“The black man wants to be white,” wrote the great anti-colonial thinker Frantz Fanon in his seminal Black Skin, White Masks (1952). His disturbing observation captured one of the most insidious legacies of colonial domination – where the colonized can eventually internalize the worldview of their colonizers, embrace their standards, and measure their own worth through the eyes of those who have subordinated them. Fanon was writing about the psychological alienation produced by racialized colonial oppression.
But his broader insight into the internalization of dominant ideas offers a striking parallel with Philippine economic policymaking. Filipino politicians, economic technocrats, and bureaucrats have so thoroughly absorbed the neoliberal worldview promoted by the International Monetary Fund (IMF) and World Bank that the IMF-World Bank no longer need to exert the same coercive pressure they once did.
False freedom from debt
It’s almost ironic, because the country is in a much better position now to resist the anti-development ideas of these international financial institutions (IFIs).
The Philippines hasn’t had an IMF lending program since December 2000 and exited post-program monitoring in 2006. The IMF denominates its loans in special drawing rights (SDRs), an international reserve asset whose value is based on a basket of major currencies. Between 1962 and 2000, the country borrowed SDR3.9 billion under 23 IMF programs—equivalent to US$5.3 billion at current exchange rates. All these loans have been repaid.
The World Bank records 236 Philippine projects involving US$38.3 billion in commitments between 1957 and September 2026. Although its lending to the country is still substantial at US$17.6 billion as of mid-2026, it’s still much less significant now relative to the size of the economy than at earlier peaks decades ago, even after spiking recently. Annual commitments which reached as high as the equivalent of 2.4% of GDP in 1978 have moderated to an average of just 0.5% in the last five years, from 2021-2025.
What changed? The Philippines isn’t as desperately dependent on multilateral creditors for dollars now as it was during the debt crises of the 1980s and 1990s—mainly because of overseas remittances and business process outsourcing (BPO) revenues.
Overseas remittances were the equivalent of just 2-3% of gross domestic product (GDP) in the early 1980s. This share rose rapidly through the 1990s and early 2000s to reach a peak of 14.5% in 2005, before moderating to around 9% in recent years. Meanwhile, BPO revenues that were a negligible fraction of a percentage point of GDP in the early 2000s started rising in the mid-2000s to reach a little over 8% in recent years.
More than any Filipino industrial exports—of which there remains barely any—these dramatically transformed our foreign exchange position. The country’s foreign exchange reserves were as low as 3-4% of GDP in the 1980s. This share grew to over 120% of GDP in 2012, before recently moderating to around 80 percent.
The country’s external debt stock and external debt service have moderated as well. Foreign debt that was as high as 90% of GDP in 1987 fell to around 60-65% in the 1990s until the mid-2000s, and then down to a low of 23% in 2017 before creeping up since the pandemic to around 32% today.
Why do these trends matter? The IMF-World Bank’s coercive power most of all comes from their potential chokehold on a country’s foreign exchange. Underdeveloped countries are so dependent on imports of food, energy, and other essential goods and services that not having the foreign exchange to pay for these can be catastrophic for the domestic economy.
This is the economic vulnerability that makes the IMF-World Bank so potent. Their stabilization programs, structural adjustment programs, and conditionalities provide or otherwise unlock vital foreign exchange for countries needing this.
From coercion to consent
While the Philippines no longer needs the IMF-World Bank’s loans and foreign exchange like before, the internalization of their “free market” doctrine by political and economic elites is too complete.
The IMF-World Bank haven’t stopped telling the Philippine government what to do. They still prescribe policies, advise government agencies, influence legislation, and attach conditions to loans. The difference is that now they’re preaching to the converted—which is even worse.
The Italian Marxist thinker Antonio Gramsci wrote of hegemony as the ability of dominant social forces to perpetuate their power not simply through coercion but by making their worldview appear natural, legitimate, and universally beneficial.
After decades of IMF-World Bank programs, loans in the tens of billions of dollars, and the steady indoctrination of technocrats, bureaucrats and academia, what began as an externally imposed ideology has become “common sense”. Neoliberal ideas have become embedded in domestic institutions, professional training, bureaucratic practices, and prevailing notions of economic rationality—and in the minds of domestic policy and intellectual elites.
Think of what Malacañang, Congress, the economic managers, business groups, schools of economics, journalists, think tanks, and lobby groups all so thoroughly believe are self-evident economic truths.
We must attract more foreign investment. We must preserve investor confidence. We must become more competitive in global markets. We must improve the ease of doing business. We must expand public-private partnerships. We must maintain fiscal discipline.
Over time, what was once enforced through loan conditionalities has become accepted as sound economic management—rather than political choices with profound consequences for the inequitable distribution of wealth, power, and productive resources.
But confidence for whom? Competitiveness based on what? Discipline imposed on whom? Development for whose benefit? The economic orthodoxy doesn’t even know what it needs to ask, most of all.
This intellectual subordination has also acquired a powerful material foundation in the interests of domestic elites who benefit from the existing economic order. Bureaucrat capitalists who profit from public office and state patronage. And comprador oligarchs who accumulate wealth from partnerships with foreign capital, import dependence, privatization, and control over domestic markets.
From bad to worse
The government has so internalized subordination, much like Fanon’s colonized subjects, that the country’s neocolonial condition has become camouflaged. Yet whether imposed or volunteered, the adverse impact of the IMF-World Bank’s neoliberal “free market” policies is exactly the same—chronic Philippine backwardness and relentless decline.
The tragedy of neocolonial domination isn’t just that foreign powers exercise control. It is how the dominated are eventually made to understand themselves, their possibilities, and even their aspirations through the worldview of those who dominate them.
Overcoming this requires far more than paying off foreign debts or reducing dependence on multilateral financing. It means challenging entrenched economic ideas, confronting the domestic interests that perpetuate them, and recovering the capacity to imagine and pursue an alternative development path that benefits the many instead of a few.
It means treating national industrialization and agricultural modernization, scientific and technological progress, and decent work with universal social services as the central objectives of economic policy. It is seeing that economic sovereignty lies in upholding the interests of the people, and that a government’s decision to subordinate the country to foreign interests is not an exercise of sovereignty.
This begins with the government taking responsibility to actively transform the country’s productive foundations instead of merely administering an inequitable economic order designed over decades of externally influenced restructuring.
One of the most enduring legacies of IMF-World Bank impositions is not the debt that remains on the books, but the colonial mentality and dependence persisting long after debts have been repaid.
