THE President’s State of the Nation Address (Sona) delivered before Congress on Monday highlighted what the Aquino administration claims as its accomplishments in the last five years: High growth rates of the economy, high employment rates, reduction of graft and corruption, faithful service to the “bosses,” etc. The address reaped 150 applauses from Congress, high grades from some groups, and mediocre, including outright failing grades, from yet other groups.
The address needs to be carefully analyzed and evaluated, to separate the grain from the chaff, the truths from the falsehoods, the objective facts from the political spin, so that we, as a people, will know where we really are and how we can reach our goals. Pending the conclusion of what can be a time-consuming exercise, for that is what a careful analysis and evaluation will be, we raise one question for the President to answer.
In the last year of the Gloria Macapagal-Arroyo administration in 2010, our gross domestic product (GDP) grew at an annual rate of 7.6 percent. What pushed this growth rate down to 3.2 percent in 2011, 6.6 percent in 2012, 7.1 percent in 2013, 6.1 percent in 2014, and 5.2 percent in the first quarter of 2015?
We venture an explanation: On your election as president in mid-2010, you inaugurated in our country a period of what you called “matuwid na daan,” or what your critics call a period of pettiness, political vindictiveness and vengeance. Right from the beginning, you bannered “saving” hundreds of millions of pesos from “graft-ridden” contracts of your predecessor, impounding the so-called savings. Result: Shrinkage of GDP growth rate. The same mentality persisted beginning in 2012, impounding so-called savings, or savings as realized from “honest” bargaining for best price. Result: Underspending; performance of GDP below potential.
Sadly, this is public exhibition of gross ignorance. Every student of Economics 101 knows that savings, taken away from the people as taxes to begin with, must be plowed back into the economy as increased consumption or increased investments, otherwise, the economy will shrink.
But one can say that that is ignorance at a personal level—a bad commentary on the quality of mind of the person concerned, but not an affront to the Filipino people. Except that, in this case, a poor personal quality has impacted negatively on the lives of 100 million Filipinos.
Consider: If in the period 2011-2014, our economy had grown at an average rate of 7.5 percent per year, instead of the actual 5-percent growth rate, our per capita income of today, assuming that our population growth rate remained the same, would have been about 15 percent higher than what it actually is. Meaning, our per capita GDP should be P145,000 instead of the P126,000 today.
This underperformance is what needs to be explained to the Filipino people: Why they must accept the economic reality of today, under the leadership of President Aquino, and not that more prosperous economy that they richly deserve.
Image credits: Jimbo Albano
2 comments
Senator Manuel Villar’s column today in this paper gives a better perspective of PNoy’s economic impact.
Of course there is ways to show he could have done better, but how about the 89% PSEI since Aquino took office? The moment foreign investors lose faith in the Philippines, is the moment you realize how good he did.