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Homework answers / question archive / What is the present situation of the Philippine economy? What would you suggest for government in terms of fiscal policy and the central bank in terms of fiscal policy to maintain macroeconomic stability?

What is the present situation of the Philippine economy? What would you suggest for government in terms of fiscal policy and the central bank in terms of fiscal policy to maintain macroeconomic stability?

Economics

What is the present situation of the Philippine economy? What would you suggest for government in terms of fiscal policy and the central bank in terms of fiscal policy to maintain macroeconomic stability?

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The current economic position of the Philippine is secure, and it has anticipation to increase its growth with 5.8% in 2019. It is also expected to recover back to 6.1 % and 6.2% in 2020 and 2021, respectively. The target achievement can be through the employment of the set implementations and the currently approved reforms towards growth achievement. The government, through fiscal policy, can cut tax rates to allow the deposition of money in the economy through spending. When taxation rates are low, business owners and investors will be willing to expand their business and make new investments. As a result, more people will seek jobs, thus reducing unemployment levels.

On the other hand, the central bank can ensure economic growth through liquidity control. They can also utilize open-air markets through the purchase and selling of securities from member banks. These happen through the change of money at had without modifying reserve requirements. Lowering of interest rates on borrowed money allows people to be more willing to take loans and make investments and spending as a result of increased purchasing power. Therefore, the central bank can enhance economic growth in Philippine through regulation of low-interest rates.