Drivers of Growth in the Philippines

105 Pages Posted: 26 Oct 2018

See all articles by Markus Brueckner

Markus Brueckner

The Australian National University

Birgit Hansl

World Bank

Date Written: October 24, 2018

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.

Suggested Citation

Brueckner, Markus and Hansl, Birgit, Drivers of Growth in the Philippines (October 24, 2018). CAMA Working Paper No. 54/2018. Available at SSRN: https://ssrn.com/abstract=3272557 or http://dx.doi.org/10.2139/ssrn.3272557

Markus Brueckner (Contact Author)

The Australian National University ( email )

Canberra, Australian Capital Territory 2601
Australia

Birgit Hansl

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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