The Philippines Are Booming, But Can They Stay On Steady Ground?

It’s boom time in the Philippines. The GDP is increasing, having risen to 7.8% in the first quarter, and foreign investments are coming in. The rising middle class is able to enjoy luxuries it couldn’t have a decade earlier. As a result of the real estate boom, people are starting to buy more houses. More people are going on holidays abroad to countries like the U.S.

A major chunk of this new income is coming from the BPOs, or the call-centres, which create employment among the youth. The Philippines in 2010 surpassed India as the largest country for Business Process Outsourcing industry in the world. While this is favorable, it comes with its own list of challenges. An EILER article states that Filipino team leaders and managers are paid 36-57% less than their counterparts in other countries such as China and India. A 2010 International Labour Organization (ILO) report expressed concern about employees in this sector facing health challenges due to occupational safety and health concerns.

Increased income in the Philippines also seems to come more from longer hours at work rather than a generation of new employment. The number of people working more than 40 hours a week has jumped to 24 million in April, a 15% increase over the previous year. People working in garment industries (which often ship clothes to U.S. department stores such as Macy’s) reportedly often work very long hours, even one and a half days, at a stretch.

Another problem is that land is becoming scarce in the Philippines, due to the building of shopping malls and buildings to cater to the growing rich. According to Director Edgardo J. Ollet of the National Disaster Risk Reduction and Management Council (NDRRMC), “The collapse of the building in Binondo [a district in Manila] occurred because of the weakening of its foundation, which was in turn caused by the construction of another building nearby.”

If this is true, it is a troubling indication of development happening too soon, and sustainability coming later. Everyone wants to cash in when the economy is booming, which is good. However, if it happens too fast, then just like buildings which crumble without proper foundation, economies will run the risk of floundering too.

Unemployment is at a four-year high in the Philippines and nearly 35% of Manila’s population live in slums. Just Thursday, a major fire broke out in a slum in Manila, destroying over 300 houses and displacing nearly 1,000 people. This came after a similar incident that occurred in a Manila mall just two months ago, a fire that reportedly took nearly two days to put out.

The recent Bangladesh factory collapse reminds us that lax safety regulations and uncontrolled expansion are destructive. The Philippines must take care to avoid the common "fast, cheap, unsafe" model developing nations often resort to.

Clearly, the Philippines must build a sustainable model for economic progress.  Its growth is undoubtedly impressive but it needs to fix urgent problems like those illustrated above to avoid running the risk of undermining its progress.