Posted on 11:24 PM, December 29, 2010
Calling A Spade... -- By Solita Collas-Monsod
A very good year for the economy
All in all, it’s been a very good year for the economy. Let us count the ways: GDP grew at 7.9% in the first half of the year, 6.5% in the third quarter, and there is no reason to believe that it will slow down in the last quarter, so we’re looking at a growth performance of at least 7% for the whole year. Nothing to sneeze at -- we’ve done it at most a couple of times in the past quarter century, if memory serves.
Then there is the matter of one million net new jobs created between the two Octobers, with an increase in the proportion of wage and salaried employment, from 53.5% to 54.2% (and a decrease in both own-account and unpaid family labor) -- wage and salaried employment conventionally being thought of as "better quality" employment. The only dark lining in this silver cloud is the proportion of underemployment having also increased.
Price behaved, too. The inflation rate, year-to-November, was a respectable 3.8%.
Surprisingly, Central Government Debt decreased in absolute terms (see the NSCB National Summary Data Page which gives the latest figures -- NSCB must be congratulated for the exhaustive but user-friendly data presentations), at least from August to September 2010, although external debt increased by $2.5 billion between the second and the third quarter -- why the government borrowed from abroad when the rates are so low here is beyond me, except that perhaps the new secretary of Finance was showing off.
Net foreign direct investments also more than doubled between the second and the third quarters ($115 million to $311 million).
And while the official poverty data derived from the 2009 Family Income and Expenditure Survey has not been released, Sharon Piza, who works with Arsi Balisacan, tells me that given that the average family income of the lowest three deciles increased by 9% and that the gini coefficient (measuring income inequality) has improved, all indications point to a decrease in poverty incidence between 2006 and 2009. The Conditional Cash Transfer program was also doubled in 2010, so one can be fairly confident that 2010 will also have experienced a decrease in poverty.
The question is whether that kind of growth rate is sustainable. Now, that’s a very tall order, because we had an economic stimulus program in place for 2010 that will not be replicated fully for another six years, nor even partially for another three years. We’re talking about the election expenditures, of course.
Although no one has a handle on how much was actually injected into the economy -- the Comelec figures are sadly not only incomplete but underestimated, because no one takes the Comelec rules seriously -- we can do some back-of-the-envelop calculations.
The May 2010 elections had 17,000 positions up for grabs, including of course the top two executive positions. Assume an average of four candidates for every position (former Namfrel Executive Director Telibert Laoc, in his blog, talks about 5 to 7), and assume an even more conservative P1-million campaign budget for each candidate, and you come up with P68 billion worth of campaign expenditures -- and that is just from the private sector, all spent within the first half of the year.
For the October Barangay Elections, we’re talking about 630,375 positions. Now assume two candidates for every position, and an average expenditure of just P50,000 by each candidate, and we’re already talking P63 billion being spent on elections for the second half of the year.
A total of P131 billion worth of stimulus, that is not going to be replicated next year.
This is where the polity comes into the picture -- the honest and efficient government promised by PNoy that got him elected in the first place. The point being that the only way the country can hope that the growth and development will be sustained is by making sure that the resources available to the government are increased, and/or they are used efficiently (no waste), i.e., an honest and competent government.
What are the chances? Well, let’s take a brief look at the three branches of government, and where they are now.
The Executive Branch got off to a shaky start on fulfilling its honest-and-competent governance platform. The President’s choices for his "team," both Cabinet and sub-Cabinet, were a mixed bag: some excellent ones (e.g. De Lima, Robredo, De Jesus, Singson) some mediocre ones (no examples will be given), some whose main claim to fame is that they were classmates or sidekicks, and some whose honesty and integrity are a huge question mark from the word go. It is not surprising, therefore, that the results have also been a mixed bag: executive orders and proclamations issued without the benefit of complete staff work and which had to be redone or which suffered setbacks; the bungling of the hostage crisis, followed by an excellent investigating committee report, which was then watered down to the point of ineffectiveness; an excellent budget proposal that, however, had echoes of previous administrations’ confidential and intelligence funds, not to mention the tuloy-ang-ligaya pork barrel; a firm stand on family planning and poverty reduction strategies, but the flip-flopping on the promise to distribute the lands of Hacienda Luisita with the lame excuse that there is a pending case with the Supreme Court -- which factor (a pending case), however, did not deter the grant of amnesty to unremorseful (and even recidivistic) coup plotters. The President’s learning curve has to turn upward immediately. No more excuses are allowed.
The legislature has gotten off to an excellent start by passing the budget on time , so that the country will at least start on the right foot in 2011 instead of having to live with a reenacted budget, as it has done more often than not in the past 10 years. Its stance on the reproductive health bill is also to be commended. It will, however, have to try harder to pass the Freedom of Information Act and the Whistleblower Protection Act (as distinguished from the Witness Protection one) which are necessary weapons in the fight against corruption. However, its approval of the amnesty despite the recommendations of both the Davide and the Feliciano Commissions reflects the politics of political accommodation rather than an issue-based decision-making process. The kid-glove treatment of Senator Lacson also reinforces again the perception that our law makers consider themselves above the law.
The judicial branch has to shape up too. The Supreme Court, which is supposed to be the last bastion of democracy also has a mixed record. On the plus side, it has come out with decisions such as those disallowing the Radstock compromise, reversing the conversion of certain municipalities into cities in contravention of the law, and acquitting Hubert Webb, et al. On the negative side, there are its decisions with regard to the constitutionality of the midnight appointment of the chief justice, the plagiarism of one of its members, and the decision on the Abadilla 5 case (inconsistent with its decision on Webb). With respect to the rest of the judiciary, the slow pace of the Maguindanao Massacre hearings is giving it an even blacker eye.
And then there is the role of we, the people. If our economic growth and development are to be sustained, within the democratic setting we love so much (the 2010 elections have proved that again, so a pox on these military adventurists who think they are smarter than the people), our active participation is a sine qua non. And we can start with our barangays, where the system is as close to a direct democracy as you can get. Today, the barangays, tomorrow, the country.
May the New Year be better than this one.
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