The Vietnamese economy overtakes the Philippines: From economic strategies to governance and flood control

IN 1975, North and South Vietnam reunited after decades of devastating war and emerged with its GNI per capita at just around $100. In stark contrast, the Philippines then regarded as one of Southeast Asia's leading lights posted a GNI per capita of roughly $400 or quadruple that of Vietnam.

- By Cesar Polvorosa, Jr.

Fast forward to nearly 50 years later, the hierarchy has reversed. In 2024, Vietnam's GNI per capita reached $4,490, overtaking the Philippines' $4,470 for the same year. The gap is expected to widen to around $100 in Vietnam's favor by 2025. Using GDP per capita (PPP), a measure of real living standards, the divergence is even more striking: for 2025, Vietnam is projected at $17,480 which is far above the Philippines' $12,913 (IMF World Economic Outlook, April 2025).

I remember visiting the Vietnamese refugees at the Bataan Refugee Camp during a field trip of our UP Development Studies class decades ago and I can't help but ask: how did Vietnam accomplish this remarkable transformation, and what major factors prevented the Philippines from keeping pace? The answer lies in contrasting development models, foreign investment strategies, governance quality, demographic trajectories, education systems, and the political economy of reform. More recently, the comparison also extends to how both countries respond to global disruptions such as the Trump administration's tariff shock and to long-term resilience challenges like flood control, climate change, and corruption.

DIVERGENT ECONOMIC MODELS

Vietnam pursued an export-oriented manufacturing strategy which has proven significantly more successful over the past half century than the Philippines' service-heavy, remittances-dependent model. Export performance alone tells a compelling story. Vietnam's exports amount to an astonishing 105-107% of its GDP, making it a true export powerhouse in Asia. The Philippines, by contrast, has exports equivalent to only a paltry 27-1 32% of GDP.