By Cai U. Ordinario & Catherine N. Pillas
In terms of economic performance, President Aquino did better than his five predecessors as average GDP growth between 2010 and 2015 posted a 40-year high of 6.2 percent, the National Economic and Development Authority (Neda) said on Thursday.
But local economists said Filipinos hardly benefited from this high economic growth being touted by the Aquino administration.
Outgoing Economic Planning Secretary Arsenio M. Balisacan said the 6.2-percent average growth in six years was “remarkable” as this was supported by concrete investments that created jobs.
“Growth in the past six years was not artificial, not like in the 1970s when the government relied on unsustainable borrowings and short-lived portfolio capital,” Balisacan told reporters in a news briefing held in Quezon City on Thursday.
Based on the BusinessMirror’s computation using data from the Philippine Statistics Authority (PSA), GDP growth during the term of former President Corazon C. Aquino averaged 3.85 percent; Fidel V. Ramos, 3.75 percent; Joseph E. Estrada, 2.3 percent; and Gloria Macapagal-Arroyo, 4.45 percent. The PSA has no data on GDP growth during the term of former President Ferdinand E. Marcos.
The government was upbeat even as the 2015 GDP growth of 5.8 percent fell short of its 6-percent to 7-percent target. Growth last year was the slowest since 2011, when the economy managed to grow by only 3.7 percent.
Government underspending in the first half of 2015, weak export earnings, and the lackluster performance of the agriculture sector dampened the country’s GDP growth in 2015.
Businessmen belonging to the Philippine Chamber of Commerce and Industry (PCCI) said the traffic dilemma and the lingering port congestion problem have contributed to the failure of the government to hit its growth target in 2015.
Last year Services was the main driver of the economy as it grew 6.7 percent. The growth of Industry and the entire Agriculture sector slowed to 6 percent and 0.2 percent, respectively.
Compared to other major developing economies in Asia, Presidential Spokesman Edwin Lacierda said the Philippines ranked fourth in terms of GDP growth for 2015, behind India, China and Vietnam.
The government and local businessmen, however, expect the country’s economy to perform better this year on the back of higher consumption spending due to the presidential elections and the recovery of exports.
To ensure that the Philippines would remain on a high-growth trajectory, Balisacan said the next two to three administrations should diversify the country’s export products and strengthen the “socioeconomic resiliency” of individuals and communities.
“If we want to reach the highest potential of our economy, we should be keen in fortifying our economic achievements, and strengthening and institutionalizing the reforms this administration laid out for the years ahead,” said Balisacan, who is also Neda director general.
‘Disconnect’
Economists said, however, that the country’s growth during Aquino’s term was hardly felt by the poor.
“Poor Filipinos hardly benefited from the 6.2-percent average growth due to the quality of growth and persisting sharp inequality across social sectors,” former Asian Development Bank lead economist Ernesto Pernia told the BusinessMirror.
For his part, University of Asia and the Pacific School of Economics Dean Cid Terosa said the poor are “disconnected” from a high GDP growth because of poor social services and problems that plague health, education and agriculture.
Terosa said the basic education and health sectors are beset by “decades-old issues,” such as the lack of facilities and funding.
Asian Institute of Management Policy Center Executive Director Ronald Mendoza attributed the difficulty of the poor to benefit from growth to “structural factors,” such as expensive energy, chronic conflict in poor regions and the lack of access to financial services.
Mendoza added that the restrictions in foreign and local investments make it more difficult to create jobs for Filipinos.
Based on the latest Labor Force Survey, over 7 million Filipinos are currently looking for better jobs, and 2 million are jobless.
“The Aquino administration has taken important steps to address many of these challenges, yet, it will take more time and deeper reforms to sustain our high growth while building greater inclusiveness in its benefits,” Mendoza said.
Sources of optimism
For this year, the Department of Budget and Management has expressed confidence that the May elections, which would spur government and private-sector spending, would boost growth.
The PCCI said ongoing public-private partnership projects and higher government spending give businessmen reason to hope that the country’s performance this year would be better. “Also, exporters feel that the US market will recover this year so this will help prop up GDP,” PCCI President George T. Barcelon said.
(With a report from Dave Cagahastian)
Image credits: NONOY LACZA