More than common economic indicators
THE economy is performing better according to the standard measurements and the administration never fails to say so in every forum available.The Philippine peso continues to strengthen after having the second highest appreciation among the currencies in Southeast Asia. Macroeconomic performance is strong and the 7.3% GDP output last year was the highest in three decades. Inflation is under control, the government is making headway in reducing the budget deficit, and unemployment is well below double digits.
The administration must be wondering why there’s hardly any kudos from its citizens. The economy is doing so well and yet there’s no applause and a great many Filipinos are not “feeling” GMA and her administration. Are they simply suffering from adjustment anxieties, from an economy that’s just picking up? Perhaps the so-called trickle-down effect has not trickled down yet? Or perhaps the economic indicators are painting a picture that is markedly different from what most Filipinos are actually experiencing?
The Philippines continues to have a high poverty incidence according to the Asian Development Bank report titled, “Philippines: Critical Development Constraints,” and this is because of poor revenue collections and rampant corruption. These are the “critical constraints” to sustainable growth, the ADB said. The pace of poverty reduction has been slow and income inequality remains stubbornly high because of corruption.
Even government statistics show that there are more Filipinos living below the poverty line today. The National Statistical Coordination Board said two weeks ago that 33 out of 100 Filipinos were considered poor in 2006 compared to only 30 out of 100 in 2000. Not a few, of course, suspect that poverty among the populace is higher than the 30% plus stats thus provided.
How “rampant” is this corruption that leads to poverty? The independent think tank Ibon Foundation Inc. said that in the past seven years, the figure could easily reach P7.3 billion, noting the allegedly highly anomalous projects and otherwise unresolved scandals like the P720-million fertilizer fund scam, the Northrail project, P400 million plus Jose Pidal bank accounts, the Impsa power-plant project, the Macapagal Boulevard project and the ZTE-NBN broadband project.
Yes, corruption is an economic problem too—perhaps the economic problem which the political arena seeks to address. So this administration cannot just resort to the usual “let’s-move-on-and-focus-on-the-economy” argument. Neither a strong peso nor a rising GDP will lead to sustainable growth and poverty reduction if the money circulating in the economy flows only among the political and economic elite, or if it just lines the pocket of corrupt officials in government
Economic growth has many dimensions. Ultimately, a country should gauge its economy on its ability to provide its citizens with what they need to live a decent life: enough food, adequate shelter and health services, a well-paying job, leisure and family time and a good education.
The United Nations Development Programme (UNDP) came up with a way to measure or calculate more real indicators to measure growth and progress, which it called the Human Development Index, which measures things like GDP per capita, the literacy rate, life expectancy rate, school enrollment, the purchasing power of the currency, and others.
In the 2007/2008 UNDP Human Development Report, the Philippines’ Human Development Index ranking dropped to 90th place, lower than a lot of our neighbors in East Asia and the Pacific region.
Obviously the mere quantity of economic activity, as measured by a common indicator like the GDP, taken alone, says virtually nothing about whether life for the common Filipino is getting better or worse. It ignores the distribution of income and makes no distinction between workers with top-paying jobs and those workers who can barely eke out a living. It ignores the fact, for instance, that the record remittances which makes economic figures so rosy have a heavy social toll in terms of broken families. The booming mining industry which the government touts? That has environmental costs too which should count for something when you’re calculating economic balance.
Economics must be a means to an end. It is not an end in itself. Real economic growth must benefit the people. And when the economic figures are out of sync with the everyday experience of most Filipinos, the government cannot simply shrug its shoulders and say the figures are right, their (Filipinos) experience is wrong.
