Good policies help Philippines weather crisis
While the worse may be yet to come, the Philippines so far has managed to avoid the market meltdown that hit Vietnam and has kept rice prices below that its neighbors through heavy subsidies.
One of the most important measures taken by the Macapagal government was to reduce budget deficits with the expanded value added tax (EVAT) on gasoline and other oil products, and by cracking down on tax evaders. While painful, the EVAT was a very logical way to increase revenues in a nation that was getting too dependent on foreign oil. The resulting reduction in red ink has increased overall confidence in the economy.
The government has used money from EVAT on increased vigilance on tax evaders to pay subsidies to poor people suffering from the soaring global inflation.
Macapagal had instituted a number of programs aimed at increasing remittances and investments from abroad. One of these was the "ambassador" program in which expatriate Filipinos and foreign nationals were invited to travel to the Philippines as guests of the government. In the country, they were treated to guided tours by government officials who extolled the country's many available opportunities culminating in a private audience with the president herself.
Money continues to pour into the country aimed primarily at real estate and franchise business investments. Remittances from Filipinos working abroad and outsourcing investments have also filled the country's coffers registering record foreign reserve accounts in recent months.
The administration's investments in intellectual capital has also probably helped in handling the current crisis. Increased research and development generally leads to greater resourcefulness and a better understanding in how to solve local problems.
One area where the government has had difficulty is in increasing agricultural productivity. The administration responded recently by increasing agricultural expenditures resulting in an increase of rice production by 200,000 metric tons over the government's previous targets.