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?
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.