"The economy is so huge, the resources of the country so rich and enormous, and the people so talented and resilient the Philippines cannot but keep growing."
"The economy is so huge, the resources of the country so rich and enormous, and the people so talented and resilient the Philippines cannot but keep growing."
You can say that President Rodrigo Duterte is lucky. He is lucky that he has a good economic team headed by Finance Secretary Carlos Dominguez. He is lucky that the economy has been growing robustly despite all the incessant noise about extrajudicial killings, the harassment of the press, the persistent corruption and red tape in the government. Despite the fact that President Duterte himself has declared that his celebrated illegal drugs war has been a failure.
Not many people are aware of this: Even if the president of the Philippines were not Duterte, even if the president were non-performing, like in the case of the unlamented President BS Aquino III, the economy would just keep growing. Why? Simple law of physics and gravity.
The economy is so huge, the resources of the country so rich and enormous, and the people so talented and resilient the Philippines cannot but keep growing.
Under BS Aquino, agriculture, infested with massive corruption and incompetence, grew to its slowest rate; infrastructure was allowed to rot; and his yellow administration underspent to the tune of P1 trillion.
And yet, by the time Aquino was ending his six-year presidency (2010 to 2016), the economy even grew by an amazing 6.2 percent—one of the highest growth rates in Asia. This is a do-nothing president; BS Aquino was the worst president in terms of lack of diligence, lack of hard work, and lack of empathy with the people.
And yet, the economy under BS Aquino grew by a substantial 6.2 percent. In 2012, the economy even grew by 6.7 percent. It topped that with an even higher 7.1 percent in 2013, an election year. By 2014 and 2015, the economy was coasting at a comfortable 6.1 percent clip. How do you explain a robust economic growth of six years amid colossal incompetence, corruption and inaction? Simple answer: The PH economy is just too strong as to be brought down by outside of an intensity 10 earthquake.
Now, under Duterte, the economy has grown by an average of 6.6 percent—6.9 in 2016, 6.7 in 2017, and 6.2 in 2018.
You can say the 6.9 of 2016 and 6.7 of 2017 were momentum effect growth rates. So 6.2 percent of 2018 is the more realistic growth under Duterte. He achieved 6.2 percent despite the worst rice crisis in 50 years, the highest inflation rate in 11 years, unprecedented interest rate increases, a worsening water shortage, a sharp surge in oil prices, and a budget deficit that is higher than budgeted.
Department of Finance Chief Dominguez told a forum in Washington DC on April 30: “Today, the Philippines is one of the fastest growing economies in the world. Reaching this milestone in our development story is attributable to many years of hard work—especially in building a strong fiscal position and a bureaucracy honed to the task of catalyzing growth.”
“Our economy has been growing at an average of 6.5 percent during the first 10 quarters of President Rodrigo Duterte’s administration,” asserted Dominguez, adding:
“The results of the last three years have clearly demonstrated our resolve and success. In 2016, our people chose a leader of proven political will, a record of pragmatic leadership and a commitment to sweeping reforms. President Rodrigo Duterte presented a 10-point socioeconomic agenda of governance that emphasized continuation of pro-market macroeconomic policies, a progressive tax reform program, improvements in the ease of doing business, a more transparent and responsive government, increased investments in our human capital, and enhancement of peace and order.”
Additionally, crime volumes went down, a Bangsamoro Autonomous Region is now in place, a Build, Build, Build spending exceeded 5 percent of GDP for the first time in our history (and will entail $170-billion funding), and best of all, according to Dominguez, “a comprehensive tax reform program—the first one to be undertaken by the Philippine government without the compulsion of an economic crisis—is well on its way to full enactment.”
The people can distinguish between solid performance under Duterte and vaporware under BS Aquino. If surveys are correct, none of the eight opposition candidates for senator will make it. All the 12 winning senators are pro-Duterte—Cynthia Villar (her husband is now the unrivaled richest Filipino with probably understated wealth of $5 billion), Grace Poe, Lito Lapid, Pia Cayetano, Bong Go, Sonny Angara, Bong Revilla, Bato dela Rosa, Nancy Binay, Koko Pimentel, Imee Marcos, and Jinggoy Estrada.
It is not the best Senate team you can muster or want.
In the 1960s, 10 of 24 senators were bar topnotchers, and two-thirds of the senators were lawyers. In July this year, our Senate will have only one bar topnotcher (assuming he wins), Koko Pimentel.
The same Senate is building a P15-billion palatial Senate Complex in Taguig where every senator will have a whole floor to himself/herself. This is the same Senate that tripled the price of your orange juice under a new tax that taxed both the sugar and the water that contains the sugar. Only the sugar should have been taxed. But then the senators don’t understand chemistry although they understand the brick and mortar of a building.
Under Duterte, does anyone need the Senate? A credit rating upgrade is better appreciated than a lame Senate. On April 30, S&P upgraded the Philippines’ credit to “BBB+,” with “stable outlook,” a rating below “A”. Both “BBB+” and “A” are investment grade, but “A” always sounds better. Said S&P: “The Philippines has above-average economic growth, a healthy external position, and sustainable public finance.”
What does BBB+ mean to you and me, ordinary borrowers? Nothing much really. We will pay the same high interest rates for our loans. We will pay the same atrocious interest rates charged by your credit cards—8.5 percent per month (102 percent a year) even for purchases you just made this morning and are not yet due to be paid.
The BSP, which is now pro-poor (the common term for inclusion) should look into the oppressive practices of credit cards. They explain why the five biggest banks make P2 billion in profits monthly.
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