CAN you blame Philippine economic managers for making incredulous predictions about economic growth and then falling flat on their faces for being wrong when the actual numbers come in?
Take Agriculture Secretary Emmanuel Piñol, for instance, who unabashedly gave a fearless forecast during a press conference last November that agriculture output would grow by 4 percent in the fourth quarter of 2016 because of a bumper crop. The basis of his prescient optimism—and he was being honest more than coy with reporters on this—was his visual assessment from the field that crop yields would, indeed, fare much better than in previous quarters. Of course, he was wrong.
“Agriculture declined further by 1.1 percent. In the same period of the previous year, it dropped by 0.2 percent,” National Statistician Lisa Grace Bersales said in a statement issued along with the National Accounts report that was released by her office late last week.
Even Economic Planning Secretary Ernesto Pernia in his crystal ball-gazing as early as two weeks before the Philippine Statistics Authority released the official numbers, was off the mark when he said gross domestic product (GDP), which measures economic growth in a given period, expanded by 6.8 to 7 percent in October to December. He even threw in a teaser: “I hope it’s 7 percent.”
For the record, based on official preliminary figures, the economy posted 6.6 percent GDP growth in the fourth quarter of 2016 and 6.8 percent for the whole of 2016.
Now, the real issue here is not about being right or wrong, but that the economic managers —all of them—must take a higher moral ground as appointed Cabinet officials in charge of the economic welfare of a nation of 103.9 million people by not raising false hopes that in the end government cannot deliver.
There is still, however, time to change their tack, especially in steering the economy and achieving promises of lifting people out of poverty, if not totally eradicating it.
And before taking full credit for the economic growth of the fourth quarter, albeit at a slower pace, and the full-year 2016, the economic managers must bear in mind what HSBC Global Research correctly pointed out.
“Despite the softer year-on-year print compared to the third quarter, economic momentum in the Philippines actually accelerated. Recall that in the second half of 2015, government expenditure had already started to increase sharply as the Aquino administration resolved some of the issues that had disrupted infrastructure spending plans in the preceding years,” the research arm of HSBC said.
“This momentum has been sustained since then, although on year-on-year terms, the numbers are less staggering. Still, the 15 percent year-on-year increase in investment is impressive and, of course, necessary if the government is to achieve its longer-term development goals,” according to the global lender.
Its prescription for achieving high-middle income status by 2040— like Singapore, Malaysia and South Korea—is industrial diversification, as growth based on fiscal spending—the current focus of the administration—and remittances is not a sustainable recipe for long-term development.
Diversification, because the Philippines, as the bank pointed out, is far too dependent on two export industries, namely business process outsourcing and electronics, while the economy grapples with high poverty levels, particularly in rural areas, as well as low agricultural productivity.
In other words, this country is facing seriously real problems—not really the time for feeding its people with false hopes and promises. What the country needs from appointed officials, particularly the economic managers, are three things: 1) deliver, 2) deliver and 3) deliver. Nothing more, nothing less.