The Philippine economic performance in the 1980s is typical of highly indebted countries
(HICs) which were caught in a bind as a result of prolonged recession in developed countries
in the 1980s and the rise in real interest rates. The ability of the Philippines to increase exports
was severely limited by the world economic slowdown and the tall in primary commodity prices.
At the same time, its debt burden rose dramatically as real interest rates rose and funds from
commercial banks dried up.
Under such difficult circumstances, the Philippine government embarked on a series of
stabilization and structural adjustment programs. This study discusses the key macroeconomic
policies adopted in recent years and how they may affect individual households. This discussion
is given in Section Ii. The mechanisms by which monetary and fiscal adjustments affect the labor
market, the goods market and government expenditures including the provision of public goods
are broadly discussed in Section III. In the final section, some areas for future research are
discussed
