QUEZON City, Philippines (November 14) – A lot has been said about the state of the Philippine economy after the first 100 days of President Duterte’s Administration.
Critics were quick to say that the economy has weakened.
Shuli Ren in his article in Barron’s Asia website cited the 0.6% drop in the Philippine Stock Market right after US President Obama cancelled his meeting with President Duterte following Duterte’s harsh remarks after the media asked him what his reaction would be if President Obama would confront him about his way of handling of drug dealers including the so-called extra-judicial killing.
Another article, this time from Business Mirror attributes this decline in investment interest in the country to the “internal headwinds” caused by President Duterte’s acerbic tongue. Some of the critics even fear that the new president might undo the economic gains of recent years.
On the flip side, there are also good things happening to our economy under the new administration.
The Asian Development Bank has raised its 2016 GDP forecast for the Philippines from 6.0% to 6.4%. There are also hopeful individuals who positively believe that the Philippine economy is on the right track under the new administration.
Prominent names from the business community have expressed their support and confidence to the leadership of the new President.
An article from the Manila Bulletin cited some of the vocal supports that the new president has received. Zest-O Corporation Founder Alfredo Yao was quoted saying “For the first time, we have a President who has the courage and the political will to do it”. Philippine Exporters Confederation, Inc. President Sergio Ortiz-Luis said that they’re glad that the new president “is not wavering at all to criticisms”. Philippine Daily Inquirer also quoted San Miguel Corporation President and CEO saying ““Mark my word: This country will fly. This country will be a better place for our children and grandchildren because the drug problem will be eliminated under Duterte,”
So which side is the more accurate representation of the Philippine economy under the new administration? Is President Duterte really doing harm to our economy, or is he doing the thing to bring economic growth and stability?
In my humble point of view, the time isn’t just ripe yet. It is too premature to answer these questions. None of the numbers they use to argue can be considered as infallible representation of President Duterte’s performance in managing the economy. For one, the 0.6 drop in the Philippine Stock Market can be argued to be caused by some other external factors.
As Congressman Nograles explained in one of his statement, “global market forces are the main culprit as investors are “influenced by the anticipation of monetary policy tightening in the US that prompted portfolio investors to reconfigure their portfolio allocations”.
The other side can likewise argue that ADB’s improved GDP Projection for the Philippines cannot be credited to President Duterte’s performance but, as Villanueva, via Business Mirror wrote, it is due to “the strong economic fundamentals painstakingly nurtured by the previous administration”.
In evaluating President Duterte’s performance from an economic perspective, one cannot completely and fairly give a sound assessment by simply associating what he said to the random movements of the market or by the changes of forecast by certain agencies. It is imperative that we look closely at the administration’s 10 Point Economic Agenda. The 10 Point Economic Agenda clearly articulate President Duterte’s economic priorities, to wit:
- Continue and maintain current macroeconomic policies, including fiscal, monetary and trade policies.
- Introduce progressive tax reform, and more effective tax collection, indexing taxes to inflation.
- Increasing competitiveness and the ease of doing business, drawing upon successful models used to attract business to local cities such as Davao, as well as pursuing the relaxation of the constitutional restrictions on foreign ownership, except with regards land ownership, in order to attract foreign direct investments.
- Accelerating annual infrastructure spending to account for 5 percent of the gross domestic product, with public-private partnerships playing a key role.
- Promoting rural and value chain development toward increasing agricultural and rural enterprise productivity and tourism.
- Ensuring security of land tenure to encourage investments and address bottlenecks in land management and titling agencies.
- Investing in human capital development, including health and education systems, as well as matching skills and training to meet the demands of businesses and the private sector.
- Promoting science, technology and the creative arts to enhance innovation and creativity toward self-sustaining and inclusive development.
- Improving social protection programs, including the government’s conditional cash transfer program, in order to protect the poor against instability and economic shocks.
- Strengthening the implementation of the Responsible Parenthood and Reproductive Health Law to enable, especially, poor couples to make informed choices on financial and family planning.
These economic agendas have been hailed by many, and have received the support of several sectors.
For now all these things looks good in paper and the success of its implementation will depend on how effective would the government’s implementation be and the level of support we Filipinos will extend to make things happens.
At the end of the day, real progress is the one that can be seen and felt by common “tao” in terms of employment rate, decent shelter for the ones who deserve it, food for every family, and adequate social welfare for everyone.
If we truly love our country, let’s start by committing ourselves to do what we can do to our country to make this happen, rather than rant and demand, and wait for the government to do something for us.
Sources:
http://blogs.barrons.com/asiastocks/2016/09/06/philippine-stocks-tumble-after-obama-cancels-meeting-with-duterte
http://www.businessmirror.com.ph/the-economy-under-duterte/
http://www.economist.com/news/asia/21707167-new-president-may-undo-economic-gains-recent-years-sceptred-bile
http://www.philstar.com/business/2016/09/28/1627982/6-6.4-year-imf-adb-hike-philippine-growth-forecasts
http://www.mb.com.ph/business-supports-duterte/
http://www.philstar.com/business/2016/06/20/1594827/duterte-magic-10-point-socioeconomic-agenda
(written by Francis Albuen, edited by Jay Paul Carlos, additional research by Vince Alvin Villarin)