"We’d really like to know what the score is at this point."
"We’d really like to know what the score is at this point."
We’re not out of recession. That’s according to economist Cielito Habito in his latest column in another broadsheet. Habito was the Ramos administration’s Economic Planning Secretary and concurrent Director-General of the National Economic and Development Authority, so he knows whereof he speaks.
The Duterte administration’s economic managers had gloated earlier this week that the economy is out of recession and poised for recovery, having grown by 11.8 percent in the second quarter this year.
But experts pointed out that the second-quarter GDP is 1.3 percent smaller than the economic output in the first three months of this year. The 11.8-percent GDP growth was computed based on the record 17-percent decline in the gross domestic product (GDP) last year. Hence, actual GDP growth so far is much less than what the government claims.
Socioeconomic Planning Secretary Karl Kendrick Chua asserts, however, that the government has been able to achieve a better balance between addressing COVID-19 and the need to restore jobs and incomes. National Statistician Dennis Mapa has reported that the industry sector grew by 20.8 percent, reversing the 21.8-percent drop a year ago. Services also reverted to 9.6-percent growth from the 17.1-percent decline last year. In the case of agriculture, the second quarter’s 0.1-percent contraction reversed last year’s 1.6-percent growth.
Senate President Pro Tempore Ralph Recto disputes the government’s rosy predictions. He believes that the economy would grow by only 4 percent for the whole of 2021 and take one or two years to return to its 2019 levels.
Rep. Joey Salceda, while concurring with the assessment that the country has already emerged from economic recession, qualified his stand by saying that this is “no indication that people are having it easier economically…If we are able to stop Delta (variant) in its tracks and avoid the kind of surges Indonesia and other Asean neighbors are experiencing, we will perform very strongly in the second half of 2021.”
Chua had earlier warned that the economy stands to lose at least P150 billion per week with Metro Manila and other areas placed under the strictest quarantine measure to cope with the expected spread of the more transmissible COVID-19 Delta variant. He has actually revised his earlier estimate of P105 billion in losses per week to P105 billion as the government added more provinces under Enhanced Community Quarantine (ECQ).
The ECQ classification, per NEDA’s estimate, would result in lost production output of about P150 billion per week affecting more than 600,000 workers and will increase the number of poor by about 250,000.
These figures indicate a huge jump from the 177,000 additional poor people and 444,000 more Filipinos without jobs as earlier projected.
However, Chua maintained that the adverse economic impact can be partly reversed if the lockdowns are properly used to accelerate vaccination of Filipinos, especially in high-risk areas.
“While the ECQ is expected to slow down economic activities in August, this is an investment towards a strong recovery in 2021,” Chua said.
So what can we expect in terms of the economy in the remaining 10 months of the Duterte administration?
For Finance Secretary Carlos Dominguez and NEDA chief Chua, the emergence of the COVID-19 Delta variant has prompted the government to prioritize containing the spread of the more contagious virus through more proactive quarantines in high-risk areas and an accelerated vaccination program, so that economic gains in recent months can be sustained.
“Since January 2020, net job creation has totaled 2.5 million, indicating that the economy has exceeded the pre-pandemic employment level after losing 8.7 million jobs during the height of the quarantines in April 2020. Despite the increase, the underemployment rate is still much lower than the figures recorded in the first four months of 2021. Lower underemployment rates in recent months point to improving job quality as restrictions in the economy were relaxed,” they said.
In fact, the country’s economic managers give themselves a pat on the back with a grade of 85 out of a possible 100 in their report card.
That’s because of the tax reforms enacted so far along with the implementation of big-ticket infrastructure projects under the ambitious Build, Build, Build program.
Three pending bills aimed at relaxing restrictions on foreign capital are seen to generate more jobs and accelerate economic recovery. These are the proposed amendments to the Public Service Act, Retail Trade Liberalization Act and the Foreign Investment Act.
But what we’re interested in finding out straight from the mouths of our economic managers is how we’ve been performing in terms of fighting poverty.
Have more Filipinos been lifted out of poverty since 2016? We understand that the target was to bring the poverty rate down from around 22 percent in 2016 to just 16 percent next year. While the COVID-19 pandemic may certainly have wreaked havoc on attaining this target, we’d really like to know what the score is at this point.
