• 7.8% GDP growth: Nothing to crow about

    0

    Atty. Dodo Dulay

    For Malacañang, the recent National Statistics Coordination Board (NSCB) report that the country’s GDP grew by 7.8 percent for the first quarter of 2013, outperforming even that of economic giant China, signifies strong investor confidence in the Philippine economy.

    But a recent World Bank (WB) report debunks the rosy economic picture being painted by the Palace.

    In its May 2013 Philippine Economic Update, the WB said the country’s job-generating foreign direct investment (FDI) “continues to lag behind other countries in the region. At USD2 billion in 2012, FDI inflows to the Philippines are among the lowest among the original ASEAN countries . . . Investors continue to cite the lack of infrastructure, high cost of doing business, and corruption as primary reasons for not investing in the Philippines.”

    Moreover, despite the country’s higher economic growth, the WB report said that poverty incidence hardly declined from 28.6 percent in 2009 to 27.9 percent in 2012, suggesting that gains from higher growth is not benefiting the poorest Filipinos.

    As of end-2012, the WB report said that there are almost 10 million unemployed or underemployed Filipinos, with another 1.1 million people entering the labor force each year from 2013 to 2016.

    Compounding the country’s employment woes, a recent survey estimates that net job generation declined by almost 50 percent to 606,000 jobs from 1.1 million jobs a year ago.

    “In recent years, net job creation has fallen short of the increase in the working age population indicating that [PH’s] economy remains hard pressed to provide good jobs to majority of Filipinos,” the WB report also said. In short, we are not creating jobs fast enough to absorb the 1.1 million workers joining the job market each year.

    The WB report said the lack of jobs has resulted in high unemployment and underemployment rates and a higher number of “discouraged workers” or those who have stopped searching for work because they are tired of looking for work or believe that no work is available.

    The Philippines also has the highest share of food expenditure to total consumption (around 36 percent) compared to our Asian neighbors. This means food expenses now comprise more than a third of a Filipino worker’s total purchases of goods and services. That’s because Filipino workers are actually bringing home less money each year because the increases in inflation actually cancel out the increases in their salary.

    With such dire numbers, isn’t the Palace chest thumping a bit too early and too much?

    Telecoms game-changer
    The pioneering network-sharing agreement between media behemoth ABS-CBN and Globe Telecom promises to reshape the Philippine telecoms industry by ushering in the so-called “media convergence”.

    With media convergence, ABS-CBN can deliver creative content such as news, music, and movies to any mobile device—from smartphones to tablets—through Globe’s broadband and wireless networks.

    The media conglomerate will launch an “ABS-CBN mobile SIM” that will offer the usual telco services plus exclusive content from the country’s largest television network. Like any mobile user, subscribers using the ABS-CBN mobile SIM will be able to send texts, make calls, and surf the Internet, making the Lopez-led multimedia provider, in essence, a third player in the telecoms industry.

    Moreover, this strategic alliance between ABS-CBN and Globe reflects the development of an innovative business model aimed at generating a new revenue stream from the growing consumer appetite for “on-demand” content.

    For Globe Telecom CEO Ernest Cu, the partnership will see ABS-CBN capitalize on its strength in creating and delivering content, while riding on the Globe Telecom backbone. This will enable Globe to establish a new market for mobile users while generating a wider audience base for ABS-CBN.

    “Globe is once again at the forefront of a pioneering effort. We entered this partnership to provide Filipinos with more reasons to enjoy their mobile phones. The exclusive content that ABS CBN will provide ushers in a new form of entertainment for mobile users in the Philippines,” Cu explained.

    “We are now seeing the gains of our network modernization and IT transformation initiatives, having new capabilities to enter into these businesses to showcase our strength and leadership,” Cu added, referring to the Ayala-led telco’s US$700-million network upgrade that replaced old cell sites nationwide with state-of-the-art equipment.

    As of last month, more than two-thirds of Globe’s cell sites are already running on the high-speed 4G HSPA+ technology. And anticipating higher traffic from mobile browsing and data usage, Globe has already laid down over 6,000 kilometers of additional in-land fiber optic cables.

    Globe is well-equipped to spearhead this media convergence especially after it obtained the thumbs-up from the National Telecommunications Commission to use the frequencies in the 1800 MHz band formerly assigned to Bayantel—the Lopez Group telco acquired by Globe last April.

    So where does this leave GMA-7 and other TV networks in the convergence trend?

    Share.