Drivers of growth in the Philippines

Vol: 
54/2018
Author name: 
Brueckner M
Hansl B
Year: 
2018
Month: 
October
Abstract: 

During the 2000s PPP GDP per capita growth in the Philippines was modest. Transitional convergence accounted for almost half of the growth in the Philippines during that time period. Reforms to the structure of the economy boosted growth by less than one percentage point per annum. The most significant structural reform was improvements in telecommunication infrastructure that lifted growth by over half a percentage point per annum. The decline of domestic credit to the private sector reduced growth by about one quarter of a percentage point per annum. Successful stabilization policies positively contributed to growth but the effect is small, about one half of a percentage point per annum. The paper discusses the growth performance of the Philippines relative to comparator countries: ASEAN, lower middle income countries, countries where migrant remittances are large relative to GDP, young democracies, structural peers, and regional peers. The main message from the analysis is that structural reforms were not as significant in the Philippines as in comparator countries. The Philippines lagged behind in structural reforms and this significantly contributed to the country’s relatively modest growth performance.

Publication file: 

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