It’s not the economy, stupid

GOING INTO the last quarter of the P-Noy administration, the trend in the economic wellbeing of the Filipino people is quite good.

This assertion derives nothing from either gross national, or gross domestic, product. Those who regularly feel an impact of GNP/GDP on their lives are mainly bankers—as seen by the intense competition of banks in forecasting it—and not the Filipino people in general.

Personal optimism is Very High. Last week’s good news (“Favorable news about poverty,” Opinion, 5/28/16) permeates all the economic indicators of the First Quarter 2016 Social Weather Survey.

This week, SWS reports a continuation of record-high optimism that their Quality of Life (QoL) will improve in the next 12 months. In the First Quarter of 2016, 43 percent of adults expect their personal QoL to improve, whereas only 4 percent of them expect it to worsen, giving a +40 (correctly rounded) Net Personal Optimism (NPO), equaling the first-ever +40 in the Fourth Quarter of 2015.

The NPO has been Very High (+30 and up) ever since June 2014, the 16th quarter of the P-Noy administration. In the previous 15 quarters it was Very High seven times and High (from +20 to +29) eight times. Its lowest was a +24 in March 2011.

The optimism of the last six years is totally unprecedented. In the nine years of Gloria Macapagal Arroyo’s regime the NPO was Very High only once, namely +36 in June 2010, when P-Noy’s victory was being celebrated. In Joseph Estrada’s time the NPO peak was +26, in its first quarter. Fidel V. Ramos’ time had only one Very High, +33, also in its first quarter. Cory Aquino’s time had two Very Highs: +31 in May 1986 and +35 in March 1987.

The Very High personal optimism under P-Noy has been widespread geographically and by social class. In the latest survey, the NPO is +42 in the National Capital Region (NCR) as well as in the Balance of Luzon, +39 in Mindanao, and +34 in the Visayas. It is +47 in Class ABC, +41 in Class D, and +35 in Class E.

The question about personal optimism is a very standard way of starting a survey interview. SWS uses it constantly.

Since it is merely an icebreaker, and not a commissioned item, I do not break a confidence here by revealing that all of the many SWS surveys of 2016 found personal optimism Very High.

Optimism about the economy is Very High. Whether the economy will improve is a different matter from whether one’s personal QoL will improve, so it requires a separate survey question. In the First Quarter 2016 SWS survey, 35 percent expected the economy to improve, while 7 percent expected it to deteriorate, in the next 12 months. This gives a Net Economic Optimism (NEO) of +28, which we classify as Very High (+10 and up).

The NEO has been Very High for four consecutive quarters already. It has been Very High for 16 of the 23 quarters of P-Noy’s time so far. In the other seven quarters its lowest level was +2 (classified as High, for +1 to +9), in June 2014.

The scales of the NEO and NPO are different because not only Filipinos, but people everywhere, are typically much less confident about the future of their economies than about their own personal future. It is common for people to feel confident about their own futures, but  pessimistic about the economy’s future.

The economic optimism under the current administration is also unprecedented. The first time that SWS surveyed optimism about the economy was in September 1998. In 11 surveys of Estrada’s time, the NEO reached +1 twice. It was Fair (from 0 to -9) twice, it was never Mediocre (from -10 to -19); it was Low (from -20 to -29) three times, and Very Low (-30 or lower) four times; Thus economic optimism was zero or negative in 9 of the 11 quarters.

In Arroyo’s time, the NEO was Very High twice (one being in June 2010, at the very end), and High four times; so it was positive only six times. On the other hand, it was Fair seven times, Mediocre twice, Low 12 times, and Very Low nine times. Thus, economic optimism was negative in 30 quarters, or six of Arroyo’s nine years.

Under P-Noy, optimism about the economy is also widespread. The latest NEO is +31 in the Balance of Luzon, +28 in NCR, +27 in Mindanao, and +23 in the Visayas. It is +32 in Class ABC, +28 in Class D, and +27 in Class E.

Gainers now outnumber Losers, for a change. When people try to anticipate their personal future, it is common for optimists to outnumber pessimists. On the other hand, when people compare their personal QoL now to that of the past, it is common for those saying they got worse off to outnumber those saying they got better off. I think there is a natural modesty that makes people hesitate to claim a rise in status.

In 13 surveys in Cory Aquino’s time, only twice—a +2 in May 1986 and the peak of +11 in March 1987—did Gainers outnumber Losers. It never happened in the times of Ramos (26 surveys), Estrada (11 surveys), and Arroyo (42 surveys). Nor did it happen in the first 18 surveys under P-Noy. But in the last five surveys, since early 2015, Gainers have consistently dominated, which is unprecedented.

In the first quarter of 2016, Gainers were 29 percent and Losers were 26 percent—i.e., Net +3. Gainers dominated in the NCR (+8), Luzon (+7), and the Visayas (+5), but not in Mindanao (-12). They dominated in Class ABC (+28) and Class D (+4), but not in Class E (-6). Thus, the gaining is not as evenly spread as the optimism.

I don’t think the economy can be accountable for the outcome of the last election. Analysts should look elsewhere.

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