ON the one hand, there is cause for celebration. With economic growth up by 6.9 percent, the Philippines has the fastest expanding economy in Asia. On the other hand, inflation has reached a three-year high and families are being squeezed by soaring food and fuel prices.
Understandably, President Duterte’s economic team is in a buoyant mood. “That’s spectacular growth after an election year,” said Socio-economic Planning Secretary Ernesto Pernia. Despite “terrorist activity in Marawi” and “political noise,” reflected Carlos Dominguez 3rd, the finance Secretary, “the economy managed to perform well.” Nestor Espenilla, Jr., governor of the Bangko Sentral ng Pilipinas (BSP), also sounded satisfied. “The strong 3rd quarter GDP growth, together with manageable inflation, are in line with our expectations and validate current policy settings,” he said. These days, economists are the country’s foremost, and most voluble, optimists.
The World Bank predicts that, at least until 2019, things will continue looking up, if all goes according to plan. Hope-filled economists are basing their judgments on three key factors. First, the President’s major infrastructure project, the much touted “Build, build, build” program of cross-country railway and highway networks, in large part to be financed by loans from China and Japan to the tune of $180 billion, will provide a massive boost to the already strong services sector. Second, consumer spending, which makes up 70 percent of GDP, remains high thanks to over $50 billion of remittances and outsourcing revenues. And third, the Philippine population is young and growing.
Could it be that the Philippines will finally go the way of Vietnam, which dramatically reduced its poverty rate from 58 percent to 29 percent between 1993 and 2002 due to rapid and sustained economic growth?
In a recent United Nations Development Program-Asean-China report, it was estimated that Filipinos, along with Indonesians, constitute 90 percent of the 36 million Southeast Asians living below the international poverty line. Over 26 million Filipinos are poor, with almost half that number unable to feed themselves. One in three Filipino children under five years of age suffer from chronic malnutrition and stunting, and there are more malnourished babies than ever. This rate does not look as if it will go down any time soon.
Over the past few months, the cost of food accelerated. Staples such as fish, vegetables, cereals, flour, bread, pasta, corn, oils and fats, rose in price by 3.6 percent. Inflation also hit water, electricity, gas, and other fuels, which saw prices double. The cost of clothing and footwear also showed marked increases. Espenilla, however, remained confident that inflation was at a “manageable” level.
I doubt the BSP governor’s thinking would cut much ice with my friend Annabel, whose family just manages to scrape by. She tells me about her food expenses each month. “We spend almost P8,000 (about $156) on food alone, including packed lunch for the kids,” she says. It is a sizeable chunk of their slender income.
Annabel lives in Cavite with her family and is luckier than some. Her two children, the youngest of whom is six years old, regularly attend school. Her husband earns a living as a laborer in one of the many subdivisions being constructed in Cavite. They augment their food by growing sweet potato in a small plot of land near their home. Annabel is smart, energetic and pragmatic. She takes on domestic work, in addition to looking after the children, and volunteering at her children’s school. The family benefits from the conditional cash transfer program instituted by former President Benigno Aquino 3rd, a crucial safety net that keeps the family from going over the edge.
The Christmas budget will be tough, as usual, but the family is looking forward to tucking into spaghetti with meat and tomato sauce, which they will eat with bread. It’s not a big deal, she knows, but for the kids, who eat mostly rice, and make do with a bit of dried fish or an egg for baon, it will break the tedious monotony of everyday food. “It will do for us, sapat na sa amin”.
For New Year, she’ll take a leaf from the Chinese playbook of superstitions, and eat the food that most attracts luck and prosperity. About P1,000 (just under $20) can be made to go a long way. Like many of her neighbors, she’ll be serving up a platter of pancit with chicken, or, better still, pork, convinced that a mountain of uncut noodles sends heaven a wish for long life. There will be peanut butter sandwiches, as well as some filled with Cheez Whiz, that viscous, orange-hued processed cheese spooned out of a jar. Fruit, sorely lacking in the daily diet of both kids and adults in general, and round-shaped fruit in particular, for good fortune, is the super special treat. I’m guessing one or two imported American red apples, polished to a high sheen, that are to be found exorbitantly priced in public markets all over the country, will be the stars of the dinner table.
There are those who are timidly sounding a note of caution, amid all the cheering and mutual back-patting. Pernia, for instance, cites how a weakened peso, raised domestic fuel prices, and a minimum wage hike, won’t help check inflation. He may like to look on the positive side, but, mercifully, Pernia is not a man under any illusions.
There’s no denying how other factors are giving foreign investors the jitters. Some mutter about the President’s “erratic policy-making,” or brutal, unrelenting drug war, in which, at least by some counts, 13,000 of the country’s poorest people have been killed.
What does 6.9 percent economic growth mean for ordinary people? If you’re able to survive month after month, without dying of hunger or falling ill, and manage to stay alive long enough to see the New Year, it means further belt-tightening.