Last week’s pronouncement of the National Statistics and Coordination Board that the Philippine economy posted a 7.5-percent gross domestic product (GDP) growth rate in the second quarter, and 7.6 percent overall since the start of the year has created a euphoric atmosphere among the business sector as well as the bourse market, which for the previous week has been experiencing a bearish mood. Although the growth was a welcome development to our country’s drive for a consistent growth, we have to qualify the components of growth to determine its stability as well as our ability to sustain it.
The continued growth of the manufacturing sector and trade sector primarily supported by the strong performance from the real estate and business activities and construction has literally sustained the sectors’ growth. The services sector, which is the main driver of growth normally, is a mere surging component, meaning it lacks permanence because its outflow nature is seasonal in terms of funding. Although not explicitly stated, the biggest contributor of growth comes from election-related expenses that culminated in the second quarter of the current year. Looking at the GDP growth rate during the previous year compared to the current year, the attainment is more or less a stand-off. As what has been previously experienced, we have very cooperative consumers as what has been traditionally displayed by the consistently growing private consumption expenditures. This, however, illustrates our low saving rate as displayed by our low investment rate. Local growth achievements despite encouraging performance are mainly driven by temporary and less stable indicators that are seasonal in character unlike foreign direct investment (FDI), which has long term implications.
The growth in the manufacturing sector as complemented largely by the real estate industry may soon taper off, mainly because of urban congestion and possible market saturation. As it is, even as early as now the growth sector in that part of the industry has gradually slowed down compared to previous years.
The third quarter’s growth may soon reveal what we have been saying all along, the slowdown in economic activity as shown by the past two week’s performance. External environment is beyond our control, like the geopolitics in the Middle East plus the rather unstable world crude prices that has adversely affected the worldwide economic growth, particularly the US economic recovery. The fluctuating nature of the bourse market reflects the sentiments of investors both local and abroad.
Whatever will be the performance of the economy in the current quarter (third quarter) will show our character as an aspiring tiger economy. For whatever its worth, the forthcoming fourth quarter, traditionally is always classified as a recovery period for the economy. Characterized by increased private consumption expenditures brought about by the holiday season, the “ber” months will always be a saving grace for whatever shortcomings the economy had during the previous quarters.
It is not surprising therefore that local growth rate will be within the range of 6-percent to 7-percent rate. Regardless of the indicators of achievement, it is still an accomplishment worthy of the people’s appreciation, for after all, they are the main recipient of growth benefits.
PDAF here to stay
A banner headline read, “House scraps 2014 PDAF.” At first instance you would heave a sigh of relief, thinking that finally, corruption in its highest form will finally come to an end. But think again, it is mere transfer of jurisdiction but still under human control of whoever is in power. In more ways than one, it is a mere transfer from the right hand to the left hand. But in all fairness, the politicians from both sides of the spectrum have shown sensitivities to the grievances and disappointments of the people as regards the issues on the high level corruption (and possible conspiracy?) that have been going on for some period.
Never in our political history has there been massive convergence and expressions of disappointments of the people with regard to the performance of their elected leaders.
Whereas before the people are willing to provide them the benefit of the doubt as regards their perception of isolated corruption, but with the circumstances that were revealed and unfolded right before our very eyes, it became pretty obvious and clear as daylight that there really was massive corruption—that the country’s political arena is embroiled with some corrupt personalities in the government. And this political virus is not mere isolated but has infected and will continue to infest our political and government bureaucracy.
This newly molded perception of corruption brought about by “pork scandal” will perhaps go down in our history as one of the most if not the most damaging ascription to our political personalities and bureaucracy as a whole.
But on second thought, this change in our bureaucratic system brought about by the scandal may be providential, considering that elected officials may lose total control of the pork barrel. As such, the loss of incentive brought about by the absence of pork, will turn away candidates whose primary intention is treat his or her election as an investment with a big return by way of kickbacks. It is therefore expected that the forthcoming election in 2016 will see the emergence of candidates who are honest, competent and have the primordial aim of serving the people (hopefully).
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