"Land to the landless is no longer the call of the times."
"Land to the landless is no longer the call of the times."
I understand that the Department of Agriculture will now be headed by veteran agri-technocrat Dr. William Dar. I don’t think I’ve ever met him, but the reputation and the resume he brings with him are pretty impressive.
This is an appointment that Duterte should be roundly praised for. Together with my fellow free marketeers in FEF, we’ve always believed that improving agricultural productivity is the existential challenge our country faces:
• uplift the poor (because most of them are in the countryside) guarantee more and cheaper food for everyone (witness the immediately salutary effects of rice tariffication)
• permanently tame inflation (because food accounts for half of the basket of goods that drives prices in general)
• even spur the industrialization without which our country simply cannot realize its middle-income ambitions (because higher farm productivity frees young farmers to join the urban working class, while lower food prices lead to lower real wages and thus make manufacturing more cost-attractive to investors)
Should Congress ever be seized by some spasm of creativeness, it may even wish to go further, abolish the Department of Agrarian Reform (DAR), and transfer any remaining relevant sub-units into the DA. Land to the landless is no longer the call of the times, not when our agricultural sector is still in the doldrums despite the redistribution to date of some 20 Million hectares.
Who better than a Secretary Dar to start running DAR as well?
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Let me take the easy way out today and just update my readers on the latest economic prognostications by my FEF colleague, Monetary Board member Dr. Philip Medalla, with which he regaled us at FEF’s latest monthly dinner:
After hitting 5.2 percent last year, inflation will drop dramatically this year to 2.7-3.5 percent and average 2-4 percent annually until 2022. This year’s drop can be credited to the impact of rice tariffication on lower food prices, as well as moderating oil prices abroad.
Despite higher government spending on infrastructure under its Build, Build, Build program, the budget deficit (relative to GDP) is falling and will continue to fall.
One obvious reason for improving deficit numbers is robust economic growth. We’ve enjoyed 81 straight quarters of real GDP growth ever since the Asian financial crisis in 1998. Quarterly growth rates are also slowly picking up speed and may soon reach the highest levels since we started tracking GDP statistics.
One driver of growth is favorable demographics. From 2015-2040, the region’s two giants, China and Japan, will see their productive population between the ages of 15-64 contract by -10.4 percent and -24.7 percent, respectively. In stark contrast, we will grow ours by an amazing +59.5 percent. [This should give serious pause to all those birth-control advocates and overpopulation gloom-and-doomers.]
Another growth driver is the rising share of wage and salary workers to total employment, compared to own-account and unpaid family workers. The organized labor sector is more productive and improves productivity faster.
At the same time, capital expenditures by the corporate sector—the economy’s most productive and dynamic sector—have also been growing especially since 2010. The efficiency of capital deployment has also been improving (as measured over time by the incremental capital-output ratio or ICOR), leading to an increase over time in the economy’s overall productivity.
Sector by sector, services have unsurprisingly grown the fastest. But construction has also picked up in the last 10 years, while Philip describes manufacturing as “doing well.” As mentioned above, the underperformer is agriculture, where growth continues to lag population growth.
With all this growth, imports have unsurprisingly also picked up, widening our trade deficit to a level that can no longer be fully financed by BPO and remittances, the two other major components in our current account. But the slack is being picked up by our capital account, with huge inflows from direct, portfolio, and “other” investments.
With those inflows, our gross international reserves as of May 2018 were ranked fifth largest in the world by the IMF. We were one of only four Asian countries in the top 20 list. Earlier projections of a significant depreciation in the peso did not happen, and Philip’s exchange rate forecast for the year is a relatively benign range of 51-53, widening somewhat to 51-55 thereafter until 2022.
In sum, Duterte continues to have the wind at his back, to the unending consternation of his tireless critics. Fortune indeed favors the bold.
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In the Book of Deuteronomy, the Prophet Moses, sensing the nearness of his death, vigorously enjoins the Israelites never to turn their backs on the Lord who brought them centuries of peace in the Promised Land at the end of their exodus from Egypt. In today’s reading (Dn 7: 9-10, 13-14), he especially warns them to observe the commandments, statutes and decrees of what came to be enshrined as the Mosaic Law of the Jews.
In the Gospel (Lk 9: 28-36), Moses reappears centuries later, this time together with the Prophet Elijah as they converse with a transfigured Christ before the awed disciples Peter, John and James. When a Divine voice declares from above, “This is my chosen Son; listen to him,” the two prophets then disappear, leaving Christ to His disciples as the very fulfilment, as well as replacement, of the old Law.
Today’s Feast of the Transfiguration of the Lord was first adapted by Rome from the Eastern rites to commemorate the defeat of Muslim invaders in Belgrade in the 15th century. As the fourth Luminous Mystery, it celebrates the Divine confirmation of Jesus as Savior—to repel infidels, to rebuke followers of the old Law, and to remind and renew all Christians in their faith.
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