The Ramos administration set out a program of economic
liberalization and privatization which resulted in a dramatic
change to the Philippines economy since 1993. The economy
is diverse with the service sector contributing 53%, industry
31% and agriculture 16% of GDP in 2000. Although agriculture's
contribution to GDP has declined in recent years, it continues
to account for approximately 45% of the workforce.
The Philippines escaped the worst of the Asian financial
crisis as it had already been through the IMF process
and had the appropriate structures in place. GDP grew
by 3.2% in 1999 on the back of strong exports and sustained
agricultural growth, reversing a decline of 0.5% in 1998.
However, the economy has suffered badly as a result of
the political crisis and the process to impeach President
|investment dropped forcing the peso to a record low
in January 2001 of 55 pesos to the US dollar. In an attempt
to defend the peso, the Philippine Central Bank encouraged
commercial banks to raise interest rates.
Following her appointment in early 2001, President Gloria
Macapagal-Arroyo, a trained economist, restored macroeconomic
stability. The peso recovered, interest and inflation
rates are at their historic lows. Nonetheless, the combined
effect of domestic peace and order and the slowdown in
the world economy took its toll on the country as much
needed foreign investments declined. In 2002, GDP grew
by 4.6%, exceeding official forecasts and the strongest
recorded since the 1997 crisis.