SOAS Research Online

Abstract

This thesis is about the political economy of the Philippines in the process of recovery from the ruin of economic crisis in the early 1980s. It examines the dynamics of Philippine politics by focussing on banking sector reform between 1986 and 1995. After the economic turmoil of the early 1980s, the economy recovered between 1986 and 1996 under the Aquino and Ramos governments, although the country is still facing numerous economic challenges. After the "Asian currency crisis" of 1997, the economy inevitably decelerated again. However, the Philippines was seen as one of the economies least adversely affected by the rapid depreciation of its currency. The existing literature tends to stress the roles played by international financial structures, the policy preferences of the IMF, the World Bank and the US government and the interests of the dominant social force as decisive factors underlying economic and banking reform policy-making in the Philippines. However, the excessive focus on these factors limits our ability to examine economic reform policy-making since they depict Philippine politics as a process in which policy outcomes are determined by relatively immediate expressions of either foreign-rooted or socially-rooted demands. This thesis will offer an alternative view, by seeking to show the merits of an approach which locates "policy elites and institutions" at the centre of the analysis of banking reform policy-making. It will be argued that the decisions of policy elites, including the President, legislators and state officials (Central Bank officials), and the interactions among them, which are affected by changing political institutions, are vital to explanations of the success or failure of banking reform. Political institutions strengthen or weaken the interests and capacities of presidents, the centre of Philippine government, in promoting reforms in the banking sector.