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What happened?

/ 02:54 AM October 24, 2013

My sympathies to the family of Quasi Romualdez, a wonderful gentleman we’ll miss greatly.

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I will do something today that will make you cry and ponder: If so little has changed in the past four decades, will it now? I will quote extensively from a magazine article on the Far East and Australasia, written in 1970 (43 years ago), with my comments in brackets. Here goes:

“The performance of the Philippine economy during recent years has been encouraging and present indications promise faster growth rates in the years ahead. The strides being made in agriculture, manufacturing, construction, transportation, communications and services lend support to this optimism; the increased activities in these sectors reflect the accelerated economic gains. But whether or not the country is on the threshold of the so-called take-off into sustained economic growth would be better left for history to determine.” [Well, history determined it didn’t happen. The best way to compare it is to look at a comparable country at the time and now. My choice, Thailand. In 1970 this is what we had (Philippines first, Thailand next): population 37 million vs 35 million; GDP growth 5.4 percent vs 4.9 percent; average growth of agricultural gross value added (GVA) 4.9 percent vs 4.2 percent; current gross domestic product (GDP) $7.3 billion vs $6.4 billion; GDP per capita $198 vs $183. Today, the Philippine population has ballooned to 96 million vs Thailand’s 68 million; from 1990 to 2010 the Philippine economy grew by an average of 3.8 percent vs Thailand’s 5 percent; GDP per capita is a measly $2,587, less than half compared to Thailand’s $5,480. Lastly, average growth of agricultural GVA from 1980 to 1990 dropped to a paltry 1 percent vs Thailand’s 3.9 percent.]

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“However, the pattern of past and present events in the country reinforces the view that a slow-moving and lagging agricultural sector can be stimulated to undergo rapid changes and, consequently, hasten the growth process instead of impede it. And the agricultural transformation plays a very significant role during take-off.” [Agriculture’s share in national output declined from a third to a measly 12 percent currently; the sector’s takeoff role didn’t eventuate and thus failed to uplift the lives of Filipinos, especially those in the countryside.]

“Indicative of the still-dominant agricultural state of the economy, the agriculture, forestry and fishery sector contributed 34 percent of the value of the domestic product in 1967.” [It’s a miserable 12 percent today as its share was taken by services that went from 23 percent to 57 percent where educated labor is needed, cutting out too many people.]

“If the Philippine economy follows a course similar to that shown in the historical growth processes of many developed countries, we can hopefully expect a spurt in agricultural output which, if sufficient, can stimulate the other faster-accelerating growth sectors to generate increases in output that would eventually outpace the contribution of agriculture to the national economy.”

“The total number in the labor force employed in the Philippines increased at an annual rate of 3.4 percent from 1958 to 1963.” [It’s down to 2.3 percent from 2001 to 2012; “official” unemployment stands at 3 million while Social Weather Stations says there are 11.2 million Filipinos without a job as of end-June 2013.]

“That the growth of the Philippine population, estimated at about 3.3 percent”—[1.7 percent in 2010-2012]—”per year, will present major problems in the future is almost a certainty.” [The problem it has created is greater poverty, an estimated 18 million poor in 1970 vs 27 million now.] “The Philippine average population density, considering that about 33 million people populate a land area of 115,000 square miles, is four times the world average and above that of Europe, Asia and even the whole Southeast Asia.” [Today it’s 828 persons per square mile vs 317 then.]

“If only to maintain current levels of service and facilities, the country must accelerate the growth of all sectors of the economy. … The total value of the country’s mineral reserves has been conservatively estimated at P50 billion.” (The country’s mining wealth is now estimated at P47 trillion but its wealth is now untapped because of a poor decision by President Aquino which he needs to reverse.] “At current prices, the net value added by mining and quarrying for the calendar year 1967 is P346 million, copper alone contributed about 59 percent while gold mining stayed relatively stable during the two-year period at about 16 percent.” [Today quarrying still continues to grow, but mining, as I explained a couple of weeks ago, is stagnant with a bleak future. As the president of a mining firm observed: “Mining can be the wealth future of the country—if the President actively supports it.  As it now stands, the government is busy killing the industry—the legitimate, responsible industry—and if the proposals that appear to be coming out of the Cabinet are actually made into law, they will most definitely finish the job.”]

“The last three years manifested continued expansion in manufacturing and production of durable goods; substantial gains were obtained from improvements on wood manufacturing”—[no wood left]—“electrical machinery and other forms of machinery.” [The last 40 years have seen manufacturing decline from 25 percent of GDP to only 20 percent.]

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What went wrong? In a word, politicians. The corruption and crony capture under Marcos started it all. The restrictive Constitution under Cory changed the people but kept the capture of the economy by too few. Ramos’ period has been the only one where opening up and transformation occurred. Nothing much happened with Erap at the top, and we all know what happened with Gloria. The courts will be judging that.

So, can President Aquino be the leader that breaks the pattern?

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TAGS: agriculture, Communications, Construction, GDP, manufacturing, Philippine economy, Quasi Romualdez, Transportation
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