Economic and Cultural Transformation as a Result of Globalization in the Philippines
Globalization is associated with not only advancements in communication and ever-expanding trade routes but also transformation in political systems and the enhancement or destruction of cultural heritage (Block, 2004; Lieber & Weisberg, 2002). Indeed, it is apparent that globalization in developing countries has a significant impact on political, economic, and cultural aspects. Globalization arises from several factors which may include colonialism (Korobeynikova, 2016). The expansion in power and territory that is characteristic of colonialism may promote communication and technological advancements, leading to globalization. A prominent example of a nation undergoing significant changes as a result of globalization in the Philippines. Historical records show that the Philippines has been colonized by Western nations as well as its northern neighbors, China and Malaysia. The Philippines has experienced significant cultural and economic changes arising as a result of globalization from the 1980s up till the present (Guinigundo, 2018). While globalization leads to positive changes in political systems and a shift from an agrarian to an industrial economy, negative impacts such as financial imbalance between the rich and the poor and environmental damage are ever-present.
Political Institutions and Industrialization
In a historical context where power has exchanged several hands, the Philippines has, over many years, transformed its political systems. However, it may be asserted that the political governance of the Philippines needs significant improvement in terms of administrative aspects. Moreover, another factor that disrupts political governance in the Philippines is corruption. Indeed, several developing countries experience disruptions in governance arising from corruption when no stable government is established in place (Naher et al., 2020). The current state of the government of the Philippines profoundly affects trade, finance, and the environment.
How it works
Since joining the World Trade Organization better known as the ‘WTO’ in 1995, the Philippines has experienced a shift in its economy from an agrarian economy transitioning towards industry and export (Bajpai, 2021). This is due in part to new trade agreements and an increase of open markets after the Marcos Administration. In addition, the Philippines receives foreign aid since it is regarded as a developing country. A major way this aid makes its way into the country is through foreign direct investments with its main partner, the US. This aid has been used to fund developmental projects such as infrastructure, roads, and buildings (USAID, 2021).
In an attempt to compete with its Asian competitors, over the last decade, the Philippines has been making a commendable effort to promote industrialization (de Dios & Williamson, 2015). With astounding pressure to industrialize, the land traditionally allotted for agriculture is starting to be used for industrialization over all the nation. However, while the economy and culture are rapidly transforming for the better, the environment is taking a toll (Magdalena, 2016).
Globalization has been a significant contributive factor in the way the Philippines has been shaped over the last decade and although industrialization has had positive impacts in terms of stimulating the economy, certain negative effects are also observable throughout the island.
In most third-world and developing countries, the postcolonial period witnessed a rise in state-centric approaches to governance. This was primarily due to an absence of private capital and a lack of an advanced market. “More importantly, the scope and role of the state expanded considerably as a result of the government’s nation-building developmental agenda in these countries irrespective of their ideological identities based on capitalist or socialist inclinations” (Haque, 2002). From the late 1990s onwards to the present, the government of the Philippines has been upgraded to a sophisticated system rivaling that of the US. The Philippines has a three-part judiciary system in which there is a legislative, executive, and judicial branch with the president being the head of state and government. This benefits the average Filipino because they can vote and effectively voice their opinions. However, like most developing countries, corruption in the Philippines has created distrust between the government and its people. Furthermore, the government has set three main functional aims namely, minimal, intermediate, and activist. The government aims to employ these concepts when structuring its economy (Patalinghug, 2003). Considering the long list of responsibilities that their government has taken on, Patalinghug (2003) critiques, “that although the government has moved on from basic services to things such as the regulation of markets, it has yet to provide programs that alleviate the conditions of the economically poor.” He notes that despite the many capabilities of their government thus far, those economically poor were not accounted for.
Only those in high positions of power such as governmental officials, military personnel, figureheads, and high-income benefit and are protected within the present system of government. Unfortunately, the poor in the country continues to witness their financial conditions worsen while the government develops industrialized areas of the Philippines such as Manila and Cavite, in an attempt to promote industrialization. Much of the Philippine islands are provinces that are neglected due to a lack of administrative efficiency. The poor such as those coming from these provinces are neglected since they do not receive the same educational opportunities as compared to the rich from industrialized areas. Indeed, people from provinces were reported to often halt all educational inclinations and opportunities at the age of 16 to engage in agricultural practices. Patalinghug (2003) states, “These inadequacies seem to indicate that the Philippines is a state with weak capability due to its inability to adequately provide functions that are characteristics of a state with minimal capacity.”
In response to his analysis, it is argued that overall globalization initiated by the Filipino government has had a tremendous negative impact, which outshines productive industrial efforts. Their government is yet to establish programs and initiatives in place to help the poor and regulate funding for projects in the provinces. Specifically, during the Marcos Administration in the years of 1980 to 1985, financial openness and accountability were at an all-time low because of the existence of rigid monopolies in the market which reduced investment and led to extensive borrowing (Deluna & Chelly, 2014). This exemplifies how the instability of the government in the past has severely harmed the Filipino economy in the present.
The Philippines has been upfront about receiving foreign aid, with the US being one of its biggest benefactors. In the year 2010 alone, trade between the US and the Philippines was estimated to be roughly as much as $15.4 billion (Deluna & Chelly, 2014). The amount of aid received is a direct result of the increasing external debt that the Philippines has accumulated over the past years. In addition to the increasing debt, the GDP of the country has continued to decline. The government of the Philippines and its beneficiaries have mutually agreed to utilize the financial aid to enhance rice production, inland fish farming, and industrial crops. In recent years, a significant proportion of this aid has been used to improve rice technology such as purchasing machinery used for harvesting and water irrigation systems. Experimenting with rice production in the Philippines is beneficial for its Asian neighbors, countries such as Brunei since the Philippines offers its neighbors its own form of aid by sharing knowledge of agricultural techniques (Jennings, 2018). Moreover, in 2014, in light of Papua New Guinea’s depleting economy, a large number of Filipinos migrated to the region to compensate for the labor shortage. In turn, the supply of Filipino workers was reimbursed by Papua New Guinea in the form of remittances sent back to the Philippines. Therefore, although the Philippines could not offer financial aid, it demonstrated its worth in terms of offering aid in the form of an invaluable labor force.
Moreover, the People’s Republic of China is considered an important investor and provider of aid to the Philippines. According to recent collaborative agreements, China has awarded the Philippines $169 billion in aid to be invested towards the building of railways and infrastructure by 2022 (Jennings, 2018). This holds the promise of substantially improving the economy since more powerful and influential countries such as China are beginning to invest in the Philippines. This demonstrates that there is a strong belief in regaining spend revenue. It is asserted that the financial aid provided to the Philippines by several countries is very positive since it has the strong potential of stimulating the economy of the Philippines. In particular, people living in industrialized regions are reasoned to significantly improve their living conditions because of newly created employment opportunities arising from the development of new industries. Such constructive endeavors motivate people to engage in employment opportunities that would both benefit the country and themselves as opposed to working on private projects from home. However, employment opportunities created as a result of the construction of new industries may not benefit individuals who are not able to travel abroad to conduct business propositions with international clients as well as those who do not possess skills used in the industrialized age. Nevertheless, it is reasoned that the overall benefits of receiving financial aid may gradually become thoroughly observable in terms of improved economic conditions and long-term stability.
In the past decade, the Philippines has also profoundly revolutionized its trade market. By signing the Articles of Agreement (AOA) of the Asian Infrastructure Investment Bank (AIIB), the Philippines has demonstrated its commitment towards the increased import of goods. Although the import of goods is generally considered to be a positive and collaborative endeavor, it also means that the Philippines is increasingly reliant on goods production by other countries such as China, Malaysia, and Indonesia as its top trading partners. In the 1980s, the Philippines strongly supported trade openness in order to boost foreign markets and free trade agreements. The desired outcome was to obtain funds while creating potential opportunities to invest (Deluna & Chelly, 2014). While the trade market is flourishing, it has had a negative impact on the labor force. Orbeta (2013) has extensively discussed the concept of “de-industrialization” in his paper titled “Enhancing labour mobility in ASEAN: Focus on lower-skilled workers”. Orbeta (2013) asserts that while the trade market is observably flourishing, “the cheap imports from low wage economies flood highly developed economic markets”. In other words, people in the Philippines who are engaged in low-skill labor suffer from excessive imports.
Globalization in trade has had both positive and negative implications for the economy of the Philippines. Trade openness has created security, alliance, and collaboration with powerful and influential counties around the globe. This collaboration has also secured the influx of foreign aid into the Philippines towards the development of infrastructural projects. However, the majority of the Philippines’ local workforce is negatively affected by industrialization since trade openness has resulted in unemployment and job displacement for low-skilled workers. Important cultural knowledge of farming and sustainable living is threatened to be lost forever.
After an evaluation of the Philippines’ engagement in the trade market, it is concluded that the overall effects of trade openness have been detrimental to the Philippines’ economy. It is true that trade openness significantly benefits those who work in multinational corporations (MNCs), possess high skill jobs, and reside in more industrialized parts of the islands, these people represent only a small population of the Philippines. A much larger population constitutes those with low-skill jobs such as workers of the agrarian sector. Not only is land allotted for rice fields and other agricultural resources diminishing at an accelerated rate, culture and tools of trade are also being lost. Even these workers with a low skill set still possess the invaluable knowledge of sustaining their natural resources. When knowledge such as time of harvest and agricultural techniques associated with increased efficiency is lost, it creates a debilitating dependency on other countries for goods that would otherwise be locally produced.
The Philippine islands comprise a rich collection of tropical forests and islands abundant in exotic fruit and rice fields. However, over the last few years, efforts to promote industrialization to push the Philippines into the 21st century have resulted in the agricultural economy and environment taking a severe toll. The signing of the AOA resulted in an observable reduction of agricultural subsidies to the north which would improve market access to countries that export agricultural products (Aquino et al., 2013). In theory, the AOA agreement would have benefited the economy of the Philippines. However, it has a negative impact on the agricultural sector since developing countries like the Philippines have little or no domestic product to export due to industrialization. The conversion of agricultural land to exporting zones, industrial centers, and real estate has resulted in a rapid loss of agricultural resources and topsoil. Industrialization has also caused desertification and soil erosion in several regions. In fact, five million hectares of land that was once used for rice farming have now been reduced to 1.9 million hectares.
With arable land gradually becoming more and more scarce, the government has set initiatives in place to promote the import of goods that could have been produced locally. This has resulted in a profound increase in unemployment (Aquino et al., 2013). The reduction in land area for traditional agricultural resources has led to the Philippine farming sector shifting its production from resources such as rice and corn to more appealable goods such as mangoes, cassava, asparagus, etc. that can be sold in the market. However, this has come with significant consequences. More farmers in the provinces and commercialized farming sectors have begun using pesticides and fertilizers with chemical formulations unknown to locals. Although using such products produces better and high-quality goods, it also greatly endangers the health of workers who come into contact with these goods. Indeed, Aquino et al. (2013) reports that in areas of Mindanao, ambulances are on kept on standby when pesticides are sprayed due to the imminent and debilitating harm that pesticides pose to human health.
For example, the pesticide called MOCAP commonly used in banana production is MOCAP is reported to be harmful to the land since it causes soil erosion and desertification. This also indicates that the use of such a harsh chemical to be used on products that are to be consumed and distributed is not appropriate (Pérez et al., 2015). Therefore, it may be said that while intentions of the AOA and the government of the Philippines may not have been blatantly destructive, certain initiatives such as changes in land use and the use of harsh pesticides have ultimately been harmful to the health and wellbeing of Filipinos. Since the Philippines’ economy and its revenue stems from agriculture, it was perhaps not the most feasible or lucrative endeavor to commercialize large hectares of land in a short period of time. The commercialization and industrialization of farmland negatively affect farmers and those with low skill sets in the agricultural sector. It also creates an economy heavily reliant on imports to sustain itself since goods can no longer be produced locally, resulting in excessive debt and poverty. Therefore, the negative impact of globalization on the poverty and wellbeing of Filipinos far outweighs the benefits in terms of industrialization.
Nevertheless, globalization does offer the promise of the Philippines developing into a thriving economy. Development of new ties, trade relations, employment opportunities, and promoting opportunities to allow low-skilled workers to learn new and more useful skills is key to overcoming the negative consequences of globalization. While globalization has drastically affected the culture of the Philippines as well as its people, it has also paved the way for the development of new opportunities for the growth of the individual and state. It is reasoned that in terms of the development of a lucrative and successful economy, the government of the Philippines still needs to improve governance and ensure that political systems in place are strong and in accordance with the goals of the public. The next thirty years are crucial and it is argued that with appropriate governance, aid, and support, the Philippines will successfully compete with its neighboring countries. Indeed, overcoming adversities through will and constructive initiatives may be the key to the development of a successful and strong nation.
In conclusion, the Philippines has witnessed considerable changes in its economy and culture as a result of globalization. The government is engaged in navigating and assessing the impact of the programs and initiatives that have been put in place to determine if they are feasible for its citizens. Reports regarding public opinion about the government suggest that people are generally dissatisfied with the lack of active programs and initiatives in place to alleviate poverty. Indeed, trade openness has resulted in increased unemployment arising from the shift from an agrarian towards the industrial sector. Although the commercialization of agriculture has some benefits in terms of allowing the Philippines to compete with its Asian neighbors, trade openness has created a debilitating reliance on imported goods. However, there are also some positive effects of globalization. Trade openness has prompted alliance and collaboration with powerful and influential global nations which has also demonstrated their interest in the promising potential of the economy of the Philippines. The Philippines can offer is cheap yet labor, land open to commercialization, and some exports. Nevertheless, the health and well-being of Filipinos, especially those who work in commercial sectors, is at risk from the use of harsh pesticides which also soil erosion, desertification, and a further decrease in exports.
Aquino, A. P., Lim. V. A. A., & Ani, P. A. B. (2013). Republic Act 7607: Empowering smallhold farmers in their economic endeavors. FFTC Agricultural Policy Platform
Bajpai, P. (2021). Emerging Markets: Analyzing the Philippines’s GDP. Retrived from https://www.investopedia.com/articles/investing/091815/emerging-markets-analyzing-philippines-gdp.asp#:~:text=The%20Philippines%20has%20gradually%20shifted,industrial%20and%20service%2Doriented%20economy.&text=The%20low%20level%20of%20productivity,of%20poverty%20within%20the%20sector
Block, D. (2004). Globalization, transnational communication and the internet. International Journal on Multicultural Societies (IJMS).
Deluna, R., & Chelly, A. (2014). Economic Growth, Financial and Trade Globalization in the Philippines: A Vector Autoregressive Analysis. https://EconPapers.repec.org/RePEc:pra:mprapa:60206
de Dios, E. S., & Williamson, J. G. (2015). Chapter 21 – Deviant Behavior: A Century of Philippine Industrialization. In A. M. Balisacan, U. Chakravorty, & M.-L. V. Ravago (Eds.), Sustainable Economic Development (pp. 371-400). Academic Press. https://doi.org/https://doi.org/10.1016/B978-0-12-800347-3.00021-2
Guinigundo, D. C. (2018). The Globalisation Experience and Its Challenges for the Philippine Economy. BIS Paper No. 100q, Available at SSRN: https://ssrn.com/abstract=3332089
Haque, M. S. (2002). Globalization, New Political Economy, and Governance: A Third World Viewpoint. Administrative Theory & Praxis, 24(1), 103-124. https://doi.org/10.1080/10841806.2002.11029352
Jennings, R. (2018). The Philippines, usually a receiver of foreign aid, offers some. Received from https://www.voanews.com/a/philippines-foreign-aid-papua-new-guinea/4399517.html
Korobeynikova, L. (2016). Globalization in the post – colonial world. SHS Web of Conferences, 28, 01058. https://doi.org/10.1051/shsconf/20162801058
Lieber, R. J., & Weisberg, R. E. (2002). Globalization, Culture, and Identities in Crisis. International Journal of Politics, Culture, and Society, 16(2), 273-296. https://doi.org/10.1023/A:1020581114701
Magdalena, F.V. (2016). Globalization and environmental decay: Mindanao during the 20th century. Progressio Journal on Human Development, 10(1). Retrieved from http://ejournals.ph/form/cite.php?id=12941
Naher, N., Hoque, R., Hassan, M. S., Balabanova, D., Adams, A. M., & Ahmed, S. M. (2020). The influence of corruption and governance in the delivery of frontline health care services in the public sector: a scoping review of current and future prospects in low and middle-income countries of south and south-east Asia. BMC Public Health, 20(1), 880. https://doi.org/10.1186/s12889-020-08975-0
Orbeta, A. C. (2013). Enhancing labour mobility in ASEAN: Focus on lower-skilled workers. Philippine Institute of Development Studies Discussion Paper Series No. 2013-17.
Patalinghug, E.E. (2003). Globalization and State Capacity: The Philippines. Philippine Institute for Development Studies. Discussion Paper Series No. 2003-20
Pérez, I. C., Gooc, C. M., Cabili, J. R., Rico, M. J. I., Ebasan, M. S., Zaragoza, M. J. G., Redondo, A. F. S., Orbita, R. R., & Lacuna, M. L. D. G. (2015). Pesticide use among farmers in Mindanao, Southern Philippines. AES Bioflux, 7, 90-108.
USAID. (2021). United States COVID-19 Assistance to the Philippines. Retrieved from https://www.usaid.gov/philippines/covid-19-assistance#:~:text=Over%20the%20past%2020%20years,advance%20the%20country’s%20development%20goals.