For quite a long time market analysts asked why the Philippines was doing so poorly as such severely contrasted and its less talented, increasingly tigerish neighbors. As of late, they have thought about how it was doing as such well. The economy has developed energetically, without unfortunate expansion or a lot of getting from abroad. Furthermore, it has done as such regardless of dormant speculation, lousy foundation and a tight assembling base. Market analysts have since quite a while ago encouraged it to “stroll on two legs”, extending industry as opposed to putting all its load on administrations. Rather it has continued jumping—however with great speed and equalization.
Today, many of us had felt the sudden surge of prices and it’s painful sting in our daily budget. This means that no matter how much work it as if we’re working less for the same amount of price. The truth is that our income is now totally eroded that we couldn’t even barely afford buying basic commodities for our family or the usual jeepney or bus ride.
Why are we having all of these problems in the first place?
Did we not elect Duterte to make ‘Change’ a reality? And that finally — we can see radical reforms to build our country up and increase our economic vitality then lift each other up from poverty? Is this not why we elected him? Is this not what he promised to us?
What has 2018 really been for our economy?
Now, I’m going to enumerate JC Punogbayan’s observations on how our 2018 fared economically under the Duterte administration. As you know JC Punongbayan is a PhD candidate at the UP School of Economics. So he really knows his stuff and explains it in great detail. You may want to read the original article here.
So now let’s start
1) Duterte could have fixed inflation but he didn’t.
So what does this mean? It means that the government has all the means to control the inflation simply ticking off the implementation of excise taxes which also has created greater inflationary pressures to the prices of goods and basic commodities.
Prices of goods in 2018 has been highest in almost 10 years!
Try to take that in for a moment. We’ve experienced the highest surge of consumer prices of basic commodities and consumer products for almost a decade. And that is really really worst. Since our income were still too low to keep up with these inflation rate and thus causing many people from being more financially deprived than they already are. This isn’t good news for anyone.
From just 3.45% in January, inflation shot up to 6.7% in September, the highest in almost a decade. This started when Duterte introduced the so much criticized TRAIN Law which puts excise taxes on vital fuel products used by many industries to move their goods all around the country. Of course, these companies needs to offset the cost and increase the prices of their products and services. Thus the leap in inflation rate.
2) Rice mismanagement
For the first time in 1972. Our NFA rice-stocks is at as close to complete depletion. Gone. Nada! And all of this just started going downhill the moment President Duterte assumed office! No kidding.
NFA rice stocks (denoted by the orange line) have deviated from the rest and plummeted at an alarming rate. By early April 2018, NFA rice has essentially been “wiped out” in warehouses and markets nationwide.
So what happened? Where did all the NFA rice go? Well.. Well.. you guessed it right. This is because a Duterte appointee Jason Aquino diverted 10.4 million kilos of NFA rice from Region VIII and sold them to select rice traders in Bulacan.
3) Very weak economic growth and Build Build Build?
Using the graph below. It shows that our GDP growth has consistently slowed down during the third quarter and this December it’s down to 6.1%. Did you know this is slowest pace in GDP Growth since mid-2015? The government’s target for this year is a GDP Growth of 6.5-6.9 ish and somewhere around 2019 it should rise to about 7%
However, many economists expressed their doubts on the Philippines economic future. According to Fitch Solutions
“The slowdown in private consumption and investment growth was in line with our view, and we continue to expect both GDP components to perform poorly over the coming quarters,” Fitch Solutions
As much I do not wish to be very pessimistic but it’s perfectly clear that many Filipinos right now are no longer spending just as much as they used to before in say 2015 or 2016. In fact, according to a recent survey conducted by the Banko Sentral shows that business and consumer confidence dipped last quarter, due uncontrollably high prices of goods which eroded many of the people’s income. On top of that, the increased prices of goods and services also affected many of the businesses high overhead cost.
Did you know that Duterte’s P8-trillion Build, Build, Build program. Since November this year. There’s only been 10 of out of 75 approved projects for Build, Build, Build have started construction. Remember the keyword there? It says ”started” construction. So most of the projects which Rodrigo has been cuttig ribbons since 2016 until now were mostly from his predecessor President Aquino. In short — ”Credit Grabbed”.
3) Philippines 2019 Economy and beyond is looking dark
Many businesses both local and foreign enterprises expressed their grave concern on Duterte’s human rights abuse, worsening corruption, defective tax reforms etc. This has affected business confidence which is as evident to a sudden dip of foreign investments since 2016. Also, the worsening inflation keeps consumers from spending more of their money. It made it difficult for businesses to grow and expand as consumer confidence deteriorates.
For the sake of compendium we can add up his brazenly ignorant attack on companies in the field of (media, telecoms, airlines) simply to either gain bribes, wipe them out or destroy the competition in favor of his cronies. All of these compounded and puts many businesses uneasy to invest in Duterte’s Philippines.
This coming 2019, businesses wouldn’t be so happy. Since the passage of TRAIN Law TRABAHO is now ready to be implemented. Which means that it will impose fresh new rounds of excise taxes and the sudden leap of price hikes. Removing tax-incentives which will result to closure and pull-out of many businesses resulting to widespread loss of jobs. I could only anticipate will this be received by many of our Kababayans. Will they still glorify Duterte? Despite all of these needless sufferings? Or we do have just humble and meek and allow him and his circus freaks to run the country of the precipice of economic destruction. I don’t know about you. But for as long we are doing part. Criticizing and demanding our government to reconsider and think this this through. And for as long as government chose to not listen in our cries. Then we will continue to make these noises.
Mind you. These economic mishaps are ”self-inflected”. These are not necessary. The extra taxes imposed on fuel is not necessary. We can live without it. If Duterte can just improve BIR’s tax collections and kick out corrupt politicians in his cabinet then our country could be well. But Duterte simply isn’t listening. He’s making all of these blunders with the thought that many Filipinos simply do not care or just easily forget about it anyways.
Our last and only weapon is ”Vote” them out of the Congress. Let’s all be more responsible now more than ever to only vote for politicians who will put our country in the right track. Not because they are famous? they are rich? they are funny? or handsome/beautiful?. We need politicians who serves not performers in a bar. So perhaps, this time around. We will be more responsible.
The country is going deeper and deeper into the unknown. If we let it continue then don’t be surprised. We’ll all sink with it.