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Economic growth under Aquino

Filipino consumers, not the economic planners and economists of President BS Aquino III, are responsible for the strong growth of the economy during the first full five years of his administration.

Outgoing Economic Planning Secretary Arsenio Balisacan says the 6.2-percent average economic growth during Aquino’s first full five years is the highest in the past 40 years.

What he doesn’t say is that even if Aquino were not the president, or any other person were the chief executive, the economy would have done as well, growing at 6.2 percent average in five years.   If Aquino had not been the president, economic growth rate would probably have been higher.  Consumption would have been accompanied by investments—in crucial infrastructure.

The lack of investments in infra like roads, railways and mass transit has gridlocked Metro Manila, which accounts for 34 percent of total economic production.  Some P2.6 billion is lost daily due to the capital’s horrendous traffic and yet, Aquino’s men are not at all worried.  “It’s not fatal,” Transportation Secretary Jun Abaya once said. Aquino himself and his spokesmen make it appear traffic is a sign of progress.

It’s like saying rising murders are a sign of progress because they indicate a strong demand for guns and since guns are part of industrial manufacturing, murders are also good for industry.

So bad is the traffic that pollution has worsened. To cover that much pollution, number.com estimates each commuter would need 28 trees each year to produce the oxygen to make up for the pollution.  Half of Metro Manila’s pollution is produced by cars caught in traffic.

Back to Filipino consumers.  Household expenditures account for 72.4 percent of the economy. That is equivalent to P9.154.4 trillion or 72.4 percent of P12.642-trillion GDP (gross domestic product) in 2014, and P9.796 trillion or 73.7 percent of the P13.285 trillion GDP in 2015.

Nearly P74 of every P100 output of the economy comes from consumption—money you and I spend for food, electricity, cellphones, transportation, shopping, travel, and purchases of so-called durable goods like cars, TV sets, and other equipment.

If you have money to spend, do you credit Aquino for that?

No. Because unemployment has remained very high. About seven million Filipinos have lousy jobs and cannot find any better work.  These are the so-called underemployed. Nearly three million Filipinos really have no work.

Because having a job is the best way to fight poverty, and unemployment has remained very high, poverty has remained very high—about 25 of every 100 Filipinos are poor, meaning they make only $1.25 a day. What is $1.25 a day?  That is P58.75. That will buy the cheapest Jollibee burger. But then after eating the burger, you cannot go home because you have no more money. You cannot use your TV, if any, because you cannot pay for electricity.  You cannot go anywhere, simply because you have no money.   You cannot even drink safe water because water costs money.

So what do you do?   Praise Aquino. According to the Social Weather Stations, majority of Filipinos are satisfied with the President. Why?   Because majority of Filipinos are really like that.  They are stupid.  They don’t know any better.   

So rather than curse like what Rodrigo Duterte does, they pray.   They like Pope Francis who likes the poor. Since Pope Francis likes the poor, the people feel good. Pope Francis also teaches you should like your fellowmen. Even people like Aquino.   So people like Aquino.

Consumption—by households—is the mainstay of the economy. The economy (measured by GDP or the value of the output of goods and services) has been growing at an average of 6 percent per year under BS Aquino III not because he is an economist or that he is a good president.  In fact, the opposite is true. 

If BS Aquino, who studied economics, were a little more hardworking, a little more sympathetic to the plight of the people, and a little less divisive, the Philippines would have been truly the tiger economy he claims the country has become.

In the last six years of President Gloria Macapagal Arroyo, an economist, growth was a stellar 6.5 percent, achieved despite the worst global recession, in 2008 and 2009 when Philippine growth rate faltered, to 4.2 percent and to 1.1 percent, respectively, after rising 6.6 in 2007.

Aquino never faced a recession, except in the talent and intelligence of his cabinet and the rest of the government bureaucracy.

Yet, in his first full year as president, in 2011, BS scored a home run, a scintillating growth rate of 3.7 percent, after coming from a whopping 8.65 percent growth rate in the first half of 2010—the last semester of Mrs. Arroyo, and 6.7 percent, in July-December, the first six months of Aquino III.

Why did growth collapse to 3.7 percent in 2011 from the whole-year growth of 8.2 percent in 2010?     Incompetence. Aquino didn’t spend some P149 billion money intended for infrastructure, for two reasons—he thought it would be stolen anyway and he really didn’t know how to spend it.  Every time you don’t spend, you harm the economy.

To window dress the figures and to show that he is indeed a good economist-president, Aquino’s statisticians keep on adding the whole growth rate of 8.2 percent in 2010 to the 5.85 percent average growth rate in   his first full five years     in office (2011 to 2015)     to show an average growth of more than 6 percent, or 6.2 percent.    

How do you make it appear that growth under Aquino was above 6 percent? Simple, add 8.2 (the growth in the whole of 2010) and 5.85 (the average of five years, 2011 to 2015), you get 14.05. Divide 14.05 by two, you get 7.025 percent. You then claim that this is the highest five-year growth since the 1970s. This is the claim of BS Aquino III’s statisticians.

Even if you add only the second half of 2010 growth of 6.7 percent plus the 5.85 percent during 2011 to 2015, you still get an average growth of 6.275 percent. But the growth rates of 7.3 percent and 6.1 percent in the third and fourth quarters of 2010 should still be credited to the spillover effects of reforms under Arroyo.

The first six months of a president (July-December in Aquino’s case) is usually a learning period and nothing concrete could be done. The highest quarterly growth rate under President Arroyo was 8.9 percent—in the second quarter of 2010; her second highest, 8.4 percent, was achieved in first quarter 2010.

In contrast, Aquino’s highest quarterly growth rate was 7.9 percent in the second quarter of 2012. Since then, GDP growth has steadily declined, reaching a low of 5.2 percent in the first quarter of 2015, before making a technical correction at 5.6 percent in the second quarter and 6.1 percent in the third.    

Average GDP growth during the first three quarters of  2015—a disappointing 5.6 percent. 

With fourth quarter (October-December) growth below 6 percent, the whole year 2015 growth was 5.8 percent, the lowest since the 3.7 percent growth in 2011, Aquino’s first full year, and the lowest in four years, since the 3.7 percent in 2011.    

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Topics: Tony Lopez , Economic growth under Aquino
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