THE announcement yesterday that the country’s GDP grew by 6.3 percent in the fourth quarter came as a pleasant surprise, and could be considered generally good news. The consensus of most analysts before the data were released was that growth in the last quarter would be rather modest, about 5.8 percent; the actual results exceeded expectations, and thus, are a positive outcome.
Nevertheless, there are definite signs that our economy, while certainly not in bad shape, at least in the context in which national economies are compared with one another, is facing risks that are starting to have a negative impact. And in this sense, the government – both the one that we must still tolerate for another five months, and the one that will replace it – should be reminded that in the wake of the positive Q4 result, a strategy to deal with rapidly dimming economic prospects is far more important than a strategy to broadcast self-congratulations for having “one of the best economies in Asia.”
The first indicator that should cause some concern is the modest quarter-to-quarter increase in the growth rate from the third quarter of last year to the fourth quarter. In a typical year, the difference, thanks to holiday spending, is usually close to one percent, if not more (the Q3-to-Q4 acceleration was 1.1 percent in 2014). For 2015, however, the gain was a paltry 0.2 percent (6.3 percent versus 6.1 percent in the third quarter). That indicates muted economic activity.
Another factor that is somewhat alarming is the steady deceleration of the full-year GDP growth rate: From 7.2 percent in 2013, growth slipped to 6.1 percent in 2014, to just 5.8 percent for the full year 2015. The economy is still growing, but it is growing at a progressively slower rate – which, coincidentally, is exactly the same sort of problem that is being experienced by China’s economy, and which is obviously something that is regarded by the rest of the world as a serious economic problem.
To be clear, the Philippine economy does deserve much of its reputation as a good performer. But there are signs that have become apparent over an extended period of time that the economy is slowly losing its resilience. The time to act on that with effective spending, and measures to encourage capital investment and job creation is now, before the economy’s strengths are eroded.
At this point, we are not confident any of the aspirants for the presidency have properly considered this. The Aquino Administration certainly has not, otherwise the alarming trend shown by the macroeconomic data would not be happening in the first place. We cannot afford another six years of on-the-job training for the nation’s President and his or her Cabinet when it comes to the economy. Letting the current reasonably good condition of the economy decline further would be taking an even bigger step backward.