‘Yolanda’ and the gdp–‘minimal’ impact?

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PROF. EMERITUS LEONOR MAGTOLIS BRIONES

Emeritus Leonor Magtolis Briones

The government recently came out with the third quarter numbers on the Gross Domestic Product (GDP)—7.0 percent for the third quarter of 2013—which is lower than the 7.6-percent growth attained during the second quarter. It is also lower than the growth of 7.3 percent attained for the same period in 2012.

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As expected, analyses from government and private sector sources differ. Government staunchly maintained the line that our GDP remains “one of the brightest spots in the region.” Two leading officials dismissed the impact of Yolanda and the Bohol earthquake as “minimal” since “affected provinces don’t contribute much to the GDP.” On the other hand, private sector analysts noted that “the Philippine economy grew at its slowest pace in more than a year.” The economist of one of the largest banks predicted the slow momentum of growth will last till the fourth quarter until the first half of 2014.

Predictably, the agriculture, hunting, forestry and fishery sector remained the laggard with growth at a low of 0.3 percent, while the industry sector had the highest rate of growth at 8.2 percent, followed by the service sector with growth at 7.5 percent.

Even before the Zamboanga political crisis, the Bohol earthquake and Yolanda’s devastating storm surges, Social Watch has consistently pointed out that the GDP does not really give a full picture of development in a country like the Philippines.

In the first place, it is an aggregate number. For example, the lagging sector is agriculture where most of the poor happen to be, and where large numbers of unemployed are located. For the poor and unemployed in agriculture with its pitiful growth of .3 percent, the GDP growth is not only meaningless; it is an indictment on our economy which does not share its impressive growth and wealth with “the wretched of the earth.”

In the second place, the GDP measures aggregate economic growth; it does not measure social development, employment and unemployment, and other important social indicators which reveal whether all social sectors are included and no one is left behind in the march to progress.

Social indicators before Yolanda
Even before Bohol’s massive earthquake and Yolanda’s destructive fury, poverty levels have remained “practically unchanged “since 2006, 2009 and 2012. As of 2012, poverty incidence was estimated by government at 27.9 percent while subsistence poverty was at 13.4 percent. It is clear that the much-touted fantastic GDP growth rate at that time and the successive two trillion peso budgets did not make a significant dent on poverty levels.

Officials talk about minimal impact on the GDP. Assuming this is true, certainly, the impact on poverty is “to the max!” We must remember that the seven provinces affected—Leyte, Samar, Iloilo, Masbate, Negros Occidental and Oriental and Antique have among the highest levels of poverty in the country. Eastern Samar, Northern Samar and Negros Oriental are among the 16 poorest provinces in the country. Eastern Samar is among those which had dramatic increases in poverty levels in 2012.

GDP and unemployment
A country can chalk up high GDP growth rates but if the unemployment and underemployment rates are also high and escalating rapidly, these can be a drag on its development.

A World Bank Study revealed that only 25 percent of all those employed are in the formal sector; the rest are in the informal sector. This means that 75 percent of all those who work don’t have the protection of the law and are not unionized.

The devastation wrought by the earthquake and Yolanda surely exacerbated unemployment and underemployment in the Visayas. Infrastructure, businesses, homes, as well as farms and manufacturing firms have been leveled to the ground and swept away.

Health issues, fear and uncertainty after Yolanda and the earthquake

If natural calamities descend on the hapless poor, the jobless and the hungry, can health epidemics be far behind? Lack of clean drinking water, nutritious food, clinics and hospitals can exacerbate the threat of epidemics.

However, the worst threat to our much-vaunted GDP is fear and uncertainty. How can we assure our people that if a typhoon like Yolanda will again hit—more powerful, more vicious and more destructive—our government and our institutions will prepare and protect them? How can we convince our traumatized victims to start and rebuild once more? Thousands have fled to Manila and the neighboring provinces, creating more demand for food, shelter and housing. Can we convince them to return?

In the meantime, let us not, like Marie Antoinette, sweetly say to the cold, the hungry, the sick and the hopeless: You need food? You can eat our GDP!

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1 Comment

  1. The government is telling us lies. Corruption in the government is the best evidence that our economy is very very bad. No amount of economic theories can solve the reality of our needs.