Hierarchical Market Economy in the Philippines

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Hierarchical Market Economy in the Philippines

I have to disagree with this argument since the development of this country did not yet reach the transformation required to change its economic model. Despite the noticeable increase of skilled laborers on the Philippine market and recent foreign investments, the amount of low-skilled, low-wage, and low value-adding workers is still prevalent (Ofreneo). The program that aims to create a modern industrialized economy in the Philippines has not achieved its goals yet (Ofreneo). According to Carney, the Philippines had the highest proportion of large firms under the control of families among the nine East Asian economies in 2008 (153). The majority of investments from overboard does not help the country to stray from the hierarchical model either, primarily because consumption-oriented distribution industries receive the most attention, while other sectors remain stagnant (Ofreneo). It is essential for the country to develop all necessary sectors in order to achieve the desired change.

At the same time, the societal structure of the Philippines does not experience any changes, which further strengthens the hierarchical market economy. The inequality present in Philippine society leads to economic under-development and a noticeable disparity in the levels of education, which leads to the strengthening of low-skilled laborers (McDoom et al.). Many other statistics, such as the portion of the budget that is spent on R&D annually, remain relatively low when compared to other Eastern Asian countries, signifying the stagnant state of the Philippine market (Carney). This countrys economy remains hierarchical, despite the efforts of the government to promote competitiveness, higher performance, and attract foreign companies (Carney). The Philippines is on the right track to modernize its economic model, however, this transformation is yet to happen.

Works Cited

Carney, Richard W. Varieties of hierarchical capitalism: family and state market economies in East Asia. The Pacific Review, vol. 29, no. 2, 2015, pp. 137-163.

McDoom, Omar S., et al. Inequality Between Whom? Patterns, Trends, and Implications of Horizontal Inequality in the Philippines. Social Indicators Research, vol. 145, no. 3, 2018, pp. 923-942.

Ofreneo, Rene E. Can PHL Get out of the Low-wage, Low-skilled, low-value-adding Economic Trap? BusinessMirror, 2018, Web.

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