(DP 1998-03) The Economic Choices We Face

Abstract

We examine the three options at the policymakers disposal to pull the Philippine economy out of the currency crisis and propel it to a sustainable growth orbit: the BSP option, the incentives restructing option, and the protectionist option. In a situation of financial panic and the resulting liquidity crunch, the BSP option is hastening a recession while the protectionist option will sacrifice the future for the present. The incentives restructing option seeks to nurture the gains already paid for before and during the crisis in the interest of quick recovery and future growth.