What’s Gone Wrong with the Philippines’ Economy? (Level 1)

Not long ago, the Philippine economy was doing well. Growth was fast, and inflation was low. But that changed. Now inflation is high, growth is slow, and a credit agency downgraded the country for the first time in over 20 years. A corruption scandal caused problems. Money for flood projects was lost. The government spent less, and protests stopped business. Foreign investors worried. Then, war closed a major oil route. The Philippines imports most of its oil, so fuel prices jumped 70%. Inflation rose from 2% to over 7%. The economy relies on people spending money, so high prices hurt growth. Growth fell to 2.8%, the lowest since 2009. The central bank raised interest rates to fight inflation, but that could slow growth more. They face a difficult decision.