From Borrower to Creditor—And Back Again: The Philippines’ Economic Journey

Wazzup Pilipinas!?

"We went from borrower to creditor to deep in debt in less than a decade because we wanted “change”. We got the “change” we deserved, all right."

In a moment of financial prowess, the Philippines, once a borrower of international aid, emerged as a creditor nation in 2012. Under the administration of President Benigno "Noynoy" Aquino III, the country made history by pledging $1 billion to the International Monetary Fund (IMF) to aid Europe during its sovereign debt crisis. At the time, the Philippines boasted a robust $77 billion in foreign exchange reserves—an achievement that allowed it to extend help to struggling economies abroad while securing its own economic stability.

This was more than a financial maneuver; it was a strategic move to protect the livelihoods of hundreds of thousands of overseas Filipino workers (OFWs) in Europe. A full-blown financial collapse in the region would have spelled disaster for Filipino workers, leading to mass layoffs, reduced remittances, and widespread economic hardship back home. By supporting Europe’s recovery, the Philippines was not only safeguarding global stability but also protecting its own citizens and their families from economic devastation.

However, history took a sharp turn. Despite the economic stability fostered under Aquino’s leadership, many OFWs who had benefited from these efforts later turned against him. The 2016 elections saw the rise of Rodrigo Duterte, a populist leader who openly criticized Western institutions. His administration, followed by that of Ferdinand Marcos Jr., steered the country down a dramatically different economic path. Within less than a decade, the Philippines’ debt skyrocketed to an astonishing 17 trillion pesos—more than triple the five trillion pesos inherited from Aquino’s tenure.

The transformation from borrower to creditor was an extraordinary milestone, but the country’s swift regression into deep debt has raised pressing concerns. Did the promised "change" truly benefit the nation, or did it serve as a costly lesson in economic mismanagement? As the Philippines faces mounting financial challenges, one crucial question remains—how long will it take to rebuild the stability it once had, and will history be allowed to repeat itself once more?

*From the post of Gerry Cacanindin

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