Get real
Philippine Daily Inquirer, 18 November 2017


Whoa! Reader, let’s not get carried away by the news that our economy grew by 6.9 percent in the third quarter of the year, as shown by the most recent National Income Accounts. And why not? you may ask. Isn’t that great?

Let me count the ways, dear Reader.

First, let us not forget that the Philippines’ real target GDP growth rate for 2017 is 7-8 percent. That’s what the Philippine Development Plan 2017-2022 says, Socioeconomic Planning Secretary Ernie Pernia. Where did you get your 6.5-7.5 percent target that is quoted in this newspaper? As I recall, that was the target for 2014, because the targets for 2015 and 2016 were already 7-8 percent. And as you yourself say in the Plan, our growth trajectory is higher now.

Let’s do just a little arithmetic. We grew by 6.4 percent in the first quarter of this year; by 6.5 percent in the second quarter; and now by 6.9 percent. Therefore, to achieve the low end of the target for the year of 7 percent, we will have to grow by 8.2 percent in the last quarter of this year. Achieving the high end of the target (8 percent) requires that our fourth-quarter growth rate be 12.2 percent. Reader, with the best will in the world, we will not be able to achieve the low end, much less the high end, of our target. I’m taking any and all bets on that.

Okay, you may say, but growing by 6.9 percent is by itself no mean feat, because we are among the fastest growing in Asia. Well, I’ve got news for you, Reader. We grew by 7.1 percent in the first three months of President Duterte’s administration. But we couldn’t maintain it, apparently. Our growth in his second three months slowed down to 6.6 percent, and slowed some more to 6.4 in the first quarter of 2017. So we should not allow this 6.9-percent growth for one quarter to dazzle us.

By the way, the World Bank’s projected growth for the Philippines for 2017 was 6.9 percent. According to this institution, this would place the country among the top 10 (actually, No. 10) of the world’s fastest growing economies. But as I said, achieving this rate is, at the very least, problematic, given our performance in the first three quarters of the year.

The Asian Development Bank’s 2017 forecast for the Philippines was a much lower 6.5 percent. In other words, from the get go the ADB didn’t think we could achieve our target. That’s the bad news. The good news is that we are certain to achieve a 6.5-percent growth rate for this year, unless by some unfortunate turn of events, our fourth-quarter growth will be less than 6.2 percent. And Reader, to my mind, this will be most unlikely.

But the more important question is: Was the third-quarter growth an inclusive one? Meaning, did it benefit the poor? By itself, the answer is no. Why am I so sure? Because, Reader, our poor are mostly in the agriculture (including fishery) sector and in the rural areas. Unfortunately, the agriculture sector contributed only 0.2 percentage points to the 6.9-percent third-quarter growth.

In other words, the rising tide did not lift all boats. Bankers were especially benefited. Our farmers and fishers were left floundering. Thank heavens for the Pantawid Pamilyang Pilipino Program—a government policy to help the poor through cash transfers for their education and health. Can you imagine if we reduce the amount of the program in order to fund another “livelihood” program, as Joey Concepcion is suggesting? Please source your funds from elsewhere, Joey, not from the poor.

The final question is: Will we be able to achieve our growth targets (of 7-8 percent) for 2018 and beyond? I have the greatest fear, Reader, that we won’t. Our Tax Reform for Acceleration and Inclusion (TRAIN) program was mangled by the House of Representatives, and further mangled by the Senate (or rather, Sen. Sonny Angara, so far), such that the expected additional revenues needed to achieve the Philippine Development Plan will not be forthcoming.

Adding the sin taxes to this year’s TRAIN would have smoothed some snags. But alas, the tobacco and liquor lobby and their potential campaign contributions have proven to be more important than the welfare of our countrymen in the eyes of our senators. There is still time, though, for Sen. Manny Pacquiao and his allies to move. MOVE!