FVR’s vision for the economy

Among the tributes that poured in for former President Fidel V. Ramos, one of the well-remembered is his contribution to the Philippine economy, especially his endeavor to shift the country from being called the Sick Man of Asia. After all, in his inauguration address back in 1992, he said, “To this work of empowering the people, not only in their political rights but also in economic opportunities, I dedicate my Presidency.”

Among those who honored Mr. Ramos on his passing were Budget and Management Secretary Amenah Pangandaman and Socioeconomic Planning Secretary Arsenio M. Balisacan, who, in separate statements, both recognized how the country became a “tiger cub economy” through the late President.

“It was during his administration that the Philippines, under his vision ‘Philippines 2000’, became the ‘tiger cub economy in Asia’, as he was widely credited for spearheading economic reforms in the country,” Sec. Pangandaman said in a statement.

“He was also a visionary,” said Sec. Balisacan. “His foresight and steadfastness enabled the Philippines to weather the 1997 Asian Financial Crisis and be among the continent’s ‘Tiger Cub Economies’.”

Mr. Ramos, also known for his initials FVR, served as the country’s 12^th President from 1992-1998. During his inauguration, he noted that one of their priorities was to “nurse the economy back to health and propel it to growth.”

A World Bank working paper from 2008 noted that the country’s economic growth record showed a ‘boom-bust’ picture. The economy could not maintain growth of more than 5% for over six years and although growth managed to stay over 5% for six years from 1975 to 1980, amid the Marcos dictatorship, this economic expansion was paid for by large foreign borrowings that “paved the way for a deep external payments crisis in the early 1980s.” 

The country’s economic situation deteriorated in the 1980s, according to an International Monetary Fund (IMF) paper from 2000. From 1986 to 1989, economic growth was able to rebound under a new government that was led by former President Corazon C. Aquino, though the economy faltered in 1990 to 1991 due to a string of natural disasters, external shocks, and renewed political instability. The economy was still on a “rocky path” in the last years of the 1980s, according to the IMF. Nonetheless, those years saw “important changes that paved the way for fundamental improvement” in the decade that followed.

“The 1990s have witnessed impressive economic progress in the Philippines, reflecting sound economic policies in a more favorable external environment and greater political stability,” IMF said.

Led by FVR, the new government embraced what IMF regarded as a “comprehensive reform strategy,” which targeted “further opening up the economy, reducing macroeconomic imbalances, and addressing other structural rigidities.”

In his 1993 State of the Nation Address, FVR expounded on his socio-economic program Philippines 2000, a vision for the country to be newly industrialized by the year 2000.

“The Philippine State, in the past, had been unable to act consistently in the national interest because it could not resist the importunings of oligarchic groups. And the economy had been governed largely by politics instead of markets,” Mr. Ramos said.

“Because of this experience, we now know that development cannot take place in our country unless we put our house in order. And this — to me — means accomplishing three things: One, restoring political and civic stability. Two, opening the economy: dismantling monopolies and cartels injurious to the public interest, and leveling the playing field of enterprise. Three, addressing the problem of corruption and criminality.”

He laid out the two components of the Philippines 2000, the first of which is the Medium-Term Philippine Development Plan for 1993-1998. The other component sought to address the larger environment, covering the political, social, and cultural climate, in which economic growth must transpire.

The paper published by the World Bank likewise noted that FVR’s reform agenda was broad. Because apart from economic liberalization measures, also involved are institutional, redistributive, and political reforms.

“At the end of the day, he had been most successful where the reform effort entailed liberalization and deregulation, that is, getting government out of the way to foster market efficiency,” the World Bank paper said. “The success record of his programs for institutional reform is less evident, partly because these are by nature more intractable and complex and require sustained action over a long period, perhaps longer than a President’s term.” — Chelsey Keith P. Ignacio