An Economic Development Cooperation Study: Japan’s ODA for the Philippines’ Lower-Middle-Income Trap
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The middle-income trap (MIT) states that middle-income economies have found it challenging to reach the high-income stage over an extended period. Overcoming MIT has long been discussed as an essential socio-economic issue, notably in Southeast Asia. Official Development Assistance (ODA) helps developing countries accelerate further growth as development cooperation. The Philippines has the longest-running history of operating under the lower-middle-income trap (LMIT). Much less research on the relationship between the ODA and MIT and of culprits that hinder the ODA were identified in the existing research. Using secondary data and POLS modeling, the strength of the Japan ODA predicting the percentage change in R2 variance in the LMIT was evaluated in nine economies. ODA was found to be a significant predictor (F [1, 130] = 26.553 p = .000) and is thus a substantial factor in escaping LMIT. Using the qualitative analysis, state actors’ wasteful procrastination and excessive dependency on the donor were found to be significant culprits. Building a further trustful relationship with Japan and the ASEAN is desired for the Philippines by overcoming the culprits.
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