment by Personal Monetary emitting. We need to improve more popular access to micro credits.
4. Scarcity of Resources.
Scarcity is the fundamental economic problem of having humans who have unlimited wants and needs in a world of limited resources. It states that society has insufficient productive resources to fulfill all human wants and needs. Alternatively, scarcity implies that not all of society’s goals can be pursued at the same time; trade-offs are made of one good against others. In an influential 1932 essay, Lionel Robbins defined economics as “the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.
Poverty is the state of one who lacks a certain amount of material possessions or money. Absolute poverty or destitution refers to the deprivation of basic human needs, which commonly includes food, water, sanitation, clothing, shelter, health care and education. Relative poverty is defined contextually as economic inequality in the location or society in which people live.
To resolve poverty Filipino people must be given a job with a right salary. Education must be a right not a privilege. Government must consider education as a key to people’s success. There must be a branch of government whose function is to solely look over and follow up those people who suffers from poverty. And teach them how to fish. 6. Technology
Philippine country has lack of technology that could help furnish goods found in natural resources. Like for example, where having abundant of ampalaya and malungay here which we all know that it is already spread in the market as a medicinal herb, but were not the one who produce that finish product. We only have the raw materials cause we don’t have the technology to manufacture it into medicine what we did is we sell the resources to other country and they were benefited instead us.
To resolve this problem the government must take immediate action towards this. The government must secure a technology to help our poor farmer. And help them educate on how to make use and earn a profit to this natural resources. By this means the earning that we could get from this resources will be added to the wealth of nation. 7. Innovation
It’s an improvement, a modernization. Infrastructure in the Philippines must be develop. Foreign investors look up to this as their basis in putting a business in our country. To resolve this, the Philippine administration must provide enough fund to build roads and other infrastructure.
Terrorism is the systematic use of terror, often violent, especially as a means of coercion. In the international community, however, terrorism has no legally binding, criminal law definition. Common definitions of terrorism refer only to those violent acts which are intended to create fear (terror); are perpetrated for a religious, political or, ideological goal; and deliberately target or disregard the safety of non-combatants (civilians). Some definitions now include acts of unlawful violence and war. The use of similar tactics by criminal organizations for protection rackets or to enforce a code of silence is usually not labeled terrorism, though these same actions may be labeled terrorism when done by a politically motivated group. The writer Heinrich Böll and scholars Raj Desai and Harry Eckstein have suggested that attempts to protect against terrorism may lead to a kind of social oppression.
To resolve terrorism in the country there must be a law enforcers through every portal of the country. 9. Lack of Education
Lack of Education is the greatest problem affecting our country now a day. It is a very huge issue that covers a lot. It can lead to a low standard of a person. Lack of educational facilities affects a lot in this issue, ofcourse, if we doesn’t have enough facilities to study. how can we gain knowledge very well? We must make a solution in this problem by simply increasing the number of technical vocational schools in our country and by adding facilities, tools, materials, etc. to make education easier and accessible to the youth of the nation. Cause according to our national hero, youth is the key of the nation. 10. Unemployment
Unemployment is one of the effects of lack of education. The official unemployment figures for the Philippines in 2011 are among the worst in Asia, higher than its South-East Asian neighbors and according to the International Labor Organization the country is among the worst one-fourth in the world in terms of unemployment rates. Without a strong manufacturing industry or real Filipino industry, the economy will be unable to create enough decent paying jobs. Till then manufacturing or services will remain substandard, or of low value-addition. According to employment figures, jobs in the Philippines manufacturing sector increased by just 8% of the total employment. Nearly three out of every ten people in the labor force are looking for work or are jobless. The mining sub-sector said to be one of the fastest growing industry in 2011 failed to generate new jobs (just 0.6 % of total employment).
Steadily rising inflation has contributed to the erosion of the value of the minimum wage. Though the Aquino administration increased the minimum wage and announced cash dole-outs but lack of quality decent paying jobs and higher real wages continue to be a problem. The government’s policy to encourage foreign capital, even if in just low value-added assembly operations will continue to hinder real growth and development of the manufacturing sector. The Aquino administration needs to plan over the long-term, and prepare an industrialization program that encourages value-addition manufacturing or services and builds Filipino-owned industries.
To resolve such problem provide enough company to work with.