Concern to Global / International Country Malaysia

Government spending is a big part in making up the GDP of ones country. As part of it,
local governments started raising their revenue to also raise their countrys economic growth.
When countrys economic growth is stable, it has the ability and chances to make agreements
and investments towards other countries.
Philippines and Malaysia are known to be part of different international organizations
setting same goals for their countries. It was back in 1959 when Federation of Malaya became
independent and the Philippines established a legation in Kuala Lumpur. The people of the two
neighboring countries have a long history of close economic, cultural and political relations.
They are also both founding members of ASEAN and are both important trading partners.
Malaysia is also second main source of foreign investments for the Philippines among all of the
members of the ASEAN countries.
Philippines and Malaysia are doing their parts to maintain the partnership between the
two of them. Economically speaking, these two countries are taking responsibility to make their
economic growth stable starting from their local governments. Philippines as well as Malaysia
are both imposing tax policies in raising local government fund. Last 2014, the government of
Malaysia made some changes in their tax collection policy. They decreased the tax rate for
personal income from 1 3% and 1% for corporate income. Aside from that, it is known that
Malaysia collected more tax from foreign property owners. It is a way different here in the
Philippines where tax rate for personal income is based on the range of their salary, corporate tax
rate is 5% higher while the property tax rate is lower than Malaysia. These imposed tax policies
greatly help these two countries in raising their local government revenue.
Efforts to improve tax administration and expenditure management have helped ease the
Philippines' tight fiscal situation and reduce high debt levels. The Philippines received several
credit rating upgrades on its sovereign debt in 2012, and has had little difficulty tapping domestic
and international markets to finance its deficits. Achieving a higher growth path nevertheless
remains a pressing challenge. Economic growth in the Philippines averaged 4.5% during the
MACAPAGAL-ARROYO administration but poverty worsened during her term. Growth has
accelerated under the AQUINO government, but with limited progress thus far in bringing down

unemployment, which hovers around 7%, and improving the quality of jobs. Underemployment
is nearly 20% and more than 40% of the employed are estimated to be working in the informal
sector. The AQUINO administration has been working to boost the budgets for education, health,
cash transfers to the poor, and other social spending programs, and is relying on the private
sector to help fund major infrastructure projects under its Public-Private Partnership program.
Long term challenges include reforming governance and the judicial system, building
infrastructure, improving regulatory predictability, and the ease of doing business, attracting
higher levels of local and foreign investments.
As for Malaysia, with the current Prime Minister NAJIB, Malaysia is attempting to
achieve high-income status by 2020 and to move farther up the value-added production chain by
attracting investments in Islamic finance, high technology industries, biotechnology, and
services. NAJIB's Economic Transformation Program (ETP) is a series of projects and policy
measures intended to accelerate the country's economic growth. The government has also taken
steps to liberalize some services sub-sectors. The NAJIB administration also is continuing efforts
to boost domestic demand and reduce the economy's dependence on exports. Nevertheless,
exports - particularly of electronics, oil and gas, palm oil and rubber - remain a significant driver
of the economy. As an oil and gas exporter, Malaysia has profited from higher world energy
prices, although the rising cost of domestic gasoline and diesel fuel, combined with strained
government finances, has forced Kuala Lumpur to begin to reduce government subsidies. The
government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas
sector supplies about 35% of government revenue in 2011. Bank Negera Malaysia (central bank)
maintains healthy foreign exchange reserves, and a well-developed regulatory regime has limited
Malaysia's exposure to riskier financial instruments and the global financial crisis.
Comparing their economic performance for the year 2013, Malaysias revenue for the
year reached $61.31 billion while $36.35 billion for the Philippines. This only tells that
Malaysias revenue is 85% greater than the Philippines. The Gross National Income of Malaysia
for that year is also 4 times more than the Philippines reaching $8,770 while the Philippines have
$2,210. To add more of it, the government consumption for Malaysia and Philippines is 13.5%
and 10.5% respectively.

Based from the economic status of Malaysia and Philippines, it is clear that these two
countries are likely to be similar to each other. They are both growing countries making their best
to maintain the stable condition of their own countrys economy. Being partners since 1964,
these two countries will continue their relationship as trading and investing partners, looking up
on each others economic status and progressing together.