Stance on the Effects of Economic and Political Globalization to the Philippines and the

Filipinos

Globalization is a term that captures a number of growing political, economic,

intellectual, cultural, and environmental phenomena that are fast reshaping our worldviews

(Steger, 2013). Globalization is a process concerned with the expansion of goods and services,

knowledge, ideas, and information throughout the world. The convergence of economic and

cultural systems is what drives globalization, or globalisation as it is known in various parts of

the world. This convergence encourages and, in some circumstances, compels more

interdependence, integration, and engagement across nations (Lutkevich, 2021). There are types

of globalization; Economic globalization is concerned with the international financial market

integration and coordination of financial exchange. It is exemplified by free trades agreement

such as the Trans-Pacific Partnership and North American Free Trade Agreement. Political

globalization is concerned with bringing nations together politically, culturally, and

economically through national policies. The United Nations and NATO are examples of political

globalization efforts (Lutkevich, 2021). What do you think will happen when the Philippines, a

nation with a huge population rich in resources, different cultures, traditions, history, and

beautiful sceneries (Fernando, 2021), open up to the world?

The effects of globalization have resulted in a positive impact and benefited the

Philippines and the Filipino citizen, especially economically. Like any other emerging market

economy, the Philippine economy has become more intertwined or joined the global economy.

This is noticeable because of the fact that there is an increase in migration and trade in goods

(Guinigundo, 2018).
 Globalization has increased the international migration from the Philippines as data from

the UN show an increasing percentage in 1995 3.5% to 5.4% in 2017 as a ratio of Filipino

migrants to the country's total population, there is also an increase in the ratio of overseas

Filipino stocks to the country's population, from a 9.4 percentage in 1997 to 10.3 in 2013. The

Philippines's openness to labor mobility ever since 1970 has been providing the country decades

of experience as being a source of foreign migrants. This resulted in continued emigration for

Filipinos to find employment overseas, which is one of the reasons why Filipinos migrate. The

other is the unemployment situation, and Even though in recent years the Philippines economy

has been improving, this is indicated because the unemployment rate decreased from 2009 to

2017 from 7.5 percent to 5 percent, the unemployment situation is still not enough for Filipinos

to stop migrating to seek work overseas. Employment prospects in other nations are regarded to

offer higher salaries and compensation, as well as better lifestyle packages such as insurance and

health benefits regardless of the kind of job (Guinigundo, 2018).

Globalization in the Philippines has produced a positive effect on employment and

economic growth. Loosening trade barriers and foreign portfolio flow resulted in a higher per

capita GDP growth in the country. The free-flowing of people caused by globalization has

benefitted the Philippines as remittances from overseas Filipino workers have supported the

economy of the Philippines in times of crisis and normality. The increase of remittances also has

increased economic growth, investment, labor productivity, and consumption (Guinigundo,

2018). Overseas Filipino Workers are a factor that led to an increase in the volume of

remittances sent back to the Philippines. Remittances to the Philippines are on the rise. The

World Bank stated that the Philippines is the fourth-largest beneficiary of inward remittances,
trailing only Mexico ($36 billion). India ($79 billion), and China ($67 billion) (CompareRemit,

2020).

In addition (Bhatia, 2013) stated that Foreign remittances are the Philippines' second-

largest source of foreign reserves, after exports. In terms of percentage of GDP, remittances

ranked even higher than a foreign direct investment in 2006. Some academics believe that OFWs

have aided in closing the gap between the poor and the wealthy in the Philippines by contributing

to the growth of the middle class. This is why migrant workers are dubbed "new heroes," as they

make significant sacrifices by infrequently working in harsh conditions. They are benefiting the

entire country as a result of the system of aiding their family. Globalization has improved the

standard of living of many Filipinos; household spending rises as income rises because

remittances travel directly to the families, relatives, and friends, which they use to improve their

general level of living. Many economists have shown a direct link between remittances and

improved education, healthcare, and even business endeavors. Remittance inflows have a

favorable impact on entire communities where recipient households exist. Overseas Filipino

workers are drawn from a diverse range of places throughout the country. As a result, increased

living standards may be witnessed at the level of barrios and towns, as well as large cities and

provinces (CompareRemit, 2020).

According to (The World Bank, 2018), trade is the key to the eradication of global

poverty. Nations that are willing/open to international trade tend to show faster growth, enhance

productivity, innovate and give their citizens higher incomes and more possibilities. It also

benefits households of low income because of the fact that open trade makes goods and services

cheaper for them. Poverty reduction and economic growth on a local and global scale can be

achieved by integrating with the global economy by way of commerce and Global Value Chains.
 Political globalization has a positive effect on the Philippines as trade agreements help

benefit the Philippine economy. Trade has become and has always been an essential part of the

Philippine economy. The emergence of Global Value Chains that have determined modern

commerce has significant implications for integrating emerging countries like the Philippines

into the global economy. The participation of an economy in the Global Value chains is

influenced by a variety of factors, one of which is a Free Trade Agreement(FTA) (Quimba et al.,

2020). Free Trade Agreements is an agreement between two or more countries to decrease trade

barriers. A free trade policy allows products and services to be bought and sold across

international borders with little or no government tariffs, subsidies, quotas, or bans impeding

their interchange (Barone, 2020).

The trade openness of the Philippines from the 1990s to the 2000s has enhanced the

country's gross domestic product from 88.1 percent to 101 percent. This was due to the fact that

in the 1980s there was an increase in the country's attempts towards a more open trade policy.

This trade openness was also characterized by lower transportation costs and increased

communications and information technology, which aided in the creation of complex Global

Value Chains, notably in electrical and electronics components, allowing businesses to manage

their production more efficiently (Guinigundo, 2018).

Globalization also helps our domestic firms. One of the primary engines of globalization

is multinational corporations which possess enormous assets and capital. They establish

themselves in numerous developing countries (Gazleh, 2001). Multinational corporations

continue to develop across borders as the world economy globalizes and regional economies

integrate. Multinational corporations have a proclivity to overcome the technological gap

between developed and underdeveloped countries. Because they frequently have the necessary
funds for research and development, multinational corporations from industrialized countries are,

in fact, the primary innovators of new and advanced technologies. These technologies are passed

down to their subsidiaries/affiliates in the host nation; these advanced technologies transferred

from their parent company give the subsidiaries/affiliates a competitive advantage to the

domestic firms with which they compete. The coexistence of subsidiaries of multinational

corporations and domestic enterprises in an economy generates externality in the form of

technology spillover from multinational corporations to domestic firms, hence boosting the

efficiency and productivity of domestic firms (Olayinka & Loykulnanta, 2019).

Globalization has helped many Filipinos in all kinds of fields. In the sphere of education,

new technologies in information and technologies, which are linked to the process of

globalization, allowed young adults, students, and researchers in remote locations to access

information from the world's top libraries. They can browse libraries in other nations without

having to go. Globalization, in this sense, aids people in the dissemination of knowledge-related

values. Communication has been made much easier and cheaper than ever before (Gazleh, 2001),

which helps Filipino families that have members who are overseas Filipino workers, remarkably.

Globalization has also helped the tourism industry, Globalization facilitates cross-border

travel, which means more foreign tourists and more worldwide competition from international

tourist locations for the tourism business (Dwyer, 2015). At market values, The Philippines' GDP

was estimated to be 99 billion US dollars in 2005, which tourism has contributed approximately

2 percent of this and generated approximately 1.5 million jobs. In 2006, the tourism industry,

directly and indirectly, employed about 3.49 million people. Travel and tourism supported an

estimated 3.8 million employees in the economy in 2007 (Javier & Elazigue, 2011).
 Despite the benefits globalization has given, such as economic growth, it comes with its

criticism. Disparities in income, trades that favor diverse parties, and disproportional riches are

some of the repercussions of globalization. The argument is that some countries, individuals, and

companies benefit more from globalization while others suffer, sometimes viewed as the "losers"

of globalization (youmatter, 2020). In addition (Fronda et al., 2018) stated that Globalization

may benefit the economy, but it may have a negative influence on the advancement of individual

freedom and human rights. In some nations, the rise of globalization has given rise to the

encouragement of unfair labor practices. Many workers in South East Asia were forced to accept

unjust labor contracts, which resulted in unemployment and underemployment.

Speaking of the losers of globalization , one of the things that come with globalization is

industrialization. Fueled by technological advancements, industrialization results in economic

and social progress by changing a nation into a modernized industrial/developed nation

(Pologeorgis, 2021). This caused the Philippines' economy to evolve from an agarian to a

service-oriented and industrial economy increasingly. This affected the Agricultural sector,

agriculture generated more than one-fourth of the nation's GDP in 1980, but that ratio has now

decreased to 9.3 percent. This industry employs roughly a fourth of the workforce. Crop

cultivation, fishing, forestry, hunting, , and animal rearing are all part of the agricultural industry

(Bajpai, 2020).

There are also problems with Multinational Corporations. According to (Li, 2021),

Multinational firms dominate total output in the Philippines' high-technology sectors.

Multinational corporations frequently engage in low-value-added activities that take advantage

of the host economy's lower labor and production costs rather than higher-value-added activities

that utilize the host economy's knowledge outputs. This is especially visible in the Philippines'
major high-technology export sector, which is electronics, where international businesses

continue to dominate low-value testing services and manufacturing. This is a problem because

the constraints of domestic production and innovation capacities to generate greater value-added

goods and services are frequently the reasons why developing countries fail to progress beyond

the middle-income trap.

In tourism, while globalization helped the tourism industry. This industry also has its

negative effects. As more people visit tourist spots, it necessitates a bigger demand for water,

power, and other resources, which can deplete quickly if left unchecked. The construction of

structures and the necessity for space entails the displacement of local species, vegetation, and

population in order to make room for coastal and land development. Furthermore, more tourists

equal more noise, garbage, and pollution, all of which are harmful to the environment and could

disrupt the area's biological equilibrium (de Jesus, 2017). Not long ago, the Philippines' island of

Borocay was closed to tourists to allow it time to recover from the detrimental environmental

repercussions of recent large-scale tourism (Stainton, 2021), which affected the residents in the

area.

In conclusion, Globalization in the Philippines has its positives and negatives. We cannot

deny that the opening up or the integration of the Philippines to the world has brought with it its

negative effects; although globalization has benefited many in the Philippines, it still produced

its "losers." An example of this is the industrialization that comes with globalization has caused

the Philippines' economy to increasingly evolve from an agrarian to a service-oriented and

industrial economy, thus affecting the agricultural sector of the Philippines (Bajpai, 2020). But,

we cannot deny the positives or benefits it has given to the Philippines. The free-flowing of

people and the loosening of barriers that was caused by globalization has allowed many Filipinos
to be employed overseas, giving their families a better living standard because of the perks of

working overseas but also helping the economy of the Philippines. As stated by (Bhatia, 2013),

In terms of percentage of GDP, remittances ranked even higher than foreign direct investment in

2006. In the sphere of education, new technologies in information and technologies, which are

linked to the process of globalization, allowed young adults, students, and researchers in remote

locations to access information from the world's top libraries (Gazleh, 2001). In spite of its

negative effects, the benefits the Philippines have gotten cannot be overlooked.