Maria.F, Online English teacher at Acadsoc.
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Many of the world’s most beautiful countries are so due to their natural landscape – forests, rivers, coasts and ranges. It is without a doubt that these natural landscapes may play a huge factor in the tourism industry of each country, but certain countries need to rely on more than just that aspect of their environment – they need to develop.
Many third-world countries have a vast tourism sector, and this is because the countries are relatively cheap to visit, and are beautiful all year round. Countries in Southeast Asia are famous for their beautiful coasts, beautiful heritage sites and diverse cuisine. To illustrate this point, we can look at a country like the Philippines, which is a tourist attraction, but underdeveloped.
Comprising more than seven thousand islands, its capital, Manila, is well-known for the waterfronts and greenery. Other places such as Chinatown in Binondo are always active, buzzing with life and culture. Outside of that though is the big question of what exists outside the tourism. To answer that question, we need to look at the current situation that faces the Philippines and what the president, Rodrigo Duterte aims to do to bring a change that seeks to benefit all industries, in an attempt to further grow the economy.
In a latest Traffic Index Rate given by Numbeo, an authorised worldwide database for investigating traffic trend, Manila, the capital city of Philippines ranks 7th in the list, for its inefficiency and relatively high cost & long time spent in traffic. Manila residents spend almost three hours a day in traffic and cost annually about 800 billion PHP (equally 16 billion USD), said by Grace Poe, head of a Senate panel. In the World Economic Forum’s Global Competitiveness Index for 2017-2018 held in Manila, it indicated the Philippines needs to chase up with her ASEAN partners. Regarding the quality of railroads, Philippines only ranked higher than Cambodia, last but one on the list among ASEAN countries. And in quality of air transport infrastructure in 2017, the Philippines ranked 124th out of 137 countries in WEF, down 8 spots from its 2016 rank. Apparently, poor infrastructure has pulled back Philippine’s development, especially in the recent three years (2017, 2018 and 2019), which are considered as the golden period for the Philippines to get out of the mud from 2008 economic crisis.
With Rodrigo Duterte’s ambition to develop infrastructure in order to accelerate growth, the Philippines has seen an upward trend in economic participation, with the country remaining resilient despite the challenges faced by global markets in the year of 2016. In the very same year, the Philippines achieved a level of 4.7 percent unemployment rate – a record low for the country. In three years, over 1.8 million Filipinos were lifted out of poverty due to higher employment and lower inflation rates. The outlook remains positive, and the country continues to head down a productive path.
The World Bank projected that real GDP will grow at a rate of 6.9 percent in 2017 and 2018. Supported by sound domestic macroeconomic fundamentals and an accelerating recovery among other emerging markets and developing economies, the Philippines is expected to remain one of East Asia’s top growth performers. The government’s commitment to further increase public infrastructure investment is expected to sustain the country’s growth momentum through 2018 and reinforce business and consumer confidence. Strong and inclusive economic growth is projected to further increase household consumption and speed the pace of poverty reduction.
The current situation in the country shows the correlation that infrastructure development and economic growth. The more opportunities that exist for the population to be active participants in the economy, the more room the government must manoeuvre around with its fiscus. Lower unemployment rates mean fewer people are relying on the government for grants and therefore opens the possibility to develop even further – building roads, housing and malls to enable the participation and job creation needed to take the country forward.
There are so many stakeholders and benefactors of infrastructural development in a growing economy. In the short-term, the growth achieved is rapid and exponential compared to previous years – and although it is a challenge to ascertain the long-run effects, it is without a doubt that the economic status will be better than the previous times. For a country such as the Philippines, there are four benefits of infrastructural development that we can ascertain:
- Lower Costs
Apart from the initial cost of developing infrastructure, the competitiveness of businesses such as real estate ensures that the consumers pay the lowest price possible – and gives the consumer a choice. Previously, in underdeveloped countries, the lack of infrastructure means that markets are monopolised, and therefore businesses can charge whatever price they see fit. With infrastructural development, there exists an opportunity for more competitors to enter the market and benefit the economy and consumers in the same breath.
- Diversity and Scalability
As stated above, third-world countries rely heavily on one sector of their economy, and in the case of the Philippines, it is tourism. The focus on infrastructural development has opened the door to the building of warehouses for manufacturing, structures for real estate investment, roads for logistical integration, and more in-depth a portfolio in the tourism sector. On top of that, these industries can now scale and project their growth in the coming years. Also, the PDP seeks to promote inclusive and sustainable industrialisation and, by 2030, significantly raise industry’s share of employment and gross domestic product, in line with national circumstances, and double its share in the least developed countries.
- Focus on Business Growth
The generation of infrastructure on business growth is positive as many companies can now seek new markets as they can reach them through roads. Also, the consumers can now have access to businesses and play their part in the business growth – through having jobs and disposable income.
- International Trade
The development of warehouses, quality roads, and the initial technological boom will mean that the Philippines are an attractive global trade partner for countries such as Australia and New Zealand who use other Southeast Asian countries for their clothing manufacturing.
The country’s total external trade in goods was recorded at $75.586 billion, expanding by 15.3 percent from $65.579 billion in 2016. Total imports payments went up by 14.3 percent to $44.302 billion in 2017 from $38.746 billion in 2016, whereas, total export receipts grew by 16.6 percent to $31.284 billion in 2017 from $26.832 billion in 2016. This brought the country’s balance of trade in goods (BoT-G) at $13.017 billion deficit in January to June 2017, higher than the $11.914 billion deficit in the same period of 2016. 
In 2017, the president ordered the adoption of the Philippines Development Plan (PDP) 2017-2022 which focuses on many socio-economic issues and bring the country some stability through economic participation, employment and education just to name a few. The key areas include:
- Expanding Economic Opportunities in Agriculture, Forestry, and Fisheries
- Expanding Economic Opportunities in Industry and Services through Trabaho at Negosyo
- Accelerating Human Capital Development
- Reaching for the Demographic Dividend
- Vigorously Advancing Science, Technology, and Innovation
- Ensuring Sound Macroeconomic Policy
- Levelling the Playing Field through a National Competition Policy
- Accelerating Infrastructure Development (The most significant chapter of the PDP’s scope)
- Guaranteeing Ecological Integrity, Clean and Healthy Environment
The PDP converges, with each paragraph, to Facilitate sustainable and resilient infrastructure development in developing countries through enhanced financial, technological and technical support to African countries, least developed countries, landlocked developing countries and small island developing states.
GOAL 9 of the PDP is to BUILD RESILIENT INFRASTRUCTURE, PROMOTE INCLUSIVE and SUSTAINABLE INDUSTRIALIZATION AND FOSTER INNOVATION. This goal embodies the above points as it comprises infrastructure as a key player in the economy through:
Develop quality, reliable, sustainable and resilient infrastructure, including regional and trans-border infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all.
The country’s adoption of the strategy has most certainly brought a few positives as evidenced by the decrease in unemployment. But some critics wonder how long this will last. The critical question, however, is how can these strategies enhance the overall livelihood of the Philippines and its population. A strict and direct policy implementation, such as the one in China will guarantee a people-centered government that does all that it can to promote the well-being of its people and promote the country as a key economic player in the world economy.