A question of economic growth

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When it comes to economics, most of us who do not comprehend what GDP is all about or how a calculator arrives at such percentages, just smirk and watch the world go by.  Every time, for instance, President Noynoy Aquino (who, by the way will go down the annals to be the only one who has completely stopped the proliferation of wang-wang and merited it as a presidential achievement) returns from a trip abroad and Malacañang announces the billions of dollars that he brings home in investments, most of us just brush it off—not because such investments are nowhere to be seen, but perhaps because the intricacies of investment business are unintelligible to most Filipinos.

            When Malacañang media, which is presently one of the strongest offices of the president,  announced that the country has happily crossed the threshold of 7.8-percent growth in gross domestic product by the first quarter of this year, the country should have uproared in jubilation. But it never made a dent, notwithstanding tremendous PR work.  For most, it sounded like a freak that was so incongruent with the givens of reality.   Those in the know were asking where those figures were coming from.

            Yes, where are those figures coming from?  Because how can a country attain a 7.8-percent growth in domestic product when, on the other hand, the country’s unemployment has plummeted to 7.5-percent in April 2013—the highest, so far, in three years. According to the National Statistics Office Labor Force Survey, the number of unemployed Filipinos rose to 3.09 million—an increase from 2.89 million in January, while the number of the under-employed stood at 7.25 percent of the workforce. Former Budget secretary Benjamin Diokno tersely says it all: “A fast growing economy is supposed to create more, not less, jobs.”

            The heavily hyped investment pledges that the President brings home whenever he returns from a foreign trip should be bearing fruit by now after, say, three years. But lately government finance agencies have admitted that foreign direct investments (FDI) have declined around the first quarter. Central Bank was quick to issue a justification that the decline in cumulative FDI was due “mainly to lower net equity capital investments” in the first quarter and that the FDI outflow of $78 million was a reversal of the inflow of $179 million of last year.  This financial gobbledygook sounds Greek to us, but whatever it is, one can be sure that what the Central Bank said was a tacit admittance that there really is a hitch.

Of late, on June 13 to be exact, the Philippine stock exchange index has plunged to 6.75 percent or 442.57 points that closed at 6,114.08—the biggest single-day loss since October 2008, the “worst bloodbaths” in the history of local finance market, so say economists. It was the same day that Philippine peso hit a new record low at 43.00 against the U.S. dollar.  It was also the day that traffic in Manila stood still for 6 hours due to heavy flooding, largely due to government neglect and lopsided priorities.

Perhaps it’s about time to get real and accept that the wang-wang president has failed in attracting long-term foreign investments (granting that such is really the best economic fundamental as his technocrats claim) and in creating sustainable domestic jobs for Filipinos without having to go to the Middle East or Europe and elsewhere.

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