By the year 2000, the Philippines will be a Newly Industrialized Country.
The Ramos Administration (1992-1998). Fidel V. Ramos won in the 1992 presidential election against six other candidates. In the last five years of his administration, he has changed the Philippines from being “the Sick Man of Asia” into “The Next Tiger of Asia.”
Due to his economic programs and accomplishments, Newsweek Magazine, cited the Philippines as the “The Next Tiger of Asia.” The Ramos term ends this year, 1998. (See Ramos’ economic program as envisioned in Philippines 2000.)
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 privitized and de-monopolized during his tenure.
He was also able to resolve the power crisis in the Philippines through privitization of power plants and the construction of new ones. The reforms spurred additional investment into the Philippines.
Other economic reforms achieved during the Ramos administration was the re-adjustment of the value added tax from four percent to an International Monetary Fund and World Bank-mandated ten percent. The success of the reforms paved the way for the Philippines to be called "Asia's New Tiger".
Economic reforms instituted during the Ramos era enabled the Philippines to experience growth rates of up to nine percent annually, and enjoy annual budget surpluses well into his tenure. The economic reforms instituted in the Philippines 2000 platform would have an effect on how the Philippines would be affected in the 1997 East Asian financial crisis.
Perhaps one of the greatest legacies of Philippines 2000 regarding peace and stability was the 1996 peace treaty signed between the Philippine government and the Moro National Liberation Front, ending over thirty years of conflict on the island of Mindanao.
A tiger economy is the economy of a country which undergoes rapid economic growth, usually accompanied by an increase in standard of living. The term was initially used for South Korea, Singapore, Hong Kong and Taiwan (East Asian Tigers), and in the 1990s it was applied to the Republic of Ireland (the Celtic Tiger).
In 2007, Brazil, Russia, India, Panama and China are considered to have tiger economies. The Southeast Asian countries of Malaysia, Indonesia, the Philippines, Thailand and Vietnam may also be considered tiger economies due to their high growth rates in recent years.
The Greek economic miracle of the 1950s and 1960s has also been described afterward as a tiger economy. It is not often cited internally, however, as the era was also a time of great political turmoil in spite of the economic success.
More recently, the term has been used to refer to the Baltic states Estonia, Latvia and Lithuania, known collectively as the Baltic Tigers. Slovakia is referred to as the Tatra Tiger. Romania is referred to as the Carpat Tiger. Within Canada the province of Alberta has also been considered to have a tiger economy.
Power Crisis
The Philippines then was experiencing widespread brownouts due to huge demand for electricity and antiquity of power plants. During his State of the Nation address on July 27, 1992, he requested Congress to enact a law that would create an energy department that would plan and manage the Philippines' energy demands.
Congress not only created an energy department but gave him special constitutional powers to resolve the power crisis. Using the powers given to him, Ramos issued licenses to independent power producers (IPP) to construct power plants within 24 months. The power crisis was resolved in 1994.
Unfortunately, Ramos issued supply contracts that guaranteed the government would buy whatever power the IPPs produced under the contract in U.S. dollars to entice investments in power plants. This became a problem during the East Asian Financial Crisis when the demand for electricity contracted and the Philippine Peso lost half of its value. This caused the Philippine price of electricity to become the second-highest in Asia, after Japan.
The country was considered risky by investors due to previous coup attempts by military adventurists led by Gregorio Honasan, and experienced brownouts at an almost daily basis lasting 4-12 hours before he issued IPP licences. The low supply of power and perceived instability held back investments and modernization in the country.
In addition, the Philippines was a pioneer in the Build-Operate-Transfer (BOT) scheme where private investors are invited to build certain government projects (i.e. tollways, powerplants, railways, etc.), make money by charging users, and transfer operation to the government after a set amount of time. As there was no literature or previous experience to such a scheme, most early contracts put a large and undue amount of risk on the government in cases of unfavorable changes in the business environment.
During his administration, Ramos began implementing economic reforms intended to open up the once-closed national economy, encourage private enterprise, invite more foreign and domestic investment, and reduce corruption. Ramos was also known as the most-traveled Philippine President in recent history with numerous foreign trips abroad, generating about US$ 20 billion worth of foreign investments to the Philippines.
To ensure a positive financial outlook on the Philippines, Ramos led the 4th Asia Pacific Economic Cooperation Leaders' Summit in the Philippines on November 1996. He also instituted reforms in the tax system which includes a forced increase on VAT (E-VAT law) from 4% to 10% mandated by World Bank and the International Monetary Fund.
Under his administration, the Philippines enjoyed economic growth and stability. The Philippine Stock Exchange in the mid-1990s was among the best in the world[citation needed] and his visions of 'Philippines 2000' that leads the country into a newly industrialized country in the world and the "Tiger Cub Economy in Asia".
