7% Q2 growth: Impressive but non-inclusive
Today, all sorts of media (broadcast, broadsheet, internet, etc.) are dominated by the “word war” between President Rodrigo Duterte and Senator Leila De Lima. Emanating from Sen. De Lima’s “call for accountability in the rising death toll” of alleged drug personalities, Pres. Duterte has fired back by claiming that she is an “immoral woman”. However, amid this hoopla, the economy has, reportedly, continued to expand.
Indeed, that the economy is growing was indisputable. It is election year, thus, government spending shoots up and politicians’ well-secured treasure chests (including their share of the “pork barrel” loot and “illegal drug” generated money) are unlocked.
Therefore, money flows freely and recipients (of both good and bad money) were on shopping sprees. So that, when Socio-economic Planning Secretary Ernesto Pernia announced last week that the economy expanded by 7 percent in the second quarter, in unison, pundits declared that this growth is expected.
Moreover, with the revised 6.8 percent in the first quarter, we happened to be the fastest growing economy in the region. Notably, the industry and services sectors remained the economy’s main contributor. For one, the services sector hit 8.4 percent growth on the back of faster growth in trade, transport, communication, public administration, and real estate, renting and business activities. The industry sector, on the other hand, with strong performances from manufacturing, construction, and utilities, recorded a growth of 6.9 percent.
Moreover, with OFWs’ inward remittances hitting P13.19 billion as of June 2016 (or a 3.2 percent increase from the P12.782 billion booked in the same period last year per BSP), consumer spending has continued to increase.
Unfortunately, however, the agriculture sector has not just remained dormant, it went down in the second quarter. As usual, the long drought was the ready excuse. We say, ready excuse, because other countries where dry season is longer and severe are even exporting agricultural produce.
Truth to tell, in the past decade, the country’s Gross Domestic Product (GDP) grew significantly. In fact, spurred by consumer demand, the resurgence of exports and investments as well as election-related spending, it grew considerably by 7.3 percent in 2010. Truth to tell, despite a very much maligned Arroyo administration, our economy parlayed the 2008-2009 recession better than our other Asian neighbors.
Moreover, the boom in the outsourcing industry and the steadily increasing remittances from Overseas Filipino Workers (OFWs) have added impetus to a once sagging economy. Consequently, our economy grew at a yearly average of 4.5 percent the past decade. To PNoy’s credit, however, in his reign our GDP grew a lot faster. Undisputedly, the economy’s performance during his term was the best so far.
Despite this rosy picture (both GMA’s & PNoy’s reign), however, poverty incidences remained high. Thus, our countrymen are wondering, why in heaven’s name we claim to have grown significantly in more than a decade and yet majority of our brethrens are languishing in poverty. For one, economic growth is generally measured in terms of GDP. Increase in GDP does not necessarily trickle down to the grassroots. It simply means that the pace of growth is there but the path or pattern of growth does not cut through the working class or the masses. To put it bluntly, we certainly have “economic growth” but, absolutely, there is no “inclusive growth”.
There are many ways of attaining “inclusive growth.” However, the most tenable approach is through productive employment. This can be addressed by encouraging new investments, both foreign and domestic. Or, should the government must directly intervene, through productive-oriented supports to the most vulnerable sectors.
True enough, we had our own share of foreign direct investments (FDIs). Notably, however, most of these have been so focused only on business process outsourcing (BPO). In fact, this is clearly manifested in the latest economic report which showed consistent growth in the service sector.
Unfortunately, however, as far as inclusive growth is concern, the BPO sector does not contribute that much. This sector employs not only the well educated but the best among them. Thus, they don’t directly give opportunities to individuals who are among the inadequately educated, the poorest of the poor, so to speak, who are mostly in the agriculture sector.
To the previous administrations’ credit (both GMA’s & PNoy’s reign) though, it has addressed this concern by allocating billions of taxpayers’ money to support agriculture. On record, through the Department of Agriculture, billions have been released to address our poor farmers’ concerns for decades. Bastardly though, the support was just on record.
Therefore, it is becoming more evident that while some government officials are enjoying their obesity of it, the poor farmers have perpetually starved for it. Thus, with Pres. Duterte’s promise to end corruption in his term, hopefully, he shall be able to look into this concern as seriously and as brutal as the way he dealt with the drug menace.
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