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Item Restricted An empirical analysis on the direction of causality between official development assistance and economic growth for the Philippine economy(2009-10) De Jesus, Christopher F.This paper presents an empirical analysis of the relationship between the inflows of Official Development Assistance and Economic Growth for the case of the Philippines. First a small explanation of what Foreign Aid is in terms Official Development Assistance is presented followed by the section explaining the experience of the Philippine economy with Official Development Assistance for the past seven years and a review of the literature concerning Aid. The Philippines is shown to substantially receive Official Development Assistance from its main donors. Actual data from 1970 up to 2006 is then used in order to estimate the aid-growth equation for the Philippines. First a neoclassical production function is obtained and then subjected to different model tests for verification. And then following the heels of a previous study conducted by Rukmani Gounder on the Solomon Islands and on Fiji, a standard Granger Causality Test is employed in order to examine the direction of causality between Official Development Assistance and economic growth, here measured in terms of the annual growth rate of Gross Domestic Product. The results of the study show that in the case of the Philippine economy, ODA inflows (measured as a fraction of annual GOP) do not Granger-cause the annual growth rate of the country's Gross Domestic Product, and in fact it is the other way around- it is the annual growth rate of National Income in terms of Gross Domestic Product which Granger- causes the annual inflow of Official Development Assistance measured as the ratio of annual ODA to annual GDP. Conclusively, a few recommendations are given in accordance with the findings of the study.