ANALYSTS and economists are gung-ho over the GDP numbers of 2014, prompting a UP assistant professor of economics to quip: Of course, there is vested interest behind their optimism because the business they represent would benefit from such enthusiasm.
If you talk to an economist who works for a bank, it’s easy to see the color of his or her sentiment. The better the economy, the more clients would be encouraged to take out loans.
The stock market analyst is easier to catch. The better the economy, the more clients would be encouraged to put their hard-earned money in equity despite the obvious risks involved.
By the numbers alone we can agree. Yes, there is a bit of cause to cheer over the fact that 6.1 percent for the whole of 2014 is better than the 5.7 percent-to-6 percent range analysts had expected for the period.
But then again, the economy as measured by the GDP grew by 7.2 percent in 2013. That means, compared with 6.1 percent for 2014, output actually shrank by more than 15 percentage points.
Now, if that isn’t a cause for glum…
We know the basis for growth or slower growth seems flimsy as in remittances, BPO receipts and, of course, lower oil prices.
The real fundamentals, like industry and agriculture, are not stable enough, as everyone knows because of the impact of frequent typhoons and other calamities that hit this country every year.
It is not hard to understand why analysts and economists, not to mention government officials, always try to paint a rosy picture of the economy.
But there must be something they know that we ordinary Juan and Juana dela Cruzes don’t know.
What is obvious, according to a contrarian view, is that they are actually trying to get people to spend more money and foster a self-fulfilling prophecy of a rosy Philippine economy. In other words, they are in a state of denial.
Everything, but everything is going well for the 100 million or so Filipinos, and it doesn’t matter if 18 percent of us are going hungry.
Yes, construction grew at 8.5 percent. Thanks much to private sector spending, which rose 12.9 percent, because public spending actually diminished by 1.5 percent, as UP economics professor Benjamin Diokno pointed out.
What this all means is that the Aquino administration is failing where it counts: by supporting the economy through government spending.
And what it also means is that the government missed even the lower end of its 6.5 percent-to-7.5 percent growth target for 2014.
What is telling in all this is that there is yet no inclusive growth to speak of and that tedious and monotonous as it may read: the rich are only getting richer and, alas, the poor only poorer.
To borrow a passage from Bird Talk, a publication of think tank IBON foundation:
“The steady unraveling of the hyped Philippine economic miracle in 2014 weakens the Aquino administration even on its acclaimed economic front. The slowing of growth after just two years of a relatively rapid pace draws attention to the economy’s still unsound fundamentals.
“Severe inequities still stifle it and there is still no solid base in domestic production, incomes and demand.
“Unemployment and poverty persist because government policies avoid the politically difficult but nonetheless necessary structural changes. Slowing growth and these other problems will continue through 2015 and, absent the necessary radical change in the country’s politics, carry over into the next administration.”
2016 is just around the corner. Our prayer is that the Filipino people will come to their senses. It is not a question of putting in power the next Chief Executive whose vested interests are quite obvious.
Until a real and credible leader comes to the fore, all we can really say is that prayer helps.