Economic growth up to us
THOSE EXPECTING the government to provide the impetus for the Philippines’ economic growth in 2016 are bound to be disappointed, just as they have been over the past five years.
Yes, there will be an increased pace of government spending this year as the Aquino administration tries to ensure the victory of its standard-bearer at the polls through a late surge in infrastructure spending. This will happen mostly at the local level involving roads, bridges and waiting sheds, instead of the big-ticket items that this country sorely needs.
But this fiscal stimulus is bound to be held back by the same wait-and-see hesitation that has hounded this administration for the past five years.
Thanks to the example provided by the current dispensation, many government bureaucrats are now painfully aware of how their lives can be made miserable by fault-finding agents of the next president set to assume power six short months from now. So, like in previous years, the bureaucrats will take their time in affixing their signatures on project-approval documents, lest they be haled to court on graft charges by the next administration, whether real or imagined.
Yes, government spending will help move economic growth along, but not by much and, by any measure, nowhere near its potential to do so.
For 2016, we must temper expectations of a last-minute surge in project approvals under President Aquino’s economic flagship, the public-private partnership program. Expect would-be megaprojects—which otherwise would have had the capability of generating thousands of new jobs, directly and indirectly, and of marshaling billions of pesos in investments for productive economic use—to meet lackluster fates. Any deal that miraculously makes it through the bidding process over the next six months is certain to break ground only by the time a new president is sitting in Malacañang, too late to have an impact on this year’s economy.
So just like in the past, in the absence of decisive government action, the responsibility for ensuring the growth of the Philippine economy lies once more with the private sector, from big conglomerates all the way down to entrepreneurs running small and medium enterprises, and further down to the individual consumer.
And what faces the private sector on the business and economic front this year?
Apart from potential changes in government policy once the new president is sworn into office, the Philippines and the rest of the world will have to wrestle with rising interest rates, thanks to the decision of the US central bank to raise lending costs for the first time in nearly a decade. For the average Filipino, that will mean more expensive home mortgages, car loans, credit card debts potentially trickling all the way down to your neighborhood “five-six” loan shark.
On the upside, fuel prices will likely remain low this year, meaning the increase on the prices of basic goods will be tempered, aided by the cheaper imports from our neighbors, thanks to the advent of the Asean Economic Community which came into force on Jan. 1, 2016 (but it will mean more competition for local entrepreneurs).
In other words, whatever happens this year, and whoever wins the presidency come May, the environment will not be as easy as the last five years. It will be nothing short of “challenging” (to use the euphemism so loved by businessmen and analysts).
Ultimately, the economic fate of this country in this challenging year is in your hands. Yes, you, the individual consumer.
It sounds counterintuitive, but the amount of investments that will be poured into the economy and the number of jobs that will consequently be created this year will depend on mainly you. It will depend on how many kilos of meat and vegetables you buy at the wet market, how much canned goods you purchase from the grocery stores, how much credit you load onto your mobile phone and how many fried chicken lunches you buy. And lest anyone forget, it will also depend on how well you balance all this consumption with savings in case unexpected challenges come around.
This year, the Philippine economy will rise or fall thanks to the actions of the individual consumer. Just like in previous years, but more so this year, you alone will be responsible for this country’s progress.
Over the next six months, don’t let vote-hungry politicians tell you otherwise.
