Economic growth is not enough, people want social progress and better quality of life

Are our government leaders and economists living on another planet? Why did the May 9 referendum on the Noynoy Aquino administration — as the President himself framed it on several occasions including Nov. 16, 2015 at the APEC Summit held in Shangri-La Makati in reply to CNN editor Andrew Steven’s query — result in a resounding political defeat for his “Daang Matuwid” administration, despite his annointed successor being highly educated, Wharton-trained former investment banker Mar Roxas?

Why was the outgoing government repudiated by voters despite six years of decent high economic growth and with P3 trillion per year of state funds to spend or even to give away as Conditional Cash Transfer (CCT), etc.?

Why was it not enough that we have good economic growth rate and international credit rating upgrades? What were the shortcomings of the outgoing government which made voters go instead for Davao City Mayor Rody Duterte, the leader who is the exact opposite of the personality, governance style and ideas of our outgoing president P-Noy? What lessons can our new leader learn from the shortcomings of the well-intentioned, personally-not-corrupt President Aquino?

Lack of inclusive economic growth. True, there has been a boomlet of new condominiums enriching our top realty developers and constructions of new glitzy urban shopping malls in our major cities; but much of this economic growth is consumer-driven, fueled mainly by our unsung heroes, the millions of overseas Filipino workers who last year pumped a record US$29.7 billion into the Philippine economy. This is the world’s third highest foreign exchange remittance volume by a nation’s overseas workers. To have inclusive growth, we need more investment-fueled growth in factories, farms, tourism ventures, etc. to create millions of new jobs here in the Philippines!

Another catalyst of Philippine growth is our BPOs, which is good for our economy but which largely benefit the educated, urban-based and generally English-speaking segments of our national population. The rural and urban poor are left behind.

Failure to improve people’s quality of life. Nonstop public gloating through self-congratulatory praise releases on “high economic growth” are meaningless and even irritating for most Pinoy people, because, generally, quality of life has declined.

A government’s duty is to be vigorous and interventionist in helping redistribute the benefits of economic growth and equalize opportunities with better infrastructure (not lousy congested airports, traffic-clogged streets and lack of high-speed trains), affordable medical services, decent pension levels for retirees, guaranteed peace and order (not much crime or illegal drugs), affordable housing, etc. Multibillion- peso doleouts in conditional cash transfers alone are not enough — government should do more!

“Daang Sarado” or lack of major infrastructure projects despite world’s historic record low interest rates. Philippine STAR editor in chief Ana Marie Pamintuan on May 20 wrote comparing the number of tourists visiting Mexico to ours: “Mexico? Last year alone, a whopping 32.1 million foreign tourists (went there) — in contrast to the 5.4 million arrivals in the Philippines, way below the 10 million target of daang sarado.”

Business journalist Dax Lucas wrote: “In six years, I’ve never heard any Yellow acknowledge that Philippine economic growth was boosted by the lowest global interest rates in human history. Lowest interest rates, cheapest funds and most liquidity in human history... and this is all the economic growth you could muster? Make no mistake about it: we will never see interest rates this low ever again in our lifetimes. We missed a once-in-a-lifetime chance to fund big-ticket infrastructure projects cheaply (nearly free, in fact).”

Better infrastructure is one way for government to equalize opportunities and lift the poor, via tourism, agriculture, better lives. Despite the marketing savvy of Tourism Secretary Mon Jimenez, how could we in the Philippines possibly hit that 10 million target for tourists if the national government has failed to quickly undertake major infrastructure projects?

San Miguel Corp. boss Ramon Ang at the outset of P-Noy’s term had offered to build a new international airport for the country at zero cost to us taxpayers and scheduled to finish it before P-Noy’s term expires; that visionary plan was not approved and there were no alternative plans started in six years. I urge new President Rody Duterte to please do something with our horribly congested and inefficient Ninoy Aquino International Airport (ironically named in memory of P-Noy’s late dad).

Low foreign direct investments. Without huge foreign investment inflows, no country could solve thje problems of poverty, unemployment and lack of inclusive economic growth despite all the praise releases in local or foreign media.

Why has the Aquino government failed to woo bigger foreign investments despite our much-ballyhooed international credit rating upgrades? Why do we attract fewer FDIs than Indonesia, Myanmar, etc.? Is it due to our woeful infrastructure, our bad peace and order image abroad, our still having one of ASEAN’s highest business tax rates, Asia’s most expensive electric power rates, or President Aquino’s resistance to multi-sectoral appeals for Charter or constitutional change on those restrictive economic provisions?

Failure in agriculture. I don’t understand why the outgoing administration’s agriculture secretary has been repeatedly accused of failure by even some stalwarts of the ruling Liberal Party. Why were no reforms made?

At one time, there were even two cabinet-level officials in charge of agriculture and both cabinet secretaries reportedly even disagreed with each other. Millions of our poorest are rural farmers and their families; when will we make our vast arable lands and our rich aquatic resources enrich our people and the Philippine economy?

Failure in upholding balanced foreign policy to gain economic benefits. One of the glaring failures of the Aquino administration is its inability to craft and uphold a balanced foreign policy guided only by the Philippines’ strategic and economic national interests.

Not only have bilateral ties with the world’s second biggest economy, China, sunk to its worst levels while our neighbors Indonesia and Thailand are cooperating with China to build high-speed trains, I heard our traditional good relations with oil-rich countries Russia and Iran, etc. have also been neglected. In stark contrast, pragmatic South Korea has the best win-win diplomatic and trade ties with China despite political and even North Korea disagreements.

Double-digit economic growth needed to solve poverty. Last but not least, I’ve written this many times before, even during the term of former President Gloria Macapagal Arroyo who was my macro-economics professor at the Ateneo de Manila University. Government leaders should be more humble and truthful. We in the Philippines need sustained double-digit economic growth of 10 percent per annum or more for several years for us to realistically overcome the age-old problem of massive poverty!

It is not accurate for politicians to crow about our “having the highest economic growth in Asia” and comparing our country to the world’s second and third largest economies like China and Japan, or even to our richer neighbors Thailand or Malaysia, due to the smaller base of our economy or gross domestic product (GDP).

Our government bragging about our economic growth is comparable to, say, an SME-sized realty entrepreneur, like myself, bragging to the world that I earned 200-percent growth in my 2015 net profits and therefore comparing myself to SM Prime Holdings, Inc. — which had a 2015 profit growth of “only” 54 percent, or Ayala Land which had a growth of “only” 19 percent. Such a comparison completely ignores the reality that SM Prime 2015 profits totaled P28.3 billion and Ayala Land 2015 profits totaled P17.6 billion! No comparison!

I hope our new set of leaders led by President Rody Duterte will be more humble, realistic and bold in comprehensive socio-economic reforms so that they can lead the Philippines into a better, more just, more progressive and more peaceful future.

Economic growth or GDP statistics are meaningless and can be outright lies, if we do not translate these figures into better quality of life for the people and true social progress!

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