MACROECONOMIC THEORY

CRITIQUE PAPER

1. Corazon Aquino Administration

Macroeconomic Policy Implemented:

The economic correctives that she proposed emphasized a central role for private enterprise
and the moral imperative of reaching out to the poor and meeting their needs. Reducing
unemployment, encouraging small-scale enterprise, and developing the neglected rural areas
were the themes.Foreign policy also reflected this power relationship, focusing on attracting
more foreign loans, aid, trade, investment, and tourists. It was also during Aquino's time that
vital economic laws such as the Built-Operate-Transfer Law, Foreign Investments Act and the
Consumer Protection and Welfare Act were enacted.

Good Effects:

Economic growth was low (1.9 percent), but it was positive. For the next two years, growth
was more respectable--5.9 and 6.7 percent, respectively. In 1986 and 1987, consumption led the
growth process, but then investment began to increase. In 1985 industrial capacity utilization had
been as low as 40 percent, but by mid-1988 industries were working at near full capacity.
Investment in durable goods grew almost 30 percent in both 1988 and 1989, reflecting the
buoyant atmosphere. The international community was supportive. Like domestic investment,
foreign investment did not respond immediately after Aquino took office, but in 1987 it began to
pick up. The economy also was helped by foreign aid. The 1989 and 1991 meetings of the aid
plan called the Multilateral Aid Initiative, also known as the Philippine Assistance Plan, a
multinational initiative to provide assistance to the Philippines, pledged a total of US$6.7 billion.

Bad Effects:

The poor had not benefited from the economic recovery that had taken place since 1986.
The gap between the rich and poor had widened, and the proportion of malnourished
preschool children had grown.

The trade deficit rose rapidly, as both consumers and investors attempted to regain what had
been lost in the depressed atmosphere of the 1983-85 period. Although debt-service payments on
external debt were declining as a proportion of the country's exports, they remained above 25
percent. And the government budget deficit ballooned, hitting 5.2 percent of GNP in 1990.

The Aquino administration appeared to be unable to work with the Congress to enact an
economic package to overcome the country's economic difficulties.
Critics:

In Corazon Aquinos administration, she wasnt really able to solve the countrys problems
in our economy by implementing all that she promised because she was constantly distracted by
coups that threatened the country and her administration. Her administration failed in making the
Philippines economically stable even if she sought to bring back fiscal discipline in order as it
aimed to trim down the government's budget deficit that ballooned during Marcos' term through
privatization of bad government assets and deregulation of many vital industries. The economy
posted a positive growth of 3.4% during her first year in office. But in the aftermath of the 1989
coup attempt, the Philippine economy remained stagnant. In her final year in office, inflation was
raging at 17%, and unemployment was slightly over 10%, higher than the Marcos years. All in
all she doesnt really focus on our economy because there are many holes and shortcomings in
her administration regarding our economy.

2. Fidel V. Ramos

Macroeconomic Policy Implemented:

Ramos implemented a comprehensive Social Reform Agenda(SRA) that addressed the long-
standing problem of poverty: jobs and livelihood, health, education and skills training, housing,
environmental protection, children and the youth, the elderly and the handicapped, agrarian
reform, and access to equal opportunity.Filipino families average income grew more during his
administration compared to 20 years before. He pushed for the deregulation of key industries and
the liberalization of the economy.He encouraged the privatization of public entities, to include
the modernization of public infrastructure through an expanded Build-Operate-Transfer (BOT)
law.

Good Effects:
Under Ramos, the Philippines experienced a period of political stability and rapid economic
growth and expansion, as a result of his policies and programs designed to foster national
reconciliation and unity.

Ramos was able to secure major peace agreements with Muslim separatists, communist
insurgents and military rebels, which renewed investor confidence in the Philippine economy.
Ramos also aggressively pushed for the deregulation of the nation's major industries and the
privatization of bad government assets.

Fidel Ramos embarked on an ambitious development plan dubbed "Philippines 2000."

Under the plan, several industries critical to economic development were privatized, such as
electricity, telecommunications, banking, domestic shipping, and oil.

Bad Effects:
 Prior to Ramos policies and laws, the Philippines was experiencing frequent brownouts
lasting up to twelve hours due to old and ancient power plants. The Philippines fell into large
debt because with the implementation of the formation of the Department of Energy, Ramos was
granted special authority to give licenses to independent power producers to construct
powerplants. This would guarantee that the government would buy the power that the
independent power producers produced in US Dollars. When the East Asian Financial Crisis
entered, this became a problem to the Philippines because the value of the peso declined. Thus,
another hole of the government was that the investments from foreign investors were sought as
ineffective.

Critics:

Under Fidel V. Ramos the Philippines 2000 platform was widely successful, making it one
of the greatest legacies of the Ramos administration to the Philippines. Ramos was successfully
able to open the then-closed Philippine economy and break Marcos-era formed monopolies,
especially with regard to Philippine Airlines and the Philippine Long Distance Telephone
Company, which were privatized and de-monopolized during his tenure. The Philippines
2000 program formed the core of the Ramos campaign platform in the 1992 elections which
largely centered on economic reforms and improved national security and unity. However
because he relied on the elite to get his game plan going, President Ramos commitment to ending
poverty was little more than an image-building project that lacked real substance. This was the
other serious flaw of the Ramos economic project: its failure to integrate poverty alleviation in
the strategy for economic growth. At best it treated its social reform program as an afterthought
to growth. As such it could not resolutely alter existing inequalities in income and the
distribution of the benefits of growth. Because it failed to address poverty and social inequality,
the Ramos economic project was not sustainable. It collapsed before the general-turned-president
could bid farewell to Malacanang.
3. Joseph Ejercito-Estrada

Macroeconomic Policy Implemented:

The Estrada administration upheld the foreign policy thrusts of the Ramos administration,
focusing on national security, economic diplomacy, assistance to nationals, and image-building.
The Philippines continued to be at the forefront of the regional and multilateral arena. It
successfully hosted the ASEAN Ministerial Meeting in July 1998 and undertook confidence-
building measures with China over South China Sea issue through a meeting in March 1999.
President Estrada strengthened bilateral ties with neighboring countries with visits to Vietnam,
Thailand, Malaysia, Singapore, Hong Kong, Japan, and South Korea.
On 1999 a Visiting Forces Agreement with the United States, which was ratified in the
Senate. The country also sent a delegation of 108 observers to the Indonesian parliamentary
elections, and engaged in cooperative activities in the areas of security, defense, combating
transnational crimes, economy, culture, and the protection of OFWs and Filipinos abroad.

Good Effects:

In 1998, the Philippine economy deteriorated again as a result of spill over from the Asian
financial crisis, although not as much as other Asian nations, and a wave of natural disasters also
dragged the economy down. Growth fell to about -0.6% in 1998 from 5.2% in 1997, but
recovered to 3.4% by 1999. The inflation rate came down from 11 percent in January 1999 to
just a little over 3 percent by November of the same year. This was in part due to the successful
agricultural program Agrikulturang Maka Masa, through which it achieved an output growth of 6
percent, a record high at the time. The peso was 44 to the dollar in 1998 and recovered by 38 to a
dollar the following year. The interest rates were 28% in 1998 and came down to 14% by 1999.
President Joseph Estrada attempted to resist protectionist measures, and efforts to continue the
reforms begun by the Ramos administration made significant progress. He also established a
socio-economic program called "Angat-Pinoy 2004" pointed out five things for the economy.

Bad Effects:

A major bank failure in April 2000 and the impeachment and subsequent departure of
President Estrada in the beginning of 2001 led to another slower growth. Under the Asian
financial crisis, Estrada did not do well in making the economy survive.

Inflicted severe damage on the countrys image abroad, and scared much-needed
investments away.
Critics:

Estrada did not do well in making the economy survive. Unemployment rate went up,
budget deficit grew and the currency fell. Eventually, the economy recovered but at a much
slower pace than other asian countries. Estrada waged an all-out war against the MILF which
affected a huge number of people. Crime rate also went up because of the occurring kidnapping
and killings. Estrada was charged of receiving a big amount from illegal gambling payoffs. He
was impeached. The masses protested and demanded for Eraps resignation bringin about EDSA
2 revolution. We think that he really had a mistakes being a public servant even if he didnt have
the educational competence.

4. Gloria Macapagal-Arroyo

Macroeconomic Policy Implemented:

Arroyo implemented a controversial policy of holiday economics, adjusting holidays to form

longer weekends with the purpose of boosting domestic tourism and allowing Filipinos more
time with their families. Economic growth in terms of gross domestic product has averaged 4.6%
during the Arroyo presidency from 2001 up to the end of 2005. This is higher than previous
recent presidents when compared to the 3.8% average of Aquino, the 3.7% average of Ramos,
and the 2.8% average of Joseph Estrada. Inflation during the Arroyo presidency has been the
lowest since 1986, averaging 2.5%.

A controversial expanded value added tax (e-VAT) law, considered the centerpiece of the
Arroyo administration's economic reform agenda was implemented in November 2005, aiming
to complement revenue-raising efforts that could plug the country's large budget deficit. The tax
measure boosted confidence in the government's fiscal capacity and helped to strengthen the
Philippine peso, making it East Asia's best performing currency in 2005-06. The peso
strengthened by nearly 20% in 2007, making it by far Asia's best performing currency for the
year, a fact attributed to a combination of increased remittances from overseas Filipino workers
and a strong domestic economy.

Good Effects:

Arroyo's foreign policy is anchored on building strong ties with the United States, East
Asian and Southeast Asian nations, and countries where overseas Filipino workers work and
live. In 2007, the Philippines was host to the 12th ASEAN Summit in Cebu City.
On August 21, 2007, Gloria's administration asked the Senate of the Philippines to ratify a $4bn
(2bn) trade deal with Japan (signed on 2006 with the former Japanese Prime Minister Junichiro
Koizumi), which would create more than 300,000 jobs (by specifically increasing local exports
such as shrimp to Japan). Japan also promised to hire at least 1,000 Philippine nurses. The
opposition-dominated senate objected on the ground that toxic wastes would be sent to the
Philippines; the government denied this due to the diplomatic notes which stated that it would
not be accepting Japanese waste in exchange for economic concessions Domestic Policies.

Bad Effects:

Arroyos administration in which the EVAT or Extended Value Added Tax was
implemented and that cause the consumer to spend additional expense in some commodities and
aside from these it also increased the sin taxes or the taxes in alcoholic beverages as well as in
cigarettes. Gloria Macapagal Arroyo has lack of will to prevent graft and corruption.

Critics:

She has been arguably the most unpopular president of the Philippines. This is because of
her numerous unanswered issues and controversies like the Hello Garci scandal, expensive
dinners during her visit to the United States, and many more. Gloria Macapagal Arroyo has also
been called for being the most corrupt president in the Philippines.
During Glorias administration issues such as the Northrail Project Anomaly and Fertilizer
Fund Scam popped-out. The said Northrail Project is to construct a rail line from Caloocan to
Clark Special Economic Zone. The budget of the said project has been led to corruption in the
Arroyo cabinet and even her, series of cancellations has also done.

5. Benigno Noynoy Aquino

Macroeconomic Policy Implemented:

The Aquino administration has had a strong economic record. The Philippines is an
emerging economy, which has steadily grown under Mr. Aquino due to the inflow of foreign
direct investment (FDI).

FDI has been rising steadily in recent years, and between January and November 2014, FDI
flows reached USD 5.7 billion, which represents a more than 60% increase compared to 2013.
Most of these investments went into manufacturing gas, steam, and air-conditioning supply,
finance and insurance, transportation and storage, and professional, scientific and technical
activities.
Good Effects:

The economy is reported to have grown by 6.1% in 2014. Whilst this was slower than the
7.2 % growth in 2013, and was short of the governments 6.5 to 7.5% target, it was still the
second fastest in Asia during the period.

Filipino economist Arsenio Balisacan believes expansion plans of local corporations and
conglomerates are evidence that the business sector is confident in the Filipino economy. He is,
therefore, positive that investor confidence will extend beyond the 2016 elections. Similarly,
Reginaldo Cariaso, managing director of the investment house unit of the Bank of the Philippine
Islands, has stated that investor confidence in the Filipino economy would continue to drive
reforms and positive market change.

The key macroeconomic relationships worked well together. Fiscal, monetary, and trade
payments cooperated to produce a stable economic environment.

Bad Effects:

Broadly, foreign direct investment includes "mergers and acquisitions, building new
facilities, reinvesting profits earned from overseas operations and intra company loans". In a
narrow sense, foreign direct investment refers just to building new facility, a lasting management
interest (10 percent or more of voting stock) in an enterprise operating in an economy other than
that of the investor.
With the FDI, country could able to socialize to foreign countries which leads the country to
be dependent. Country may not run effectively because a controlling ownership in a business
enterprise in one country by an entity based in another country.

Critics:

Our Economy maybe in its stable condition but the Filipino citizens doesnt actually feel it
because we believe that the rich became richer and the poor remain poor. It is because of the
many difficulties that a nation is facing so we needed a leader that will help us to direct our way
to success. He actually lacks on doing so because there are many people here who doesnt even
knew that our economy is emerging. With regards to his administration, we think that he has
great plans but it doesnt really come out successfully. He had many issues and because of this
he was criticized of his handling to our nation.
Noynoy Aquino is said to be the worst president during upon his administration.