The Relationship between Philippine Population, Remittances, Foreign Direct Investment, and Trade Openness on its Gross Domestic Product

Abstract

The Philippine economy is regarded as one of the leading emerging markets, although many issues remain unsettled. The country experienced ups and downs in its economic growth through different administrations and policies that affected its various determinants. In the past decades, the Philippines has focused on changing the country’s economic standing. Policymakers and researchers are interested in improving the country’s economic performance by identifying leading driving forces. This study will analyze the relationship between Population, Remittances, Foreign Direct Investment, and Trade Openness on Gross Domestic Product. It would specifically investigate the nature of the relationship between the variables to guide policymakers in prioritizing indicators that would generate the most growth. This paper aims to understand these relationships in the Philippine context from 2005-2020. The results of the adjusted regression model show that GDP has a relationship with TO and Remittances, which rejects the null hypothesis. Remittances accept the null hypothesis, making it an insignificant variable in the model. It also shows that FDI positively correlates with GDP, while Population and TO affect GDP negatively. In the four assumptions mentioned in the methodologies, only one stayed true in the variables used in a Philippine setting: As remittances increase, GDP also increases. Furthermore, these observations confirm that Population and TO affect the economic growth of the Philippines negatively. The researchers recommend that the Philippine government create policies to improve the FDI attractiveness of the Philippines, encourage employment for OFWs, and create more economic opportunities for the growing population.