OPINION | Geopolitics and the Philippine economy [By Calixto V. Chikiamco] READ:
he Philippines may be islands in the Pacific, but it’s not isolated from geopolitics. Geopolitical events have affected the Philippine economy and have helped shaped our history.
However, because the protected, inward-looking structure was essentially unchanged, those loans went into unproductive and inefficient uses, corruption or no corruption. Therefore, when the second oil shock occurred in 1979 with the fall of the Shah of Iran, the economy slid into crisis, which culminated with the assassination of Ninoy Aquino in 1983 and the People Power revolution thereafter.
First, deglobalization is accelerating and the Philippines could be a winner. Before the Ukraine war, the United States had been trying to decouple itself from China as the former sees the latter as a strategic rival. Therefore, the passage of the Public Service Act Amendment is timely. Opening the telecommunications, shipping, airlines, airports, tollways, railways, subways, and TNVs to 100% foreign investment will lead to a boom in foreign investments by companies encouraged by their respective governments. Foreign governments will probably shower the Philippines with concessional loans, grants, or official development assistance to provide the infrastructure for increased trade and supply chain resiliency.
The Philippines is the fifth most mineralized country in the world. It has plenty of nickel, copper, gold, silver, and even cobalt. Global companies will therefore come knocking on our door. If we let them in, governance and sustainability standards in mining will improve. The government just needs to give the mining industry stability of policy.
First, it can improve its institutions and adherence to the rule of law. There’s no reason why we can’t improve our institutions. We did it with the Central Bank.
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