No Free Lunch
Unfinished agenda
By Cielito F. HabitoWith the midterm elections behind us, it’s time to focus back on the work to be done—and there’s a great deal of it.
With the midterm elections behind us, it’s time to focus back on the work to be done—and there’s a great deal of it.
Elections always perk up the Philippine economy. Yesterday’s elections are one important factor that drives analysts’ expectations that this year’s growth in our gross domestic product (GDP) will match or exceed its 6.6 percent growth last year. A quick scan of GDP growth data over the past 25 years would readily show that election years tend to be marked by higher than usual economic growth. In the election years of 2004, 2007 and 2010, our GDP grew by 6.2, 7.2 and 7.3 percent respectively, as against an average of only 4.4 percent in the nonelection years since then. While there are surely many other determinants of economic growth, the above data seem to suggest that elections have a substantial growth-inducing effect on the economy, pushing growth by up to 2-3 percentage points. How does that additional growth come about?
Fellow Inquirer columnist Winnie Monsod was quite disturbed—nay, agitated—as we discussed the advance executive summary recently submitted by the National Economic and Development Authority (Neda) to the President, of its assessment on the controversial Aurora Pacific Economic Zone and Freeport Authority (Apeco).
By some accounts, the National Statistical Coordination Board (NSCB) and its mother agency the National Economic and Development Authority (Neda) ruffled feathers in the Palace and the Cabinet with the way they announced the first semester 2012 poverty figures last week. Some even speculated that it may have cost Neda Secretary Arsi Balisacan his slot in the President’s delegation to the Asean meeting in Brunei, having dropped out of the list at the last minute.
When I visited Iloilo City with my wife in June last year, it had been years since I had last been there, and I was pleasantly surprised at how much the place had changed. I have since returned several times, and I could tell that this is a city in rapid transition, with exciting things in store.
Philippine export earnings in February fell by a hefty 15.6 percent from last year, the National Statistics Office reported last week. The fall largely traces to an even heftier drop during the same period (-36.5 percent) in our electronics exports, which still comprise our single largest export product category. Global demand for personal computers has slumped in recent months, spurring a deep decline in electronics exports worldwide.
I often hear the lament that we Filipinos are not as mindful as our neighbors appear to be of the impending closer integration of the Southeast Asian economies into the Asean Economic Community (AEC), to culminate less than two years from now. I have heard none of our candidates for national office in the coming elections address the topic, for example, in the way it figures in public discussions within our neighboring countries. And yet, this move of the 10 nations that make up the Association of Southeast Asian Nations (Asean) promises to have profound implications within and across their respective economies.
So proclaimed headlines on last week’s investment-grade credit rating granted to the Philippines by Fitch Ratings, one of the “big three” international credit rating agencies. Many believe it’s just a matter of time before the other two, Standard & Poor’s and Moody’s Investor Service, follow suit. Fitch’s move is historic, as this is the first time the country has achieved investment-grade status in decades.
As we commemorate Christ’s suffering this Holy Week, I am led to revisit anecdotes I have written in past articles on the wisdom one can find by talking to those who suffer the most from our society’s inequities. Through the years, I have found some of the richest insights in conversations with common folk expressing their aspirations in ways that made me see their plight more clearly, and rethink old preconceived notions and ideas shaped by ivory-tower analysis.
I am personally impressed at how the Department of Budget and Management under Secretary Florencio “Butch” Abad is now taking politically unpalatable but long-warranted reform directions. As such, he demonstrates strong political will and firmly grounded principles, qualities now seemingly rare in public service. For these, he has been awarded the Metrobank Foundation Professorial Chair on Good Governance at Ateneo de Manila University. He recently delivered his professorial chair lecture titled “Pursuing the Aquino Administration’s Agenda for Empowerment Through Public Expenditure Management” to an appreciative multisectoral audience—so appreciative that some declared him a worthy “presidentiable” in 2016.
It is not correct to say that the 40 richest Filipino families own 76 percent of our nation’s gross domestic product (GDP). I have recently been widely misquoted as having said so. What I did say, and had first explained in this space nine months ago (“Economic growth for all,” 6/26/12), was that the growth in the aggregate wealth of our 40 richest families in 2011—which Forbes Asia reported to have risen by $13 billion in 2010-2011—was equivalent (in value) to 76.5 percent of the growth in our total GDP at the time, which official data show to have risen nominally then by P732 billion, or around $17 billion. I found that this ratio was only 33.7 percent in Thailand, 5.6 percent in Malaysia, and 2.8 percent in Japan—suggesting that our income inequality is much worse than in our neighbors.
Our economy’s growth rate may have stepped up to 6.6 percent from 3.9 percent in 2011, but that’s still not quite growing twice as fast—the declared goal of last year’s “Arangkada” forum of the Joint Foreign Chambers of the Philippines (JFC). Last week, the JFC gathered once again for “Arangkada 2013” to assess progress on a package of recommendations they made in late 2010 toward achieving accelerated and broad-based growth for the Philippine economy. More than two years hence, the group again took stock of forward movement—or the lack of it—in some 470 recommendations embodied in the 2010 document of the same name.
