How did the Philippines respond to the 2008 Global Financial Crisis, and what made its economy more resilient compared to other countries?
Answer (1)
When the 2008 Global Financial Crisis happened, many countries in the world entered into deep recessions. Big economies like the United States and Europe faced major problems in their banks, stock markets, and housing sectors. However, the Philippines was not as badly affected, and many economists say that the country showed resilience—meaning it was able to recover faster and avoided a full-blown recession.Major Reason 2008 Global Financial Crisis One major reason for this resilience was the Philippines’ strong and well-regulated banking system. After learning hard lessons from the 1997 Asian Financial Crisis, the country had implemented reforms that made its banks more stable and cautious. They had fewer bad loans, better risk management, and stronger rules to protect depositors. Because of this, there was no banking collapse in the Philippines during the 2008 crisis.Another key reason was the steady remittances sent home by Overseas Filipino Workers (OFWs). Even though global markets were struggling, millions of Filipinos working abroad continued to send money to their families. These remittances kept household spending strong, which supported small businesses and helped the economy keep moving.The government also acted quickly by increasing public spending on infrastructure, education, and health. These projects created jobs and pumped money into the economy. Additionally, the Bangko Sentral ng Pilipinas (BSP) lowered interest rates to make borrowing cheaper and encouraged banks to lend money to businesses and families.Because of these factors, the Philippines avoided a recession in 2008. The economy still slowed down, but it did not collapse. In fact, it began to grow again in the following years, and this strong performance helped build global confidence in the country’s economic management.This experience showed the importance of good planning, strong banking regulations, and the critical role OFWs play in keeping the Philippine economy stable during global financial shocks.
