Bizmen on Phl growth, Rosy economic indicators do not reflect true picture

CEBU, Philippines - In spite of just being in high spirits with the good news as Philippines was recently hailed as Asean’s undisputed economic leader by an international credit rating firm, the local business community seemed to be adamant with their stand towards inclusive growth and real economic translation to the Filipino masses.

Last Monday, Standard & Poor’s (S&P) reported that the Philippines has outperformed other Asean economies and taken over the Asean growth leadership role from Indonesia.

According to S&P Asia Pacific chief economist Paul Gruenwald, the Philippine economy would grow by 6.9 percent this year, thus posting faster growth than other economies in the region.

Its forecast further showed that S&P projects the gross domestic product (GDP) of Indonesia to grow 6.1 percent while both Vietnam and Malaysia shall register a 5.3-percent growth rate.

The new report added that the growth forecast for the Philippine economy is higher than the prediction for China at 7.3 percent.

The debt watcher further expects that the entire Asean will register a growth of 5.5 percent through 2015.

Dondi Joseph of Cebu Business Club pointed out that although the GDP is a measure of a country’s economic performance, it remains as a figure with a numerical value.

“We have to remember that it is only a statistic. It is a number that does not give the entire picture,” he said.

While he lauded the credit rating upgrades and performance improvements the Philippines receives as significant achievements, Joseph said that the government has to move much faster to attract foreign direct investments for employment generation. 

He further stressed that job creation is the key to sustained growth.

“We may have surpassed Indonesia in GDP but their GDP per capita is double of the Philippines at $3383. We still have a lot of catching up to do. This is a good start but the government has to act more decisively,” he said in a text message.

Mandaue Chamber of Commerce and Industry president Philip Tan echoed the same sentiments as Joseph, stating that the GDP rate should not be equated to real economic translation.

“Although it is better than going down, we have to be a lot better. Our competitiveness is still far from them. We have to set priorities. Although things are moving, they are not moving fast,” he told The FREEMAN. 

He also said that other Asean countries like Indonesia actually have large economic base due to the influx of foreign direct investments.

He added that the Philippines, on the other hand, still has to work harder especially in terms of infrastructure, ease of doing business, government spending, implementation of projects and competitiveness level against other countries.

He further noted that the country tend to get confused with the economic growth rate and the so-called inclusive growth and real economy. 

“We cannot just look at GDP as a percentage ratio. We have to look at the impact of the economy to its citizens. How is the country moving? Do we already have less poor people? We should not be fooled with the numbers. It has to be in depth. How does the poor ordinary guy understand all of these if he himself does not feel this kind of growth,” he stated.

Rey Calooy, president of the Filipino Cebuano Business Club, expressed appreciation with the newly-released report since he believed that the micro, small and medium enterprise (MSME) sector which comprises the 99.6 percent of the total number of business in the country has accounted a major contribution to the economic growth.

He remains positive that such positive performance will be sustained by the country given the efforts exerted by the government towards inclusive growth and public-private partnerships.

Also this year, S&P upgraded the Philippines' sovereign rating to investment grade status following Fitch Ratings’ upgrade to the same level last March 27.

Last May 2, the Philippines' credit rating went up one notch to BBB- from BB+ with a stable outlook. /JOB (FREEMAN)