THE economy can hit the government’s growth target of 6.2 percent next year because of spending ahead of the 2016 elections, but this is unlikely to be sustainable and will have little impact on unemployment and poverty, former national treasurer Leonor Magtolis Briones said Wednesday.
“GDP [gross domestic product] growth is expected but its sustainability is uncertain. The poor and unemployed remain vulnerable,” said Briones, lead convener of the budget watchdog Social Watch Philippines.
“The year before elections, you have what we call an election budget. SWP and many others have said this many times over the years and one of the things we have to look out for is its implications on the GDP and social development,” she said.
Briones said the government increases spending on projects, especially on infrastructure, to project the idea of progress and activity to the public.
“Because of increased activity, there will also be more jobs available, such as those in construction,” she said.
Politicians running for office, she said, will also employ more people into their campaigns and produce campaign materials.
Financial institutions will also be affected by this flurry of activity with the money that will be circulating in the economy, she added.
“GDP rises but we must ask: Is it all sustainable? Are the jobs permanent or enough to lift the individuals and families out of poverty?” she said.
“According to the International Monetary Fund (IMF), the 2015 GDP growth is estimated at 6.3 percent. The Asian Development Bank (ADB) has a similar projection at 6.2 percent. However, both institutions have cut back on their projections from an estimated 6.5 percent due to national and global factors, such as higher consumer prices and growth slowdown in the ASEAN,” Briones said.
Briones said addressing unemployment and underemployment is a concern that will have implications on overall growth and wealth distribution.
As of October 2014, Briones said, the Philippines’ unemployment and underemployment rates were 6 percent and 18.7 percent, respectively, based on official records of the Philippine Statistics Office.
“Addressing employment issues profoundly affects our levels of poverty. Social Weather Stations estimates self-rated poverty at an alarming 54 percnet in the last quarter of 2014 from 52 percent in 2013,” she said.
In 2014, Briones said, 41 percent of Filipinos consider themselves at “food-poor.”
The National Statistics Coordination Board estimates poverty at 25.2 percent as of 2012, with farmers, fishermen and children remaining the poorest sectors, Briones said.
SWP’s public finance campaign advocates the use of the national budget as a powerful tool to address social inequalities.
However, Briones warned that with the approval of the 2015 budget containing the redefinition of “savings,” which can be declared at any time of the year and can facilitate machinations similar to the controversial Development Acceleration Program, its vulnerability to corruption and misuse is ever more present.
“If savings can be declared any time of the year by the executive, the legislative [branch] effectively renounces its power of the purse. This is a dismal development in our democracy because the legislative is supposed to stand up for the public’s interests, such as poverty reduction and secure employment. This flexibility in declaring savings reduces the power of the General Appropriations Act to a superfluous law, which the cxecutive can simply adjust,” Briones said.
“From the budget to the growth projections, there is still so much we have to scrutinize so we can achieve genuine and positive change in poverty and unemployment. There will be economic growth in 2015 but it does not mean that we have gotten rid of the vulnerabilities and have made lives better for the vulnerable,” Briones said.