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15 - Convergence of Philippine Spatial Inequality during the American Colonial Period
- Edited by Hal Hill, Australian National University, Canberra, Majah-Leah V. Ravago, Ateneo de Manila University, James A. Roumasset, University of Hawaii, Manoa
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- Book:
- Pro-poor Development Policies
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 09 January 2024
- Print publication:
- 10 June 2022, pp 390-413
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- Chapter
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Summary
INTRODUCTION
This paper explores spatial inequality in the Philippines during the American colonial period. Although there is sizable literature on regional development and dynamics in the Philippines in the late twentieth century (see Balisacan and Hill 2007; Estudillo 1997), comparatively little has been said about the economic and development disparities across regions in the early twentieth century, and how these disparities may have been shaped during the American colonial rule.
The Philippines was a country in shambles at the beginning of the twentieth century. Engaged in sporadic battles since the Revolution of 1896 and eventually declaring independence from Spain in 1898, the country found itself confronting yet another emerging empire, the United States. In 1898, just months after Spain ceded the Philippines to America via the Treaty of Paris, the nascent Philippine Republic waged war against its new colonial master. The atrocities inflicted on the population were staggering: the US army corralled men, women and children in Laguna and Batangas—about 300,000 of them—in concentration camps and razed houses, farms and livestock. The economic dislocation proved to be so widespread, it would take several decades for the country to recover (Corpuz 1997). The conflict also exacted a tremendous toll on human development, from which the Philippines took decades to recover. For instance, Bassino, Dovis, and Komlos (2018) find that Filipinos’ heights in the 1930s (a proxy for nutrition adequacy) took 60 years to recover from levels recorded back in the 1870s.
After quelling the armed resistance as well as co-opting Filipino elites by its “policy of attraction”, America embarked on an ambitious project to prepare Filipinos towards independence and self-government. This entailed building institutions such as the civil service, public infrastructure and economic policies for the “prosperity and contentment to the country of the Philippines” (Corpuz 1997). The thinking was that a dynamic Philippine economy, serving as “a ready and attractive field of enterprise”, will not be a burden to the American people (Booth 2012; Corpuz 1997).
As a result of this deliberate policy, and partly because the economy was coming from a low base, the country’s gross domestic product (GDP) grew by an average annual rate of 5.2 per cent from 1902 to 1910 and 5.79 per cent from 1910 to 1920.
21 - Regulation, Market Evolution and Competition in the Philippine Microfinance Sector
- Edited by Hal Hill, Australian National University, Canberra, Majah-Leah V. Ravago, Ateneo de Manila University, James A. Roumasset, University of Hawaii, Manoa
-
- Book:
- Pro-poor Development Policies
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 09 January 2024
- Print publication:
- 10 June 2022, pp 595-632
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- Chapter
- Export citation
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Summary
INTRODUCTION
The Philippine microfinance sector encompasses banks, non‑governmental organizations (NGOs) and various non-bank financial intermediaries (e.g., cooperatives and credit unions) providing financial services to customers that most mainstream financial institutions deem too costly or risky. The sector has transformed over the years, both in terms of the number of institutions providing microfinance services and the number of clients served. From the late 1980s when NGOs and similar not-for-profit institutions used to dominate microlending, the sector has steadily grown, attracting commercial players, chiefly banks of varying orientations (e.g., rural, thrift and cooperative banks), encouraged by the business potential of tapping a large, hitherto underserved, market. The microfinance clientele has similarly grown from a few thousands to several millions (MCPI 2016).
The growth of the sector can be traced in part to a wider acceptance of the view that broadening access to finance is an effective strategy for poverty alleviation. The pessimism that grew out of the failed subsidized credit programmes of an earlier period has given way to a more sanguine view of “banking with the poor”, based on the celebrated successes of models like the Grameen Bank and the Association for Social Advancement (ASA) of Bangladesh and BancoSol of Bolivia. A key element in these successful experiments has been the application of sound banking principles emphasizing financial sustainability, challenging microfinance institutions (MFIs) to rely less on government or donor subsidies while serving more of the poor.
At the institutional level, the creation of a policy environment more hospitable to financial inclusion supported the paradigm shift from one of subsidy dependence to financial sustainability. This included the adoption of microfinance standards for NGOs as well as the encouragement given banks to get involved in microfinance. In 1997, the Philippines rolled out the National Strategy for Microfinance (NSM) to provide the framework for the promotion of microfinance as a sustainable activity. The strategy called for government policies directed at enlarging the role of private MFIs in financial services provision for low-income groups. It also provided the basis for subsequent laws and issuances on financing poverty alleviation measures.