THE much-anticipated four-day summit of the Asia-Pacific Economic Cooperation (APEC) group of 21 nations begins here in Manila in exactly a week. Nineteen heads of state have confirmed their attendance – 20, if you count the one who passes for the head of this state – and based on the statements being issued about it on a daily basis by the government, the residents and workers of Metro Manila can expect the event to be a calamity as disruptive as a major typhoon.
Major thoroughfares will be closed to traffic and entire sections of the metropolis rendered inaccessible. Communications will be interrupted, financial markets, banks, government offices, and many businesses will be closed, and hundreds of thousands of students and workers will be forced to take an unscheduled vacation – fun, if you’re a kid, but a rather painful kick in the ass for anyone to whom sacrificing 75 percent of a week’s wages for the sake of allowing a drooling idiot the chance to dress up like an adult around his professional and intellectual superiors seems like a bad idea.
A couple of weeks ago, PSE president Hans Sicat implored the government to modify its holiday declaration for APEC summit week to allow financial clearing operations on at least two of the four days, out of concern for the negative impact an unusual extended holiday would have on the market and the economy in general. Sicat’s point, which earned a tepid response from the Administration, raised an interesting question: Is it possible to actually quantify the economic cost of the APEC summit?
As it turns out, yes it is. In this year’s national budget, P4.6 billion was earmarked for the costs of preparing for and hosting the APEC summit; a couple of sources have said the price tag will actually be much higher when everything is said and done, but having no concrete data on that, we’ll stick with the P4.6 billion figure. While that government spending will be reflected in the fourth quarter’s GDP as a positive, we can consider it an actual ‘cost’ to the economy because without the APEC carnival, it would presumably be spent on something a bit more useful.
That is not the only cost, however; the loss of business during the four-day summit must also be taken into account. As of the end of 2014, data from the Philippine Statistics Authority showed that Metro Manila accounts for 36.3 percent of the national GDP. The reduction in economic output during the summit is something that has to be assumed (we will have to wait for the release of Q4 economic data next February to check the assumption), but the consensus among a number of competent observers to whom I posed the question is that economic activity in the NCR will decrease by about 20 percent during the APEC meet. In peso terms, that reduction amounts to just over P10.6 billion; in percentage terms, it represents about 0.08 percent of the national GDP for the year. Add to that the P4.6 billion the government is flushing away to host the event, and we arrive at a total cost to the Philippines of about P15.2 billion, or about $225.82 million at current exchange rates.
In September 2009, Metro Manila was pounded by rains from tropical storm Ondoy, suffering widespread flooding as a result. The official estimate of the cost of storm damage was P10.45 billion, which at the exchange rate prevailing at the time, about P48 to $1, was equal to $217.6 million.
It turns out comparing the impact of the APEC summit to a major typhoon is not hyperbole after all. Will it be worth it? Most people would be hard-pressed to describe the purpose of APEC, let alone identify how this particular supranational grouping has directly benefited their daily lives. Even those of us who understand it—for the layman, APEC is an occasional gathering of Pacific Rim nations, held for the purpose of expressing aspirations about free trade in order to give business and political reporters something to talk about for a few days—are not expecting much better than another one of those pictures of Noynoy Aquino fumbling his pose in the leaders’ end-of-conference family portrait.