Everybody’s talking about inclusive growth, but the latest labor and employment data suggest that the breathtaking growth our economy has been achieving lately—the fastest in all of Asia, in fact—is anything but that. The latest quarterly Labor Force Survey (LFS) of the National Statistics Office (NSO) reports that there were actually 21,000 fewer jobs overall last April compared to a year ago.
Policy inconsistency has been the bane of our economy for far too long. “Implementation inconsistency” may be the better term in certain cases. Whatever it is, our government has had a notorious track record of saying one thing now, and then doing the exact opposite.
Now it’s official: the Philippines is the fastest-growing economy in Asia. Beating China’s first quarter growth (7.7 percent) by a hair, our 7.8-percent growth in gross domestic product (GDP) was proudly homegrown, achieved in the face of a hefty drop (-7 percent) in exports.
In the classic economic development story, a country at the early stages of development starts out as an agrarian economy where the agriculture sector dominates in both output and employment, relative to the other two major economic sectors of industry and services. As agriculture grows and productivity increases with technological change, the sector provides a growing market for the products of industry, and releases surplus labor that further propels industrial growth. The economy moves on to the industrialization stage marked by further rises in incomes and employment, supported by scientific and technological innovation. Wealth accumulates and the economy matures, eventually “graduating” into services sector dominance as higher incomes support growing demands for services of various kinds.
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.
