The gathering storm of the Philippines

FROM FAR AND NEAR - Ruben Almendras - The Freeman

There is a movie “The Gathering Storm”, starring Albert Finney and Vanessa Redgrave which tells of the events and government actions leading to World War II, and Germany’s planned invasion of England. Interspersed with the eccentricities of Churchill and his love for his wife, are the developing congruence and reinforcing of events that led to Britain’s declaration of war. It is in this context that “gathering storm” got its generic meaning as confluence of events, government actions/reactions, and social conditions that may eventually become a perfect storm and a disaster for the people and the country.

Recent events and government actions in the last 13 months in the Philippines are starting to look like a “gathering storm”, and may worsen to a “perfect storm”. The decrease in the second quarter GDP growth rate to 4.3% is ominous. This large growth reduction means domestic and foreign investments are not increasing and domestic consumption is hardly moving. Only the government is spending/investing more and with borrowed money. Inflation has dropped to the 5% level but supply constraints in rice and fuel oil may push this up again.

India is restricting their rice export, Vietnam will increase rise prices, and OPEC will keep on restricting oil supply. Farm output and Volume of Production Index have been declining, export growth is less than 1%, and we are having a monthly trade deficit of $4 billion even with lower import volumes. Add to these, the government debt already at over ?14 trillion, the rise of the unemployment and underemployment rate to 4.5% and 12% in June, and the self-rated poverty at 45%. The Philippines is in the midst of an economic “gathering storm”.

There are also gathering storms in the social and political arena. The growing geo-political tensions in the South China Sea, and our government’s actions/reactions are dividing and polarizing the people and the politicians. While majority or 80% of Filipinos condemn the bullying tactics of China, business and the government leaders are wary of the economic and military implications of any actions against China. So far, it does not look like the government has a comprehensive/integrated/coordinated strategy with a Plan B and a Plan C. It looks like they are just reacting to the day-to-day events happening, which is not inspiring to the people. Maybe it is time to ask the Vietnam government to tell us what to do.

Another gathering storm is the excessive corruption in the government which is roiling the people and even some of the government officials, like Baguio Mayor Magalong, other mayors, and silently even some national officials. It seems pork barrel and kickbacks to congressmen, governors, mayors, and other government officials are SOP, and these are protected by family political dynasties. Together with the unresolved issue on the conduct/counting/legitimacy of the last elections, these are zapping the credibility of the government and its ability to run the country.

Listening and reading the pronouncements of BBM and other government officials, they all have plans, deliverables, and to-do lists. But there has been more talk than action with even the committed infrastructures moving slowly. The departments/bureaucracies are underspending on capital expenditures. It could be a capability and capacity deficiency which means faulty appointments of incompetent/unqualified people.

There are gathering storms in the Philippines, but a very low probability of the Philippines getting into a disaster situation like in Myanmar, Sri Lanka, or Cambodia economically and politically. We will likely just meander or coast along with slower economic growth and moderate socio-political instability. The BBM administration will pass and end as a mediocre uninspiring government, that hopefully will not do worse to the country. Maybe we can do better in the next administration that will have moral leadership and can take the moral high ground.

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