The Philippine Economy and Climate Change

The COVID-19 pandemic has significantly impacted the Philippines' growth prospects and the poverty reduction process. While 2020 growth has contracted, real wages are expected to increase as well. The COVID-19 pandemic, however, has negatively affected poverty reduction and household incomes. In addition, the slowdown in tourism and remittances has also caused a contraction in the Philippines' economy. Although the COVID-19 pandemic is unlikely to have a negative impact on household incomes in the coming years, the economic impact is already evident.Economic growth model of the Philippines
The Philippine economy has been performing strongly in recent years, led by robust public investment. Its GDP growth rate is projected to reach 6.7 percent in 2018 and 6.8 percent in 2019. Nevertheless, the Philippines faces challenges ranging from rising inflation and tighter global financial conditions to persistent poverty and inequality. In order to achieve a higher living standard for the people, the government needs to continue deepening ongoing reforms and making timely macroeconomic policy adjustments. To that end, it must make the investment in the infrastructure sector a priority.The Philippine economy is increasingly dependent on services, and remittances of overseas Filipino workers account for around 10% of the country's total GDP. As a result, the Philippines has gradually moved from an agrarian economy to an industrial one. In 1980, agriculture represented one-fourth of the nation's GDP, but now accounts for only 9.3%, or around 25% of the workforce. Its principal agricultural products are coconuts, rice, corn, bananas, pineapples, and casava.Impacts of COVID-19 pandemic on philippine economy
The government is studying its options in containing the COVID-19 pandemic, based on recent data from Google's mobility database. Among other things, the government has announced different measures to contain the outbreak, including quarantine measures, which may prohibit certain age groups from going outside. Similarly, local government units may adopt similar measures depending on the type of pandemic in the area.In the case of the Philippines, it is critical to prioritize the front-line workers. The government should start the vaccination program to cover seventy percent of the population and enlist the private sector. This will help restore herd immunity and consumer confidence. At the same time, it can scale up social safety nets and put more money in people's pockets. It is a prudent move given the large number of people who may contract the disease.Import substitution
After the balance-of-payments crisis of 1949, the Philippines implemented industrialization policies that encouraged import substitution. These included overvalued currencies, protective tariffs, and quantitative import restrictions. These policies triggered an increase in foreign direct investment in the Philippine economy, especially from the United States. In addition, the Philippine government was able to maintain a favorable exchange rate, which enabled it to request reconstruction assistance from the US, which partially offset the negative balance of trade.However, it is important to keep in mind that import substitution has its limitations, particularly in developing economies. The domestic market for a particular product must be relatively small compared to its import content. A small domestic market will slow the growth and prevent import substitution from working. As a result, imports of intermediate products and raw materials will not significantly diminish, and will eventually become a permanent burden on the balance of payments. In addition, it will create an inefficient industrial structure because of the protection required to make import substitution profitable.Impacts of climate change on philippine economy
In its Fourth Assessment Report, the Intergovernmental Panel on Climate Change (IPCC) projected an increase in sea surface temperatures of 0.14degC around the Philippines by the year 2100. It also predicted that the number of rainy days would increase. In addition, sea level rise could cause landslides and floods. One potential effect of global warming is ocean acidification, which may affect the Philippines' sea life, which is a major source of food. The Philippines' rich biodiversity means that climate change could affect the country's natural resources.Moreover, increased temperatures are associated with an increase in diseases. The Philippines experienced its strongest El Nino ever in 1998. In that year, there were nearly 40,000 dengue, 1,200 cholera, and 1,000 typhoid fever cases. A World Health Organization study on gender, climate change, and health found that climate-sensitive health impacts disproportionately affect women. The Philippines' economy relies on the natural resources it has. Its vast coastlines and extensive river systems support industries like fisheries, tourism, and mining.