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Each time the United States' economy tumbles, the Philippines and the rest of the world are bumped aside. Being in the clutches of the U.S. economic hegemony since colonial times, however, the Philippines is at the receiving end of the crisis of capitalism that America passes on to small, developing countries and emerging economies.
The Philippines' economic dependence on the U.S. gave birth to treaties and policies allowing the entrenchment of U.S. strategic enterprises and investments, the export of raw commodities, heavy reliance on foreign investments, and the elimination of protectionism. This neo-colonial structure maintained the system of landlordism and a bourgeoisie that depended on the plunder of natural resources and export of cheap raw commodities. As a result, the local economy was unable to shield itself from the rise and fall of an increasingly globalized economy where modern agriculture, a strong industrial base, and protective barriers are the keys to survival.
Imbalanced trade, a weak manufacturing base, and heavy borrowings further resulted in the accumulation of foreign debt that made successive and corrupt administrations accommodating to bitter economic pills prescribed by the IMF and World Bank. Under the “structural adjustment program,” up to 50 percent of the national budget went to automatic debt servicing, regressive taxes were increased, while social services were reduced and strategic public corporations went to private hands, many of them transnational corporations.
The government's commitment to the World Trade Organization led to the deregulation of the oil industry. Import liberalization displaced the country's small producers while tens of thousands of workers lost their regular jobs due to labor-only contract system.
These economic policies took shape in the midst of the periodic crisis of contemporary capitalism battering the U.S. and other capitalist countries. Champions of neo-liberal globalization have shown no empirical evidence to support their claim of “equal playing field” and economic growth. On the contrary, today, nearly three billion people - half the world's population - are living on less than two dollars a day, while the richest two percent of adults in the world own more than half of global household wealth.
Economic management can no longer be left in the hands of bureaucrats and technocrats who ape lock, stock and barrel models purposely to make corporate profits bigger at the expense of the marginal sectors. Clearly, the most recent financial crisis in the U.S. has dealt a mortal blow to the failed but deadly practices of neo-liberalism and undoubtedly lays the groundwork for the crafting of alternative policies more responsive to the needs of the poor. We can start right here in our country by working for the end of the destructive and rapacious rule by the elite and building people-centered democratic governance. - Center for People Empowerment in Governance
