President must go beyond his anticorruption drive

The UN Millennium Development Goals (MDGs) report cited in the news item titled “PH poverty reduction remains dismal, says UN” (Inquirer, 10/29/12) stated that “Of the seven MDGs, the country got failing grades in four—eradicating extreme poverty, achieving universal primary education, reducing child mortality and sustaining maternal health. . . On the other hand, it received favorable scores in gender equality, reducing tuberculosis and HIV-AIDS prevalence, and ensuring environmental sustainability.”

The Aquino administration has to go beyond its successful anticorruption drive by overcoming the difficulties reflected in key economic indicators.

1. The Philippines has 1.5 percent of its total population employed in government as compared to Indonesia’s 2, Malaysia’s 3.1, and the 5-10 percent in advanced countries. This means that the government should invest in people instead of streamlining the bureaucracy.

2. The Philippines has the highest population poverty incidence and income inequality with a factor of 12, followed by Indonesia’s 8.5, China’s 6.4, Vietnam’s 5.4, Thailand’s 4.3 and Malaysia’s 1.7. There is a need to go beyond the Conditional Cash Transfer (CCT) program.

3. The Philippines’ gross domestic product (GDP) per capita at purchasing power parity is computed at $4,100. This is 20 percent higher than Vietnam’s $3,400 but only 87 percent of Indonesia’s $4,700; 48 percent of China’s $8,500, 43 percent of Thailand’s $9,500 and 26 percent of Malaysia’s $15,800. During the period 1999-2011, the average GDP growth rate of the Philippines was 4.43 percent, which was higher than Thailand’s 3.74 and Malaysia’s 4.41; but lower than Indonesia’s 4.71, Vietnam’s 6.56 and China’s 8.38. In order for the Philippines to catch up with its neighbors, it has to attain the much higher growth rate set by world economists at 7 percent, aside from implementing population control under a reproductive health law. China, Indonesia and Vietnam invest more in agriculture and industry given their present need.

4. The service sectors of the Philippines, Thailand and Malaysia (which contribute 55.7 percent, 52.7 percent and 48 percent, respectively, to their total GDP) are much higher than China’s 43.1, Indonesia’s 38.1 and Vietnam’s 37.7. During the global financial and economic crisis in 2001, 2009 and 2011, the Philippines, Thailand and Malaysia had the lowest growth rate—just like the advanced countries whose service sectors contributed more or less 70 percent of the total GDP. The country should embark on improving the agricultural and industrial sectors.

The country’s thrust toward good governance, anchored on President Aquino’s anti-corruption drive, amid less growth and equity, may not lead to lasting environmental sustainability.

—EDMUNDO ENDEREZ,

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