Leveraging Money Creation to Address Poverty,
Homelessness, and Unemployment in the Philippines
Ian Y.H. Chua
1, 2, 3, 4
Email: ianyhchua2024@gmail.com
12 January 2025
Introduction
The Philippines, ranked as the 36
th
largest economy in the world by nominal GDP, had a
GDP of approximately $450 billion in 2023 [1]. Despite steady economic growth, the
country faces persistent challenges such as poverty, homelessness, and unemployment.
According to the Philippine Statistics Authority, poverty incidence among the population
was 18.1% in 2021, while the unemployment rate hovered around 4.8% in mid-2023 [2].
These systemic issues can be alleviated through strategic monetary policies, including
money creation. However, obstacles and misperceptions about money creation hinder
its potential. This paper explores how the Philippine government can utilize money
creation to tackle these issues while addressing prevalent concerns.
Misperceptions and Obstacles in the Philippines Regarding Money Creation
In the Philippines, there is a widespread belief that printing money inevitably leads to
hyperination and economic collapse, as seen in historical cases like Zimbabwe and
Venezuela. Additionally, a strong adherence to austerity and decit-reduction policies
prevents the government from utilizing monetary expansion as a tool for development.
Critics argue that increased money supply will devalue the peso, raise import costs, and
disproportionately harm the poor through ination [3].
Another obstacle is the lack of public trust in government institutions and fears of
corruption, which fuel skepticism about the eectiveness of government-led economic
programs. Moreover, limited nancial literacy among policymakers and the public
exacerbates the misunderstanding of how modern monetary systems function [4].
Addressing Misperceptions and Overcoming Obstacles
To dispel fears about ination, the Philippine government must educate the public and
policymakers on the mechanisms of controlled money creation. Historical evidence,
such as Japan’s post-war economic recovery and the U.S. New Deal, demonstrates that
monetary expansion, when directed toward productive investments, does not
necessarily lead to hyperination [5].
The government can adopt Modern Monetary Theory (MMT) principles, which emphasize
that as a sovereign currency issuer, the Philippines can fund domestic programs without
the immediate risk of insolvency. Strategic spending in underutilized sectors, coupled
with ination control measures like progressive taxation and price controls, can prevent
economic overheating [6].
Furthermore, strengthening anti-corruption measures and ensuring transparency in
public spending will build trust and enhance the credibility of government-led initiatives.
Independent oversight bodies and regular audits can ensure funds are allocated
eiciently and eectively.
Addressing Poverty Through Monetary Expansion
Money creation can be directed toward social welfare programs, such as conditional
cash transfers, similar to the Pantawid Pamilyang Pilipino Program (4Ps), which has
proven eective in reducing poverty and improving education and health outcomes [7].
Expanding such programs with newly created funds can further alleviate poverty and
stimulate local economies through increased consumer spending.
Reducing Homelessness
The lack of aordable housing remains a pressing issue in urban areas like Metro Manila,
where informal settlements proliferate. The government can use newly created money to
nance large-scale housing projects, providing aordable and dignied living conditions.
Implementing rent control policies and oering low-interest housing loans can ensure
that housing remains accessible to low-income families while stimulating the
construction sector and creating jobs.
Combating Unemployment
Job creation in the Philippines can be bolstered by investing in sectors such as
agriculture, infrastructure, and renewable energy. For instance, reviving the agricultural
sector through irrigation projects and modern farming techniques can increase
productivity and employ millions of rural workers [8].
Additionally, developing new towns and urban centers outside Metro Manila can
decentralize economic activities, reduce congestion, and create employment
opportunities. Inspired by Singapore’s success with planned urban development, the
Philippines can allocate funds for designing and constructing new towns that oer
modern infrastructure, housing, and commercial spaces.
Controlling Ination
To mitigate inationary risks associated with money creation, the government can
implement the following strategies:
1. Targeted Spending: Direct newly created funds to sectors with underutilized
resources to avoid demand-pull ination. For example, investing in rural
infrastructure where resource gaps exist will boost productivity without
overheating the economy.
2. Progressive Taxation: Increase taxes on high-income earners and luxury goods
to absorb excess liquidity, ensuring that money circulates productively within the
economy [9].
3. Regulatory Controls: Implement strict price controls on essential goods and
services to prevent proteering and cost-push ination.
4. Exchange Rate Management: Stabilize the peso by managing foreign exchange
reserves and promoting balanced trade policies to avoid imported ination.
Lessons from History
Historical precedents illustrate the success of targeted monetary expansion. For
example, the New Deal in the United States funded public works programs that provided
jobs and revitalized the economy during the Great Depression. Similarly, post-war Japan
used controlled money creation to rebuild its economy and achieve rapid
industrialization without triggering hyperination [10].
Policy Recommendations
To maximize the benets of money creation, the Philippine government should:
1. Launch public employment programs focusing on infrastructure, housing, and
agriculture.
2. Expand conditional cash transfer programs to reduce poverty and stimulate
economic activity.
3. Develop planned urban centers to decentralize economic growth and create
jobs.
4. Strengthen anti-corruption mechanisms to ensure transparency and
accountability in the use of funds.
5. Educate the public and policymakers about the principles of sovereign monetary
systems to dispel myths about money creation.
Conclusion
Strategic money creation oers the Philippines a transformative opportunity to address
poverty, homelessness, and unemployment. By overcoming misperceptions and
implementing prudent policies, the government can leverage monetary expansion to
achieve sustainable and inclusive economic growth. As global economic dynamics
evolve, the Philippines must prioritize human development and economic equity over
outdated scal conservatism. The poverty rate in the Philippines had decreased from
18.1% in 2021 to 15.5% in 2023. That is (18.1 – 15.5) = 2.6% within 2 years. Can Filipinos
eliminate poverty to zero by (15.5%/2.6%) = 5.96 or within the next 6 years? In Cebuano
or Bisayan language, “Padayon!”
Acknowledgments
This paper was developed with the assistance of ChatGPT 4.0, which provided insights and renements in the
articulation of philosophical and scientic concepts.
1
Founder/CEO, ACE-Learning Systems Pte Ltd.
2
M.Eng. Candidate, Texas Tech University, Lubbock, TX.
3
M.S. (Anatomical Sciences Education) Candidate, University of Florida College of Medicine, Gainesville, FL.
4
M.S. (Medical Physiology) Candidate, Case Western Reserve University School of Medicine, Cleveland, OH.
References
1. World Bank. (2023). GDP (current US$) – Philippines. Retrieved from
https://data.worldbank.org
2. Philippine Statistics Authority. (2023). Poverty and unemployment statistics.
Retrieved from https://psa.gov.ph
3. Salceda, J. (2021). Ination myths and realities in the Philippines. Journal of
Philippine Economics, 58(3), 45-67. https://doi.org/10.1016/j.jphil.2021.03.004
4. Reyes, C. M., & Tabuga, A. D. (2019). Financial literacy and its impact on
economic decision-making in the Philippines. Philippine Institute for
Development Studies Discussion Paper Series, 2019(04), 1-23.
5. Werner, R. A. (2003). Princes of the Yen: Japan's central bankers and the
transformation of the economy. New York: M.E. Sharpe.
6. Kelton, S. (2020). The decit myth: Modern Monetary Theory and the birth of the
people’s economy. New York: PublicAairs.
7. Manasan, R. G. (2011). Pantawid Pamilyang Pilipino Program and its impact on
poverty reduction. Philippine Journal of Development, 38(2), 55-76.
8. Briones, R. M. (2020). Revitalizing Philippine agriculture: Policy reforms and
investment priorities. Philippine Review of Economics, 57(1), 89-110.
9. Piketty, T. (2014). Capital in the twenty-rst century. Cambridge: Harvard
University Press.
10. Rauchway, E. (2008). The Great Depression and the New Deal: A very short
introduction. Oxford: Oxford University Press.
