The Philippine Economy: No Longer the East Asian Exception? Revisited*

Abstract

The Philippine economy has long been the East Asian outlier. In the early postwar period, with a per capita income higher than many of its neighbors, it was forecast to be one of Asia’s most dynamic economies. However, beginning in the mid-1970s, its growth trajectory increasingly diverged from its high-growth neighbors. By 2000, its per capita income remained roughly the same as it had been in 1980. Nevertheless, in the 21st century, the Philippines rejoined the East Asian mainstream, growing at a rate comparable to that of other Southeast Asian counterparts and faster than its traditional comparator, Thailand. This paper explores these development dynamics and identifies key development issues that need to be addressed if the current growth trajectory is to be maintained and accelerated.