Global Financial Crisis - Sanhi, Epekto, at Paraan ng Pagkontrol (AP8-Q4-W5) | NoypiTV
Global Financial Crisis Overview
Introduction to the Global Financial Crisis
- The lesson discusses a significant event that transformed the global economy: the global financial crisis (GFC) which began in the United States but affected countries worldwide, including the Philippines.
- The video aims to clarify what the GFC is, its origins, impacts, and measures taken to control its escalation.
Causes of the Global Financial Crisis
- The GFC emerged due to issues in the housing sector and excessive borrowing in the U.S., leading to bank failures and financial institution collapses.
- A key factor was rising foreclosure rates linked to subprime mortgages—high-risk loans that defaulted before the crisis began. This led to significant losses for banks and financial institutions.
Effects of the Global Financial Crisis
- The collapse of U.S. banks had a domino effect globally due to interconnected financial systems, resulting in widespread fund withdrawals, stock market crashes, and decreased economic activity worldwide.
Measures Taken to Control the Crisis
- Governments and financial institutions implemented several strategies such as bailouts for at-risk banks, enhanced regulations in finance sectors, and stimulus packages aimed at revitalizing economies. These actions were crucial in preventing further deterioration of economic conditions during the crisis.
Impact on the Philippines
Economic Consequences
- Decline in Capital Inflow: There was a slowdown in capital investment into the Philippines affecting government projects and private sector funding capabilities. This limited developmental programs significantly.
- Currency Volatility: The Philippine peso experienced increased fluctuations against major currencies like the dollar due to foreign investors withdrawing from markets, leading to higher prices for imported goods.
- Decrease in Exports & Remittances: Demand for Filipino products dropped as trading partners' economies weakened; remittances also slowed down impacting overseas Filipino workers (OFWs), particularly those employed within finance sectors.
- Foreign Direct Investment Decline: Many foreign companies hesitated or reduced investments due to heightened global economic uncertainty resulting in fewer new businesses and job opportunities within the country.
Conclusion on Understanding Economic Interconnections
- Understanding events like these is vital as they illustrate how deeply interconnected national economies are; studying past crises prepares us better for future challenges ahead. If this video helped you understand more about GFC, consider liking it or subscribing for updates on future content!