This paper describes a small quarterly macroeconometric model of the Philippine
economy. The model consists of sectors of private consumption, investment,
government, trade, production, prices, money, and labor. The equilibrium-correction
form is used for all the behavioral equations. The tracking performance of the model,
both within-sample and out-of-sample, is evaluated and found satisfactory. Policy
simulations indicate it is crucial that the Philippine government address its debt
problem for it to achieve higher future growth. Oil price simulations also show
the country is highly vulnerable to external shocks.