Perspectives on ‘Dutertenomics’
Build, build, build” is the new mantra of the Duterte administration, as our top infrastructure officials joined Cabinet economic managers in the “Dutertenomics Forum” held earlier this week. I was invited to share my own reactions to Dutertenomics from my perspective as economic manager in the Ramos Cabinet. The forum highlighted the “Golden Age of Infrastructure” that the government promises over the next six years, bent on narrowing the wide gap that developed over the years between us and our neighbors in terms of quantity and quality of infrastructure. Indeed, if Dutertenomics succeeds in delivering on this—and with our past track record, there are many skeptics out there—a lot of other things will fall into place. Even so, I noted in a recent column that our neighbors have announced similarly aggressive moves to beef up their infrastructure as well. So even as we’re catching up on our own internal gap, the gap with our neighbors may not necessarily narrow.
I centered my reactions on six points: 1) We have been on a roll; 2) Our foreign partners all matter; 3) We still lag behind the region; 4) Dark clouds are forming; 5) Dutertenomics is on the right track, mostly; and 6) A silent time bomb is ticking on us.
On the first, the audience found it refreshing that our current economic managers readily gave (and have consistently given) credit to the good work done by our previous leaders for the economic momentum we’ve enjoyed over recent years—a welcome change from the blame-throwing and credit-grabbing that was perhaps carried a bit too far in the past. I need not elaborate here on the “roll” we’ve been having on the economy, as I’ve written amply on it in this space. This roll has been evident in the “breakout mode” our economy has been in since 2010, be it in price stability (much lower inflation rate), jobs generation (declining domestic unemployment rate even as growth in overseas worker deployment has dramatically slowed down), or GDP growth.
In the welcome spirit of candidness that marked the forum, I pointed out how our top sources of trade, foreign direct investments (FDI) and remittances include countries that have been on the receiving end of the President’s foul language of late—and that the least have been those he has shown special favor to (China and Russia). Even if this pivot dramatically boosts such inflows from them, the relative sizes (GDP) of their aggregate economies tells us that these cannot possibly make up for potential losses in the US and European markets, still the world’s largest. In short, “inclusiveness” as an objective should apply to our foreign economic policy as well. That is, let us forge new partnerships, but not forsake traditional ones.
The reality is, even after a substantial boost in exports and an eightfold rise in our average annual FDI inflows, we still tail our neighbors, and in the case of exports, are even farther behind. I also sounded the alarm on what I recently wrote here as brewing “dark clouds,” seen in a renewed rise in inflation and unemployment rates, and slowing (albeit still rapid) growth, stressing the need for vigilance and reform consistency. Again, I candidly pointed out a few things that have no place in Dutertenomics: restrictive rice trade policies; populist deviations from Finance Secretary Carlos Dominguez’s proposed tax reform package; extreme policies on labor, land and natural assets; and having “UP” (that is, uncoordinated policies) rather than “UST” (unity, solidarity and teamwork—the hallmark of the Ramos Cabinet to which I had the honor to belong).
Finally, I pointed to the time bomb ticking in our midst: of severe stunting from malnutrition that 33.5 percent of young Filipino children now suffer. Stunting-induced damage on brain and physical development is lifelong after five years of age. I keep warning that our so-called demographic sweet spot will actually be a demographic time bomb, if one in every three in our coming working generation will be low-productivity underachievers, misfits, and, at worst, criminals, as a result of child stunting today—and this is not how Dutertenomics should be remembered 20-30 years hence.
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