Nineteen ninety-five will be remembered as the year that a critical mass supportive of market-oriented reforms was achieved in the Philippines.

After a long period of intense political struggle between the forces of reform and the deeply-entrenched traditionalist forces favouring continued protection- ism and state-brokered development, a breakthrough was accomplished in the year. Not coincidentally, the Philippine economy hit its stride in the same period, a string of natural calamities notwithstanding. In the third quarter of 1995, the country's national product grew by 6.8 per cent, riding the crest of unprecedented investment and export growth. The invesmentsled nature of this economic surge is the outcome of an economic and fiscal reform package pursued relentlessly in the years preceding by a political leadership that deftly engaged populist and conservative forces in an open and democratic political system.

Staunchly committed to deepening democracy while simultaneously advancing reforms — reforms that asked the population to accept short-term costs in exchange for long-term sustainable growth — the political leadership in the Philippines has ventured into a development path consciously distinguished from the more usual East Asian model. Instead of relying on heavy-handed political methods to forge a development strategy that emphasizes market discipline in a political culture long nurtured in state patrimonialism, the political leadership put emphasis on the aspects of popular empowerment and greater accountability intrinsic to the liberalization process. These coincided with the pro-democracy consensus forged earlier.

The completion of the fiscal and reform process might, conceivably, have been achieved much earlier if the democratic space opened by the 1986 EDSA uprising was constricted to quell populist opposition to market-opening measures. But the costs would have been high and the gains in political stability probably negated by a deepening polarization of opinion. Advocates of an obsolete economic nationalism might have acquired the special status of martyrs for an anachronistic cause. The legitimacy of both the government and the reform programme it espoused might have been rendered tenuous.