“Sweet spot” is the new catch- phrase du jour, popping up with increasing frequency like so many undissolved turds in the effluvial torrent of self-serving judgment that passes for situational analysis in the Philippines these days.
In recent weeks, we’ve heard about the demographic “sweet spot”, the middle-income “sweet spot”, and the capital markets “sweet spot”, just the latest chapters in what is now a four-year-old running narrative about the country’s economic potential, and if the audience to whom this narrative is directed had any sense, they would question why, exactly, potential is still “potential” and not “reflected in current reality, at least a little” after all this time.
Of course that is expecting a lot, given that the audience in question is primarily the message’s own source. We can assume this is the case, because of that audience’s—i.e., the Aquino Administration, and the disturbingly-large contingent of media and technical observers who have willingly accepted its leader’s carefully-crafted “well-meaning doofus” image as proof of not only sincerity, but actual competence—evident article of faith that “expressed belief in something automatically turns that which is believed into an unassailable fact.”
What makes the constant cheerleading particularly maddening is that, just as there is in most myths, a thread of truth in all of it. Even if we disregard essentially meaningless indicators like GDP growth, the Philippines is in a good economic position in several narrow respects.
Stock market investors have certainly benefited in the past two years or so, and while a lot of that can be chalked up to market factors, it is undeniable that established core business sectors in the Philippines—utilities, telecoms, retail, banking and finance—are doing rather well. Remittance income remains strong, and the exchange rate of the peso, despite more-or-less constant worry about it on the part of analysts and the BSP, is actually fairly close to its nominal value. The government’s budget deficit and debt positions, while perhaps not quite as rosy as the government would like everyone to believe, are more than manageable at this point, and are backstopped by abundant gross international reserves—too abundant, in some analysts’ judgment, but even if that is the case, it is far less a worrisome issue than having too little.
Telling half a truth is still telling half a lie, though, and it’s the other side of the page that is going to lead the country to grief, and probably soon. Because while the government and its backers can legitimately recite the economic positives above, what they’d rather not mention is the effective unemployment rate that remains stuck somewhere on the north side of 25 percent, an effective poverty rate of similar magnitude, utility costs that have nearly doubled in the past four years, key infrastructure that is deteriorating as we watch (raise your hands if you were delayed on the MRT—again, for the nth time—midday Monday while the disabled train was towed off the line, which apparently is such a commonplace occurrence now it no longer rates mention by any of the media), and corruption of an astonishing scope and scale that has not been seen since the Marcos era, and maybe not even then.
Already embroiled in a tense conflict with China—largely because the current occupant of Malacañang chose to discard the less problematic pragmatic approach of his predecessor in favor of attempting to match, almost word-for-word, Chinese jingoism—the government is still fumbling with two large-scale humanitarian crises in Zamboanga and the Visayas. And while the Aquino Administration has heaped praise on itself for completing a “landmark” peace agreement with one part of the Muslim separatists in Mindanao, the first significant reaction from the very people the government just made “peace” with was the defection of four MILF commanders and as many as 4,000 of their troops due to “unwillingness to surrender their weapons and ammunition.” Consider the implications of that: What degree of confidence in the “peace agreement” is being expressed when a force roughly equivalent to an infantry brigade, a part of the organization benefitting (at the exclusion of all other stakeholders) from said agreement, feels that strongly that they will still need their weapons?
Outside the establishment press, there is a growing concern that if the Philippines is in any sort of “sweet spot” at all, it is one in which conditions are ripe for upheaval. No one knows what the tipping point will be, but we know it’s close, because the lesson of history is that no country with so stark a divergence between its strengths and weaknesses has ever managed to stay that way for very long. The problem is, even though the government (largely through wisely building on the macroeconomic framework left by the Arroyo Administration) has maintained some strong economic fundamentals that have benefitted a certain segment of the country, it has let other issues—the utility crisis, the infrastructure crisis, the shortcomings in disaster preparedness and response, food security, job creation, government ethics and procedural reliability, foreign relations, and judicial efficiency—fester for so long that if it wants to avoid upheaval from below, it must initiate the upheaval from the top by implementing drastic measures: Nationalizing exploitative utility industries, launching (and paying for) massive simultaneous public works projects, jailing hundreds of errant public officials, tearing up a fatally-defective “peace agreement” and starting over with all of the concerned stakeholders involved this time would be good places to start, but of course, the government, never having demonstrated a grasp of the meaning of “proactive,” is not likely to do any of that, or even consider it.
The only consolation in all of this is once the current autocracy is removed from power—in two years if by fair means, sooner if by foul—it will have at least left the country in a marginally-better economic position than it was at the end of the last dictatorship, or at the end of the term of the hapless representative of the aristocracy who replaced it. That’s not enough to be praiseworthy, but at least it is a glimmer of hope, however faint, for the future of a great population whose real welfare has been forgotten for too long.