Is the Philippines Heading Towards a Social Market Economy? Lessons from Germany

Abstract

The Philippine economy continues to perform well as it expanded by 6.7 percent in 2017 amid the slow recovery of the global economy, subdued world trade, and increased uncertainty due to the intensifying call for protectionist and inward-looking policies. The said figure is the third highest gross domestic product (GDP) growth registered in Asia in 2017, trailing only China (6.9 percent) and Vietnam (6.8 percent).1 The International Monetary Fund (IMF) estimates that India’s economy expanded by 6.7 percent in 2017.2 For 2018, the Asian Development Bank (ADB) projects the Philippines’ GDP growth to trend upward by 6.8 percent buoyed by strong domestic demand, expansionary public spending, and a more active export industry.3 Given the promising outlook of the nation’s economy, a rising number of foreign firms and investors are keenly observing the economic developments happening domestically. Perhaps an important question that all interested players and stakeholders have been meaning to ask is this: How will the Philippine government steer the country’s economy in the near to medium-term and what direction will it take?