What the New Year may bring
Predictions are always difficult to make that's why I always post percentage probabilities. All predictions assume that the past have great influence on the future due to trending and momentum. But then, there is the "Random Walk Theory" and the "black swan phenomenon" that come up with surprising outcomes unrelated to the past. Still, as a political economist and a businessman I have to make predictions/assumptions to use for planning and budgeting which I put a 70 percent probability of happening.
All economists who are tracking the Philippine economy predict a 6.5 to 7 percent GDP growth for the country in 2018 based primarily on the 2017 performance and the government economic plan for 2018. Consumer spending and government investments would likely take the lead while private investments will provide secondary support. On the supply side, construction and manufacturing will be the big factor, and agriculture and other services will coast along. Business will be good with an upward bias over the 2017 performance. Unemployment will go down as infrastructure and manufacturing hiring ramps up, improving the desired economic inclusion/wealth distribution of the economy. Judicious monetary policy and management by the Central Bank will keep inflation in the 3 to 4 percent range, and interest rates should be in single digits for the year. The main "caveat" of these rosy predictions is social and political stability which we all hope will be achieved by the Duterte government.
In the socio-political scene, the ISIS terrorists, the NPA, and the MNLF/MILF will be ones to watch. A flare up by any of them will adversely affect the economy and civil society. It would be unrealistic to expect an early resolution of the issues affecting them, as most will need legislation and appeasement which may take years. So for 2018, what may be needed are progress in the negotiations and containment of volatile bargaining points. The perception and actions of the Duterte government on the legitimate political opposition are also relevant in establishing socio-political peace. It is counter-productive if the political opposition is treated as the enemy marked for total destruction, as a functioning democracy needs countervailing forces. The political and constitutional institutions have to be preserved, and respect for law and human rights enhanced. 2018 will also be the year of preparation for the mid-term local elections, and a credible conduct of the campaign will be conducive to socio-political stability and economic growth. Along this line, a more genteel and statesman-like Duterte and his political allies, and the absence of major political upheaval like a revolutionary government or martial law, will be an added positive factor to the equation.
As to the environmental concerns, earthquakes, typhoons, and floods are natural disasters which are acts of God that we can only pray to be less severe and devastating to people and structures. While I do not believe in a vengeful or wrathful God, our government and the people should behave and act as deserving of answered prayers. Good governments are entitled to good fortune and good luck.
In world events, the Philippines is not really a major player in the international scene, so even if we are linked globally with almost all nations, only major upheavals will affect us economically, socially and politically. A war in the Korean peninsula and/or in the Middle East will have a negative impact, but the Brexit or the eastern European conflicts will have minimal effects. Still, as a Miss Universe contestant would wish, world peace even for just the year 2018 would be a welcome blessing.
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