LOCAL slowdown, debt crisis in Europe, joblessness standstill in America, and fear of global recession.

That is the prospect Filipinos are facing this year and well into the first half of 2912.

Ordinarily, the Philippines shouldn’t be affected much by the so-called global debt, financial and economic turmoil. The country is much too big an economy as to be adversely affected by external factors.

Firstly, the economy is huge domestically—95 million people, the 12th largest consumer market on earth.

Secondly, Filipinos have plenty of money. Per capita GNI (Gross National Income) is $2,829—the highest ever in our history. Multiply that by 95 million and you have a $269 billion economy, the 44th largest among 192 countries.

Thirdly, Filipino expats remit at least $20 billion a year, equivalent to P860 billion, half of the government’s national budget and almost 10 percent of our GDP of more than P9 trillion.

Most of the $20 billion is stranded—meaning it doesn’t go to productive uses. According to Bansan Choa of I-Remit, the $20 billion represents only a third of the actual annual earnings of Filipino expats. Our OFWs make $60 billion a year—enough to pay our foreign debts—in one, single voucher. Petty cash, in other words.

Fourthly, the savings rate of Filipinos has exceeded 27 percent—that is, 27 percent of P9 trillion, or P2.4 trillion, which is 40 percent more money than the government can assemble for its national budget.

Fifthly, the Philippine commercial banking system has P5 trillion in deposits. Only about P3 trillion has been ploughed back into the economy as loans. Most the remaining P2 trillion is parked, at the Bangko Sentral because a government IOU is better than any tripled rated IOU of any Tomas, Dikyo and Harry.

Thus, only a really stupid government economist can bring the Philippine economy down. In fact, in the global recession of 2009, when two-thirds of the world was ravaged by recession, the Philippine economy managed to grow, by 1.1 percent—one of only four Asian countries to do so.

Massive slowdown is exactly what happened in the second quarter of 2011. Growth was almost a total slump—by a magnificent 0.6 percent—a little more than half a percent, based on quarter to quarter growth—from the first quarter 2011 to the second quarter 2011.

The 0.6 percent quarter-to-quarter growth is the slowest in 15 years.

In the first quarter 2011, the quarter-to-quarter growth was 1.9 percent. By the second quarter, the growth rate was reduced by two-thirds.

Year-on-year (that is comparing the second quarter of 2011 to the second quarter of 2010) the GDP growth was 3.4 percent.

I use the quarter-to-quarter growth rate because it provides a more meaningful analysis of how the economy is doing under Aquino.

Under the first 12 months (July 1, 2010 to June 30, 2011) of the Matuwid na Daan President, the economy grew by just 1.2 percent—quarter to quarter—not by 8.4 percent annual rate as was claimed in 2010; not by 4.9 percent annual rate as was claimed in the first quarter of 4.9 percent, and by the 3.4 percent annual rate in the second quarter.

Why the slowdown amid the strong fundamentals? It was self-inflicted. The government refused to spend P140 billion of taxpayers’ money, according to economist Solita Monsod, writing for the Philippine Daily Inquirer. The money would have gone into what is called public construction—for roads, highways, bridges and other infra.

Why did the government refuse to spend that money? Well, I think fear of corruption.

The Public Works people didn’t trust the contractors. They thought the latter are thieves. Well, they are, but at least they do something concrete—like roads and highways. And in the course of time, those roads and highways, though overpriced, will readily pay for themselves because of their tremendous economic benefits. They modernize our infra and make the economy more efficient. Construction also is a big job generator. Housing construction alone supports 18 ancillary industries.

The second reason government refused to spend is a fixation with so-called fiscal responsibility, meaning, the administration needed to balance the budget to get a credit rating upgrade.

The government got the upgrade. An upgrade, however, is equivalent to a reduction in interest rate of 1 percent on some P2 trillion in debts. The savings is about P20 billion.

But the economy declined by 1.3 percent—from 1.9 percent in January-March 2011, quarter-to-quarter, to 0.6 percent in April-June 2011. Multiply the 1.3 percent by the size of the economy, P9 trillion, and you get P117 billion—the amount of value of goods and services that should have been generated by a more aggressive government spending. And how many jobs would that kind of growth have generated?

They say that you need seven percent GDP growth to generate 2 million new jobs a year. A 1.3-percent slowdown thus could have meant 371,285 new jobs missed.

Obviously, the arithmetic of government planners looks bad. The amount of P117 billion is certainly much bigger than P20 billion. Who is to blame then? President Aquino is an economist.

This e-mail address is being protected from spambots. You need JavaScript enabled to view it.