WE Filipinos should brace ourselves for a difficult year. With the release yesterday by the National Economic and Development authority (NEDA) of the economic growth figures for 2015, and with heavy clouds looming over the world economy in 2016, we should not be lulled into complacency by the high expectations and general optimism that will naturally attend the accession to office of a new president on June 30 this year.
As announced the other day by NEDA Director-General and economic planning Secretary Arsenio Balisacan, who has actually resigned to take up another important post, the Philippine economy grew by 6.3 percent in the fourth quarter from a year earlier.
This brought full-year 2015 growth to 5.8 percent, which will mark one of the strongest expansions in the world in a turbulent year.
Secretary Balisacan described the growth figures as “respectable” amid a prolonged El Nino and global risk factors from China and the US.
Government had earlier set a full-year growth target of 7 to 8 percent, but it had to admit that it would be difficult to hit even the low end of the target range, after a slowdown in the first half of the year due to President Aquino’s decision not to spend government funds for job creation and economic pumpriming.
Overall, the Philippine economy remained as one of the fastest growing countries in Asia next to India, China and Vietnam. There is hope of higher growth this year as the global economy picks up, but these hopes may be dashed.
With the lower than targeted GDP growth in 2015, and the end nearing for the Aquino administration, the government is shifting focus from 2015 growth, to the average growth under the Aquino administration.
Balisacan underscored the shift in narrative, saying: “ During the course of President Benigno Aquino III’s administration, our country grew at an annual average of 6.2 percent from 2010 to 2014.”
This narrative will be overrun by the election campaign and the transition to a new administration.
While most Filipinos believe that a declarative end to the Aquino presidency will be a relief and a blessing, high expectations and optimism about a new administration will not be enough to turn a difficult year into a good one.
High on the list of challenges are the economic slowdown of China; the precipitous drop of oil prices and the slowdown of OPEC countries in the Middle East, which will impact on the OFW s and remittances from the region. Already, the BSP is projecting a slowdown in remittances this year.
Much will depend on the character and vision of the next leader, and the management team that will form the ballast of his administration. Difficulties will ease or deepen depending principally on the new policies and reforms that he will institute, and the changes that he can effect in the dysfunctional politics of the country.
With the election campaign set to start this February, the presidential candidates have been mainly focused on campaigning effectively, and not on telling the public of their plans and ideas of how they would govern if elected. No one has ventured yet to describe cohesively his platform of government.
Philippine presidential elections are always like a crapshoot because of the lack of real political parties and a shallow political bench.
The uncertainties of electoral politics notwithstanding, nevertheless the potential for a high –growth and dynamic Philippine economy is latent in the country ‘s strong fundamentals and dynamic demographics – which is not due to anything President Aquino and his Cabinet have done.
As we said in this space yesterday, 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. BS Aquino can still be the doer, in the five months before he leaves office, and before the economy’s strengths are eroded.