The latest inflation data which registered a price index of 5.8 for July is more than just a red flag. Because the indicia for the last six months have breached government estimates which were the basis for plans and budgets, the red flags were already there long before.
The economic managers knew it was coming, though probably not in the magnitudes the numbers state. Neither, I suppose, did they expect the peso to sink as low as it has vis-à-vis the strengthened US dollar. Nor did they expect oil prices to go up as much as it has, primarily due to political actions especially by Trump’s America.
Unfortunately, the numbers the “masa” understand, and are most concerned about, are simple: the price of rice; the price of tilapia, bangus and decreasingly, galunggong which has invaded pricey restaurants as it migrated from carinderia fare. The price of vegetables, which really are explained by weather disturbances mostly, cold storage facilities being both rare and expensive in this benighted land. And the prices of a few slivers of pork or pieces of chicken. Throw in sardines and instant noodles.
The same “masa” does not understand GDP. They could not care less if the first-quarter growth went down from 6.6 percent to a flat 6 percent. Sure they likely appreciate the fact, not well- heralded by government but real and factual, that jobs in the construction sector are plentiful. That is mostly because of government infrastructure spending.
Even farm labor is affected, because young brawns would rather work in better-paying construction than in chancy and seasonal agriculture.
So even as government has generated more “trabaho,” with both TRAIN 1’s income tax exemptions for the lower-earning employees, and the mandated wage adjustments for specific public servants have increased the “kita,” the numbers that really matter to the public, as always, is the “tumataas na presyo ng pangunahing bilihin.” And the northward trajectory of prices has truly been felt by everyone, the “masa” most hard-hit.
PTK, sometimes pronounced “pitik” —presyo, trabaho, kita.
The “presyo” over the past seven months, unfortunately, has not just rendered a “pitik” on the average household’s quality of life and cost of living. It has been a “sipa,” a “matinding dagok.”
Explaining with economic jargon after the fact is always difficult, as both our economic managers and official communicators are finding out these days.
And all because the foreseen and foreseeable were un-acted upon at the right time in the case of rice which is a price leader for food. Also because pro-active communications were relegated to the back-burner as we feasted on the inanities of “Norwegia” and “pepe-dede.”
Monetary solutions such as the BSP hike on interest rates
may not be enough. Since the immediate nature of the inflation is
supply-side in character or cost-push, government may need to use
other tools to combat the inflationary surge. Not only does it threaten our economic gains; it is politically toxic.
* * *
The Commission on Audit has time and again taken notice of government- hired consultants. The latest to be upbraided is the BCDA, one of a very few outstanding performers among the GOCCs of the Duterte government.
BCDA and other government agencies and corporations similarly situated should explain why there is often a need for consultants. More often than not, these are needed by newly-appointed CEOs.
First, Philippine bureaucracy is not the meritocracy we see and admire in Japan or Singapore. Many bureaucrats gained their position due to political influence, and some get positions of responsibility not commensurate to their performance. How does a newly-appointed CEO, who, aside from house-cleaning, has to familiarize himself with the agency’s workings be expected to trust the officials he inherited just like that?
Hence the need for consultants.
Second, depending on the magnitude of work or the significance of an agency to the President’s defined goals and objectives, an appointed CEO has to deliver results quickly, considering that the lifespan of his president is six years and no further. Time cannot be wasted on coaxing a sluggish bureaucracy to perform according to the CEO’s expectations.
In the case of the BCDA, which is an important cog in the “Build, Build, Build” machinery, it applied for a re-organization with the Governance Commission for GOCCs or GCG so it could open more positions to handle the growing responsibilities of the agency. That has yet to be approved.
To be able to quickly implement its big-ticket projects under the flagship Build, Build, Build program, an increase in manpower is necessary.
Note that BCDA and its components, such as Clark Development Corporation, have been working at a feverish pace to develop the former military base as a major international gateway considering the inadequacies of NAIA. In quick fashion and with no attendant anomalies, they bidded out the new airport terminal for Clark, and the construction of the Clark Green City, the iconic future megalopolis of the country, is in full swing.
An agency head has to make decisions to spur development
or fulfill its mandate, and bureaucratic lethargy cannot be an obstacle. Would that we had more agencies like the BCDA imbued with a sense of urgency in fulfilling its mission.
* * *
Secretary Carlos Dominguez and National Economic and Development Authority Director-General Pernia have every reason to worry about the effects on the national economy of the shift to federalism.
The numbers paint a non-too-rosy picture, contrary to the panacea that some people project federalism to be.
That is the reason why we submit, as we already have in previous columns, that it’s time we take a breather, discuss more broadly, engage every sector of the citizenry, and consider a longer time-frame for the transition, if we should shift from the present unitary system to the federal.
Listen to the economists. As our mantra in this space always repeats: Good economics is good politics.
And to add: Democratic form must always provide economic substance, that is, the economic well-being of the greatest number.
