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THE
robust GDP growth in the first quarter is not
sustainable; it is not so much the result of economic
reforms or a substantial strengthening of the domestic
productive economy, but largely because of “scandalous”
campaign spending by politicians for the May 2007
elections, according to independent think-tank IBON.
IBON
estimated total campaign spending by candidates for all
elected positions in the recent polls to be at least P31
billion, and perhaps as much as over P50 billion.
It
asserted that the reported growth “is not sustainable
and even continues the economy’s dismal trend of jobless
growth,” noting that the “momentary increase in growth
rates came largely from the service sector which grew
9.1 percent compared to 6.7 percent a year ago.”
Elaborating, it said, campaigning politicians “drove
transport sector growth up to 8.8 percent (from
shrinking 0.3% last year)” and that spending by “public
beneficiaries of campaign largesse on consumer
essentials” greatly increased retail trade growth which
rose 12.1 percent compared to just a 5.6 percent rate a
year ago.
These,
IBON said, were the biggest factors driving growth in
the service sector which ended up accounting for 4
percentage points of the total gross national product
(GNP) growth of 6.6 percent.
Government services “conspicuously increased by 7.1
percent from a 3.7-percent rate a year ago,” said the
think tank, noting rising government expenditures in the
first quarter as agencies sought to beat a deadline for
completing public works before the election ban.
While
these were happening, said IBON, “there has been barely
any growth in the country’s main productive sectors. The
industry sector was stagnant at 5.3 percent with
manufacturing growth even slowing to 4.6 percent from
5.0 percent a year ago.”
“Manufacturing growth would have been even slower if it
was not for conspicuous improvements in the main
subsectors benefiting from elections. Paper and paper
products showed a remarkable turnaround from shrinking
by 2.7 percent in the first quarter of 2006 to growing
by 9.0 percent this year, likewise with publishing and
printing which shrank 12.8 percent last year and grew
5.6 percent this year.”
Food
manufacturing, it noted, grew 7.7 percent compared to
5.2 percent last year. It noted “only an insignificant
increase in agriculture growth to 4.2 percent from 4.1
percent last year.
Such
“deterioration in the country’s productive base” helps
explain why economic growth has not been benefiting the
people by, among others, creating jobs, said IBON. In
fact, official first-quarter employment data show the
number of jobless workers actually increased 13,000 to
reach 2.9 million in January this year.”
Also
alarming is how even Filipinos with work are apparently
not earning enough and underemployment increased by a
massive 442,000 to 7.2 million. This means a total of
10.1 million Filipinos jobless or otherwise looking for
more work in January 2007. This continues how
joblessness has been maintained at historically high
levels since 2001.
“The
first quarter GDP growth is then going to be
short-lived, aside from not really being a sign of a
strengthening economy. The experience in past elections
has in any case always been of a return in succeeding
quarters to previous levels of spending with the entire
election year in the end not being markedly different.
The economy’s fundamentals remain weak and the momentum
of “free market” decay under the Arroyo administration’s
watch remains an urgent concern,” said IBON. |
