‘Daang matuwid’ veering away from inclusive growth

When it comes to citing economic accomplishments, the Aquino administration is beginning to sound like a broken record. It keeps on crowing over the fact that under its watch our economy is now experiencing rapid growth in gross domestic product, or GDP, as if that were the litmus test of any country’s economic performance.

But the statistics on GDP hide many unpleasant truths. They could therefore be deceiving. For instance, they do not say that for the year 2012, 75 percent of GDP growth, which was driven mainly by consumption, was monopolized by only 50 families. Meaning, the increase in aggregate income mostly went to the pockets of the members of a small elite circle. It is no wonder why joblessness in the country has become worse and reached an alarming level—over 27 percent by Social Weather Stations’ estimate. Which tells us that the growth in our national income, simply put, has not benefited the vast majority of our people.

Let us take another item from the administration’s laundry list of achievements. The Bangko Sentral ng Pilipinas has proudly reported that for 2013, our so-called current account balance surged. The figures here are supposed to capture a whole picture of our trade exchanges with the rest of the world. A surplus in the current account means more dollars are coming into our coffers than are going out of them—an indicator of economic stability. Of course, the opposite of this situation is a deficit.

Economists say a current account balance is composed of: merchandise trade, foreign investments and unilateral transfers. Our government is giving emphasis to increasing foreign investments and unilateral transfers, but it neglects the fact that our merchandise trade is in deficit. Our imports are growing faster than our exports. We are not producing enough to meet the needs of our people, which is why we have to get what we need from other nations. We are in the process giving more job opportunities to foreign workers than to our own people.

The economy is being buoyed up simply by unilateral transfers, in a word, by the dollar remittances of our overseas workers. President Aquino is plain lucky that he came at a time when these remittances are at their highest levels, reversing the drain in our foreign exchange. If the remittances fall short, he could always open up our economy to more foreign investments.

In fact, there are moves from administration allies to lift the constitutional restrictions on foreign ownership of lands in a bid to attract more foreign investors. We sing halleluiahs to the entry of foreign capital seeing that this earns us dollars and creates jobs for our people, but in the long run the gains will prove illusory. Our founding fathers were very well aware of these dangers when they put in the restrictions on foreign control in the 1935 Constitution, and their wisdom has stood the test of time. The present administration is going to remove all that in one fell swoop. Our natural wealth—the very birthright of our people—will be siphoned off to other lands.

Lacking any vision except the vision of

neoliberalism that justifies leaving the control of the economy to foreign capitalists and

domestic oligarchs, the Aquino administration has now engaged in substantial public expenditures to perk up the economy and give jobs to the people. But it has failed to live up to its

responsibilities to ensure that the people’s money is wisely spent. Most, if not all, of the projects are riddled with graft and corruption in various forms ranging from pork barrel scams to smuggling of goods in connivance with officials of the Bureau of Customs and the Department of Agriculture to ghost beneficiaries in antipoverty programs.

The daang matuwid has become a big joke, and continuing to rear its ugly head is the social phenomenon we call rent-seeking, whereby

tycoons—unlike the entrepreneurs of the early capitalist era who worked to increase the economic pie of the nation—exploit every opportunity to grab bigger slices of it.

The basic problem with Mr. Aquino is that he has no economic policy—he jumps from one ad hoc solution to another. There is no consistent thread in his actions comparable to, say, President Carlos P. Garcia’s Filipino First policy in the 1950s. What is more deplorable, he refuses to let go of the baggage in his administration—the secretaries, directors and other acolytes who have outlived their usefulness.

Mario Guariña III is a former associate justice of the Court of Appeals.