The Diokno plan

As BSP Governor then, incoming DOF secretary Ben Diokno steered the peso from perilous speculative activities and ably controlled inflation. The Finance Department, however, got the country deeper into government debt of almost P13 trillion and 63 percent of GDP, way above the IMF’s prescribed limit of 60 percent.

Adding to our woes were the misspent billions of pesos tainted by anomalies in the procurement of supplies under so-called COVID emergencies.

Mr. Diokno’s recent pronouncements, however, as the incoming DOF secretary and the acknowledged chair of the new set of economic managers, appear overarching and atypical of him as an astute banker.

He wants us to believe that in six years, we are going to have a robust economy featuring: 1) 3 percent fiscal deficit on GDP; 2) mass poverty to be brought down to 10 percent from 23 percent, or better; 3) the country will already be a middle-class economy and 4) assures us that exceeding the 60 percent IMF prescribed Debt-to-GDP ratio is not a thing to worry about because since many countries, like the US, are having stratospheric 200 percent, 300 percent, etc. ratios.

The US is far different and does not worry about funds or their debt levels; it can give away trillions of dollars to foreign aid, without affecting their reserves, including oil, and a stable economy; their robust exports amount to more than $1 trillion annually. In comparison, we had reduced our debt servicing this year due to cash flow problems.

These are some of our down-to-earth economic realities:

The Philippines has been crippled by yearly negative balances-of-trade. Our exports are tail-end among 13 countries in the Asian Pacific region. Our exports in 2019, a pre-COVID year, was $70.3 billion, half of which came from OFW remittances.

Latest unemployment rates were 6 to 8 percent or more than 3 million of 45 million workers out of jobs to sustain their families.

Our dismal “ease-of-doing-business” is at 95th among 190 countries in the 2020 ratings by Trading Economics.

Our poverty rate was highest at 44 percent in 1985; we struggled to lower it down significantly, but continued to be around 20 percent, or affecting 20 million Filipinos, plus more with almost 2 percent population increase annually.

Can we expect to see a realistic economic roadmap from Sec. Diokno? We need to be forewarned of belt-tightening squalls looming ahead. – Marvel K. Tan, CPA, [email protected]