President Benigno Aquino 3rd highlighted the country’s economic progress in his last State of the Nation Address (SONA), stressing that reforms under his administration have paved the way toward a stronger and more competitive Philippine economy.
In his speech before the members of Congress on Monday, Aquino discussed the various developments in the country during his term, particularly gross domestic product (GDP) growth, finances, competitiveness, investments, the manufacturing sector, labor force and social services.
The President noted that since the start of his leadership in 2010, the country has recorded an average GDP growth of 6.2 percent–the fastest average growth period in 40 years.
“If we reach 6.8 percent in 2015, then we will have posted the fastest six-year average growth period in almost six decades,” he said.
In terms of finances, Aquino said in that in the first five years of his administration, dividends from government-owned and -controlled corporations reached P131.86 billion compared to the P84.18 billion during the nine-and-a-half years of the previous administration.
In tax collections, the Chief Executive lauded the Bureau of Internal Revenue (BIR) for its
sustained tax collections from 2012 to 2014.
Aquino said that from P778 billion in 2008, tax revenues of the BIR last year reached P1.3 trillion. This year, the bureau is tasked to collect about P1.5 trillion.
“We did this without imposing new taxes, as promised, apart from sin tax reform,” he said.
“For the first time in history, we are unanimously deemed investment-grade by the most prominent credit rating agencies,” he added.
The President noted that foreign direct investments in the country reached a record high of $6.2 billion in 2014 from $1.07 billion in 2010.
“Domestic investments are also impressive,” he said, noting that since 2010, the amount invested by Filipinos in the country reached P2.09 trillion.
In terms of manufacturing sector, Aquino stressed that the sector’s average growth of 3 percent in 2001 to 2009 rose to 8 percent from 2010 to 2014.
“Now, investors are bringing in factories that produce high-tech equipments from aircraft components to medical devices,” he continued.
Commenting on the labor force, the Chief Executive said that every year, about 80,000 new entrants are joining the country’s labor force.
“Consider the fact that there are reports of overseas Filipinos returning home,” he said.
In 2011, Aquino said that there were 9.51 million overseas Filipinos but estimates as of December 2014 showed that the number of these Filipinos declined to 9.07 million.
The unemployment rate declined to 6.8 percent last year, the lowest recorded in a decade, he added.
“Let me be clear: We created permanent jobs; we did not hire an abundance of street sweepers during the survey period,” he said.
“We cannot wait for the benefits of growth to trickle down to the poorest Filipinos. Puro commitment: inclusive growth,” he stated.
Lastly, the President said that the agenda of his administration were assistance, knowledge, skills training and health.
Aquino said that among the government’s mechanisms is the Pantawid Pamilyang Pilipino Program or 4Ps, which has now over 4.4 million beneficiaries.
Failing to maximize potential
Reacting to Aquino’s speech, an analyst said that just like most SONAs, it was a showcase of strengths and downplaying of weaknesses.
“There was a lot of comparison with the previous administration but perhaps the better measure would have been to measure his performance against potential, which this administration failed to maximize,” Nicholas Antonio Mapa, associate economist at the Bank of the Philippine Islands told The Manila Times.
“Nothing truly compelling in this SONA. Expect more campaigning in the coming months,” he added.
Despite this, Mapa said he believes that the Aquino administration will be turning over fewer problems to the next administration.
The analyst noted that, in particular, there have been strides in the education sector although the rest of the overall brick and mortar infrastructure is decrepit.
“He will be turning over an economy in great shape, but I would be wary to give a lot of credit to the administration for the gains we’ve seen,” he said, stressing that demographic dividend and depressed global interest rates and commodity prices have been instrumental in bolstering the country’s growth trajectory.
“The next President inherits an economy built for the times as low inflation and low domestic rates will help the Philippines carry on its current pace of expansion,” he concluded.