Economic doldrums? Not quite
President Duterte reportedly told an audience in Davao City last Friday—participants in the National Information and Communications Technology Summit—that “now, the economy is in the doldrums… Interest rates are picking up, are getting high so it destroys the existing (economic gains).”
He went on: “[In] Manila, they’re starting on the mega projects well; I supposed that they should be doing it on time. [But in the provinces], it’s a doldrums thing.” It would seem that, in speaking of economic doldrums, what the President especially had in mind were the regional economies outside of the capital.
One might jump at this as direct admission by the chief executive that his administration’s economic initiatives aren’t working. And yet he apparently isn’t aware that the data actually suggest the opposite, especially in reference to the regions. The Philippine Statistics Authority recently released the 2017 gross regional domestic product (GRDP) data, breaking down GDP by regions. And guess what: the numbers are actually encouraging.
The latest GRDP data show that in the last two years, all regions of the country positively contributed to the growth of the overall economy, and more evenly so. The same could not be said three years ago, when one region actually contracted, thereby serving as a drag that pulled down the overall economy. This was the Autonomous Region in Muslim Mindanao (ARMM), with a negative GRDP growth rate then of -0.4 percent.
In that year (2015), the fastest grower was the Bicol region, with 8.9 percent. Growth disparities were wide across the regions, with 12 out of the country’s 17 administrative regions growing more slowly than the national average. Only five regions were pulling up overall growth: Metro Manila or National Capital Region (NCR), Bicol, Western Visayas, Zamboanga Peninsula, and Davao region.
But in 2016 and 2017, the top growth rates posted exceeded 12 percent (12.3 and 12.5 percent, respectively, corresponding to the Ilocos and Mimaropa regions), and even the slowest growth rates were respectable at 5.3 and 4.4 percent, respectively (NCR in both years). From five in 2015, there were seven regions growing faster than the national average in 2016, and by 2017, there were eight.
Remarkably, emerging among the faster-growing regions were formerly lagging economies, including the Cordillera Administrative Region, ARMM, and disaster-ravaged Eastern Visayas. All these suggest that our economic growth of recent years has been more geographically inclusive—not quite the doldrums that President Duterte lamented.
Are the statistics I have been citing spurious, or at least unreliable? Could Mr. Duterte have a better grasp of the true situation than government statisticians do? Skeptics and hecklers are prone to belittle the figures reported by our government statisticians. But I maintain my faith in the integrity and professionalism of our statistical system, and in the data they regularly report to the general public.
I say this not so much because they were once upon a time under my administrative supervision, but more out of my direct observations as a member of an independent panel tasked to review the entire Philippine statistical system more than 10 years ago.
To be fair to the President’s own economic managers, “doldrums” isn’t exactly the right word to describe the recent performance of the economy. In fact, the rising inflation and falling peso would normally be seen as reflective of an “overheating” economy, or one that’s growing too rapidly to the point of building up excess steam, reflected in fast-rising prices and surging imports.
I’ve already written of other indicators that more inclusive growth is happening: much greater numbers (and percentage) of wage/salary workers, as against unpaid family workers and individually self-employed ones; more investment- and industry-led growth, as opposed to being consumption- and services-driven; and faster decline in poverty incidence, whether based on official or self-rated measures.
The economy is now being buffeted with headwinds, some coming from the President himself. But that’s a totally different problem from doldrums.
