• How great are PH 7.8% growth and No. 38 competitiveness?

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    Good news and bad news on the Philippines.

    First the good news:

    The country posted an economic growth rate of 7.8 percent in the first quarter, the highest in Asia for the period and the highest under the administration of President Benigno Simeon Cojuangco Aquino III.

    Another good news: The Philippines saw its competitiveness ranking improve by five rungs in 2013, from No. 43 in 2012 to No. 38.

    Now the bad news.

    The Philippines already did 8.4 percent quarterly growth in the first quarter of 2010, under the much hated President Gloria Macapagal Arroyo. She did it even while being accused of massive corruption. That 8.4 percent was no fluke. Arroyo followed that up with an even higher growth rate—8.9 percent in the second quarter of 2010—in her last three months in office. That is the best quarterly economic growth ever in a generation.

    The Philippines was already No. 38 in competitiveness in 2000 under another much maligned President, Joseph Ejercito Estrada. He did it while being accused of corruption. (He was facing an impeachment trial). He was ousted January of the following year even after scoring the best competitiveness ranking for the Philippines in more than a decade.

    Ironically, this year, one of the reasons cited why the Philippines supposedly improved both its economic growth and its competitiveness is: We have a honest President, BS Aquino.

    But two supposedly dishonest presidents scored much better than Aquino—Arroyo on record quarterly economic growth and Estrada on the best global competitiveness ranking of the Philippines ever.

    Quarterly growth under Arroyo was 8.4% in the first quarter of 2010—0.6 percentage points higher than Aquino’s highest so far of 7.8%. If an honest president (Aquino) can achieve 7.8% quarterly growth rate, how come a dishonest president (Arroyo) can do better at 8.4%?

    In fact, under a supposedly dishonest President, the Philippine economy had done much better. President Arroyo saved the Philippines from a crippling global recession in 2008 with an 1.1 [ercemt economic growth in 2009—one of only four countries in the world able to score positive growth following the worst slowdown in 80 years. The much despised President followed that up with a sterling 8.4 percent first quarter growth and 8.9 percent second quarter growth in 2010 for an unprecedented 8.65 percent semestral growth in the first half of 2010—when nobody was paying attention to her anymore.

    Economic Planning Secretary Arsenio Balisacan points out that in two years under President Aquino, per capita income increased by 11 percent. That’s an average per capita income increase of 5.5 percent per year.

    “Per capita GDP grew by 6.1 percent in the first quarter of 2013, faster than the 4.7 percent growth a year ago. This means that from the first quarter of 2011 to the first quarter of 2013, per capita GDP has increased by 11%, in real terms,” Balisacan told newsmen in his briefing on the economy.

    Note, however, that under President Arroyo, per capita gross national income, at current prices, increased from $1, 346 in 2004 to $2,872 in 2010, a period of seven years. That’s an increase of 113.3 percent in seven years or an average gain of 16.19 percent PER YEAR, despite a surge in population of about 15 million more Filipinos.

    Per capita GNI (at constant prices) increased from $1,425 in 2004 to $1,848 in 2010, a jump of 29.68 percent in seven years or 4.2 percent per year but that was because global recession ensued in 2008 and the economic challenges were much more daunting than today.

    The whole year growth of 7.6 percent in 2010 could have been higher but growth rate slowed down as soon as Aquino took over as President—to 7.3 percent in the third quarter and 6.1 percent in the fourth. The slowdown would continue in the following months.

    That 7.6 percent growth in 2010 can clearly be credited to Arroyo because a full year after President Aquino took over, growth slumped to just 3.9 percent in 2011, derailing the economy’s upward momentum. Why did the economy slow down in 2011? One simple reason: Aquino refused to spend P147 billion of infra money for fear it would be stolen.

    If an honest President can achieve No. 38 competitiveness ranking how can a supposedly dishonest President (Estrada) can achieve the same No. 38 ranking?

    Performance matters
    The only conclusion one can make from these two paradoxes: There is little relationship between honesty in governance and economic growth, no relationship between honesty in governance and improvement in a country’s competitiveness.

    What moves the economy and what improves competitiveness is only one factor— performance and delivery of basic services.

    If a President delivers basic services—like adequate food, adequate infra (have you ever taken the LRT or MRT? You should and you will realize how angry you are with the bad service), honest point-of-sale service by civil servants (have you ever tried dealing with the Bureau of Customs You should. You will realize how corrupt it is under Aquino)—jobs will be created, poverty will be reduced, and the economy modernizes.

    In the first 30 months of the Aquino administration, job losses have been remarkably large and unemployment has not improved. In the first 30 months of the Aquino administration, poverty incidence has not changed at all. In fact, income disparity worsened. Social inequity worsened.

    Like Mayon, the Philippines can erupt anytime. The discontent of the poor and the jobless simmers each passing day. The dispossessed will one day spill into the streets now matter how straight or narrow they are—if nothing drastic is done to improve their lot.

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    13 Comments

    1. Perhaps the math may be suspect, but take this with a grain of salt, countrymen. Anger is blinding while the truth may set you free. I see so many people who have been so incited against past administrations as to be blind against their accomplishments and to the failings of the present. I have seen so many people disenfranchised with the constant decline of our culture as to be blind to the sins of the past and so forget about them, constantly looking back to them as the ‘good old days.’

      As I see it, the main point is that our President is underperforming and that his integrity is a smoke screen. For what, I can only imagine. Get educated. Vote better, for the country’s sake. And know an agent of the oligarchy when you see one.

    2. Jerry Ocampo on

      It’s totally distressing how the truth is twisted right under our very noses. And people swallow Malacanang’s line without much thinking.

    3. Incoming Student on

      Poor analysis by the writer.

      In 2000, PH’s was no. 38 in competitiveness index and it fell and fell during GMA administration. We may be ranking high that time, because a syou can remember, during 1995-96 period, PH was tagged as Tiger economy of Asia, which was highlighted during the1996 APEC summit. Then it fell and fell and fell going to Erap and GMA’s admin.

      Economic growth during 2009-2010 period is attributed to government spending on infrastructure (where around billions of pesos were stolen by GMA and cronies) plus remittances and influx of BPOs who decided to outsource their businesses to countries like PH as a cost cutting strategy brought by the crisis. Plus election spending also, where GMA and cronies pocketed a lot of money also.

      So whatever Erap and GMA’s acheivements were, they are not solely responsible for them. Different situations dictate those figures.

      One thing though is that during Erap and GMA’s terms, the countries competitiveness index is on a decline, and that cirruption is becoming more prevalent.

    4. Good article, poor arithmetic. Percentage growth is compound, so simply dividing 113.3 by 7 gives too high a figure.

    5. well,

      its harder to maintain growth and bring it to the higher level than to just grow from trash status. anyways, i strongly believe in today’s government. Goodluck to the philippines!

    6. blah blah blah. The world was recovering from the slump. In the States, the DJIA went from 7500 in 2009 to 12000 in 2010. Of course, following the world economic trend, that was a big jump that the Philippine economy also benefited from.

      Quit making bad of Aquino when international businesses are giving the Philippines under his leadership a serious thought about investing more.

      Quit your B.S.!

      REPLY: this is a mystery. Ms. Rosamare is commenting on a 2013 article of Tony Lopez. He has long left The Times. How did this article come to Ms. Rosemarie’s attention today two years after it got published?

    7. Rosauro Feliciano on

      This is an argumentation in the form of truth. For how can we expect the nation to move forward when ALL past administrations are responsible for our being known as the most corrupt country on earth? Can we expect a place inundated with rain water to be dried so suddenly when the sun rises? The ill of the nation was ( and still is) so severe that even the lowest employee of the government was tainted with the disease; such cancerous sickness was spreading like wild fire among the young generation. Only those who were in company with the corrupt government administrations of the past can attest that the life of the ordinary citizen who made the streets as their dwelling places, the esteros and the pasig river as their garbage areas, was better than the honest incumbent administration. Those are the kind of people who want to brain wash to people into believing that it is better to be under corrupt administration than an administration that is doing its best to correct the mismanagement of the government of the many past administrations. All the ills of this nation inherited from 1946 onward cannot be solved in six years; those who say otherwise, they are indeed tarantado sirang ulo.

    8. The reason why the corrupt Arroyo govt attained 8.4 and 8.9 % was because of 2010 election, she spent large amount of govt money from no no projects to election related projects including her own district in PAMPANGA and other party mates districts and provinces.. Govt occured big deficits despite selling large govt assets whichh should have not been in the first place because national govt at that time already borrowing spree left issuing treasury bonds locally and bonds globally .Even with such selling of govt assets the deficit was still hit over 3% of GDP .The reckless projects such as the corrupt laden Railway Project Manila to Clark funded by the Chinese Govt , that became a white elephant project..There are so many more of these projects we considered below ethical standard because of corruptions..We call this an achievement under your favorite former President , !!!

    9. In this report only the percentage show but not the integrity of the investors.

      I think the economic growth for the Former Pres. Gloria Arroyo governance is because most investor are illegal but Pres. Aquino administration only legal investor can put up business here in the Philippines so the difference between them is there are more illegal investors during Former Pres. Gloria Arroyo and it’s only stop when the time of Pres. Aquino.

    10. Voice from the Wilderness on

      This is a good analysis insofar as dampening the misplaced enthusiasm foisted on many of the naive general public’s mind by the barrage of propaganda press releases from the miscommunication group of palace factotums citing a direct correlation between alleged honest governance and perceived increase in economic performance of the country.

      • Ado Paglinawan on

        If we did not have good financial fundamentals, our economy would already be collapsing under the sheer weight of the incompetence of the village idiot in Malacanang.

        We need just a hint of leadership from him, not a lot of hot air.

    11. Your are correct Mr. Lopez, it is competence, knowledge, hard-work and leadership which counts. What will an honest man do without the aforementioned?