Before he finally steps down from office, President Aquino can bequeath to the nation the glowing economic numbers the country has achieved during his six years at the helm of Malacañang.
The recent uptick in GDP growth to 6.9 percent is the highest since the second quarter of 2013. The country is now considered the fastest-growing economy in the region, eclipsing regional giant China, data from the National Economic and Development Authority (Neda) show.
GDP is the fiscal value of all the finished goods and services created within a country’s borders in a specific period. Some economists believe that it is indisputably the central of all economic indicators as it endeavors to measure the state of the economy in just one number.
In the first quarter, the Philippines’s 6.9 percent GDP growth rate surpassed the 5 percent it registered in the same period last year, beating market expectations of a 6.6-percent growth. Neda predicts that the economy seems to be headed to meeting the full-year target of 6.8 percent to 7.8 percent, barring a significant drop in business confidence in the second half.
President Aquino and his economic team’s macro management of the economy is certainly a laudable feat, considering that the GDP under his watch is bigger that what the other administrations before his had achieved.
But why is it that this sterling growth rate hasn’t filtered down to the poor and the downtrodden? Is the GDP an accurate gauge of the people’s well-being, or is it just a number only accountants understand?
Remember that GDP as an economic indicator was thought of during the Great Depression in the United States, and served as a planning tool during the last World War. Its main purpose was to motivate industrial production. It only officially became an instrument to measure the United States’s economic activity in 1949 after proving its usefulness during the war.
What was established as a gauge to measure market activity has now become a tool to quantify economic wealth and human welfare. But this is not the spirit by which the GDP was designed for. As early as 1934, its creator, Simon Kuznets, had warned about GDP’s limitations. He believed then that the GDP was a faulty tool to measure human welfare and well-being. This issue is highly contentious. Economists clash. Some of them are of the notion that we should not worry about development, but, instead, train our sights only on growth. By doing so, development automatically ensues. Others believe that we should concentrate on development primarily, and see growth as a means to development. For me, GDP as a gross measure of total output cannot discriminate between good and bad.
Economic growth is basically only number-crunching. It details how much money changes hands in the economy. Growth can be had if the value and number of commercial dealings grow in the economy. If you cook your own food at home, the GDP doesn’t increase, but it does when you dine out. Raising your own children will not affect GDP, but it will if you entrust them to a day-care center.
Here is another example: If loggers flatten a forest and sell the timber, what they earn adds to GDP in the current year, but ominously diminishes the chance the economy can have in the future. This only indicates that GDP does not distinguish between diminishing assets or spawning incremental wealth.
Also, crime pushes up GDP. It enhances fiscal transactions because you have to hire guards, buy security systems, purchase insurance, pay lawyers, build prisons and so on. These economic activities raise GDP but are counteractive. GDP only reads the economic growth from these activities, but does not see the tension and uncertainty that crime brings.
Development, on the other hand, could be subjective. It is a very political term, which has a variety of meanings for different people. For me, development should boost the quality of life of all the members of society. We all have potentials and capabilities that would bring us success. Development takes out the restrictions that inhibit us from unravelling our respective capabilities and achieving our full potentials. Among the shackles to socioeconomic growth are poverty, illiteracy, lack of skills, bad health, malnutrition, discrimination (based on caste, gender, race, ethnicity, religion, etc.), totalitarianism and disasters (natural or man-made).
In optimizing the gains of the Aquino administration, President-elect Rodrigo R. Duterte must not only focus on macroeconomic growth. Through good governance and sound money management, he should strive to build a society where everyone is comfortable, cultured, highly skilled, healthy and well fed, and do not face undue discrimination and political repression, and are not at the mercy of natural or man-made disasters.
He has so far garnered the biggest mandate an electorate has accorded a presidential candidate. Hopefully, this will be enough for him to have the political will to effect wide-ranging positive changes in society that will help our country realize sustainable and inclusive growth and development.
1 comment
When the growth of the population slows down a bit . Go President Duterte 3 child policy option for the family.