The stock market collapsed by 17.4 percent on June 13 to 6114.08 index points from its 7403.65-peak hit on April 22 this year. It erased P431 billion worth of wealth as the total market value of the listed stocks declined from P2.9 trillion to just P2.47 trillion.
I expect the stock market index to fall further as only half of those who invested during the April 2013 peak were able to get out last week. My hope is that the market’s downward psychology will not spill over to the property market where real estate and condo prices are now at ridiculous highs.
Also on June 13, the peso depreciated by 5.6 percent to P43.30 per dollar from its P41 to $1 average during most of 2013.
Then came the shock of them all—unemployment surged to 7.5 percent in April 2013, down by 0.6 percentage point from 6.9 percent a year ago.
About 624,000 workers lost their job in agriculture—where most of the poor are. Minus the gain in employment in the services and industry sectors, the net number of people who lost their jobs was 21,000 workers. Overall, there were 2.805 million jobless (the 6.9 percent) in April 2012. A year later, in April 2013, that number had swelled to 3.068 million (the 7.5 percent), an increase of 263,000 jobless.
Ordinarily, in one year, the government must create at least one million jobs. During the 12-month period to April 2013, the government even destroyed jobs. Even more alarming, eight percent of those who had full time jobs became part-time workers. In effect, they are jobless too. These full time workers who became part-timers number 3.028 million.
The three adverse developments—the collapse of the stock market, the sharp depreciation of the peso, and rising joblessness stole the thunder from a robust 7.8 percent economic growth reported the first quarter and the administration’s 9-3 Senate electoral victory last May 13.
In short, President BS Aquino III has little, if any by now, to crow about when he addresses his bosses in his State of the Nation Address this July. The so-called matuwidnadaan (straight governance) is nothing but mostly vaporware or saliva.
True, BS Aquino continues to enjoy high popularity and job approval ratings. But that is mainly the creation of a friendly, what Kit Tatad calls the conscript media, and by the two friendly pollsters, Social Weather Stations and PulseAsia. About 68 percent of the people are satisfied with the BS Aquino’s administration, says SWS for the first quarter 2013.
After three years, the Bureau of Customs and the Bureau of Internal Revenue and nearly all local government units remain corrupt to the core. The other government agencies that pretend to be honest are at heart, incompetent and wasteful. Try registering your car. There are no car plates. Try dialing 117 for police help. Help won’t come.
BS Aquino has to try and work harder, assuming he indeed works hard. Nothing has changed, really.
The poor who were poor when he took office on June 30, 2010 are still mired in poverty.
In fact, the ranks of the poor have swelled by about a million Filipinos in the first three years of the BS Aquino administration, from 26.59 million in 2010 to 27.5 million this year.
Self-rated poverty this year is placed by the Social Weather Stations at 52 percent—majority of the population claim to be poor.
The jobless who were jobless when he became President are still jobless. In fact, the ranks of the jobless have even swelled.
Simply stated, the so-called robust Philippine economic growth is hollow.
Economic growth under BS Aquino does not create wealth, except for the very rich. It does not create jobs. Worse for those who have jobs, they are losing those jobs.
Economic growth has not reduced poverty incidence, which at 28-29 percent of the population has not changed in the last seven years, including the three under Aquino.
Nor has growth promoted social equity. The Philippines has one of the worst income inequality ratios in Asia. According to The Economist magazine, the whole world has halved poverty from the 1990 level. The Philippines has not.
For the average Pinoy, economic growth has not resulted in lower prices of consumer goods like your rice, galunggong, chicken and vegetables, and services like electricity, water and public transportation. The basic services, in fact, are absent, like reliable mass transit for the ordinary urban commuter.
A Cebu Pacific jet plane nosedives upon landing at Davao International Airport. Nobody comes to the rescue of the passengers for the crucial first 30 minutes—when the aircraft could have exploded and killed everybody inside. No fire trucks, no ambulances, no paramedic teams. And this in an airport that claims to be “international.” International? Duh.
The all-time-high stock market index record was 7403.65 points posted on April 22,2013. At 7403.65 points, the index had gained 27 percent from the 5832.83 index closing on Dec. 26,2012. That 5832 index closing was the 38th record high for the whole of 2012. Most of what the stock market gained in four months global developments wiped out in just 30 days.
The peso mini-devaluation can actually be good for the economy. Some ten million Filipino expats remit at least $85 billion annually. A two-peso depreciation means an additional P170 billion in purchasing power for OFW families in the Philippines. That’s more than three times what the BS Aquino government spends for its Conditional Cash Transfer program to help the poor. Filipino consumers are buying appliances, cars and condos at a frenetic pace.
OFW consumptionis the one factor fuelling economic growth, not an honest to goodness infrastructure spending by BS Aquino. True, government construction spending increased in the first quarter but that was mostly because of election spending and the construction of classrooms (yes, a class room is counted as infra).
It is the private sector—Filipino consumers and private business—that has been carrying this government. Yet, they don’t get their money’s worth in terms of an honest, reliable and efficient government service and a more modern economy.