The Philippines Has Come Such a Long Way

03/05/2015 10:59 am ET | Updated May 05, 2015

In 2010 I published an article that captured the attention of tens of thousands of Filipinos around the world. It regarded two events involving the Philippines that both made sensational headlines at the same time -- the botched rescue of Chinese tourists taken hostage by a disgruntled former policeman, and a botched response to a question by Miss Philippines in the finals for the Miss Universe contest. At that time I noted that they were connected in that they represented the peril and promise of the Philippines, but also a tendency for Filipinos (like everyone else) to sometimes make excuses when things go wrong, rather than take ownership and do something about it. 2010 seems like a very long time ago; the country has achieved so much since then.

For many years pundits had commented that the Philippines appeared to be heading backwards economically and politically, while many other Asian countries were barreling toward middle income status. I noted that, of course, other countries have disputed elections, other countries' leaders do questionable things, other developing countries struggle to achieve sustainable economic growth, and that there are ongoing examples of fresh political turmoil and economic hardship not only in Asia, but throughout the world.

The difference was that many of the countries experiencing political instability and economic dislocation don't have some of the things the Philippines has, such as agricultural self-sufficiency, a high literacy rate, and a largely homogeneous population. Indonesia possesses similar qualities and managed to transcend monumental political turmoil, turn its situation around, get on the path to democracy, stay there, and become a darling of the international investment community. The Philippines had this in the 1960s. Why could it not have it again, I wondered?

In spite of all the things the Philippines has going for it, my view then was that its people didn't demand enough of themselves, or of their government. Political apathy and a willingness to accept a low common denominator of performance had taken their toll on the psyche of the Philippine people. The Philippines has descended into an ongoing competition between political dynasties: Marcos, Arroyo, and yes, Aquino. Why do Filipinos continue to vote them in, election after election? Is it because of a lack of viable alternatives? No. Is it because of political apathy? Possibly. Or is it because they have no expectations that anything will change, regardless of who is in power?

President Aquino has demonstrated that it is possible to be part of political dynasty yet be focused on the common good, and achieve enough in a single term of office to transform the country from the sick man of Asia to one of its leading economies. In 2009, the year before Aquino assumed office, the country's GDP growth rate was just above 1%. Since he assumed power in 2010, the country's average GDP growth rate has been 6.3%. In 2009, the Philippines' Gross National Income (in PPP dollars) was $627 billion; in 2013, it was $770 billion (a rise of 23%). And since 2009 the country's total foreign exchange reserves (minus gold) have doubled, to more than $80 billion.

There are a host of other economic indicators that have skyrocketed since Aquino took office, but the most important achievement has been the designation of investment grade status, and the confidence of the foreign investment community. World Bank President Kim said last year that the Philippines could become the next economic miracle of Asia.

This is due, in large part, to Aquino's refusal to continue the regrettable tradition of corruption, nepotism and abuse of power, and choose instead to turn the country around by stabilizing the political process, reforming the internal revenue service and customs bureau, and making good governance the hallmark of his administration, rather than an historical aberration.

Yet, for all the progress that has been made, many challenges remain. The country still ranks poorly in Transparency International's Corruptions Perceptions Index and the World Bank's Doing Business rankings. The country's infrastructure remains poor, investors remain frustrated by investment laws limiting ownership in local firms, electricity remains very expensive, and inflation hit a three-year high last year. For all these reasons, the Philippines cannot afford to backtrack.

In that 2010 article I wrote that if the Philippines wants to get its act together and live up to its potential, it needed to demand more of itself, and that it could do so by stopping making excuses for its failures and ending its acceptance of the lowest common denominator. I take great pleasure in noting that the country and its people have done just that. It is my hope that this pivot toward demanding more of its leaders and government will not be an aberration, but will, rather, prove to be the norm going forward. Congratulations Filipinos - you did it!

*Daniel Wagner is CEO of Country Risk Solutions.