The ar.ticle analyzes the problems confronting the Philippine
economy and offers an explanation of the reasons and events that led
to the current economic crisis in the Philippines. After the author
makes the necessary discounts for national political events and time
role played by the international economy and other external factors,
he focuses on the role played by the market mechanism in the history
of the Philippine economy.
Much of the problems, according to the author, resulted from a
cumulation of situations in which interventions in the market system
made the economy less efficient. Deviations from the price mechanism
as the prime element of solving essentially market problems
aggravated national problems rather than lessened them. The author
contends that the most glaring of these deviations was the unrealistic
exchange rate policy adopted by government through the years. Consequently,
with tile worsening of some problems, the ability of time
government to cope with other more basic duties was adversely affected.
Sicat cites two major components for recovery in the future:
(a) restoration of credit lines and foreign exchange inflows through
the sheer economics of readjustment; and (b) restoration of confidence
in the Philippine economy. The latter is not only economic;
it is essentially governed by political factors
