Take it from the experts. Reports have it that the International Monetary Fund which researches and analyzes global economic indicators of its 157 member countries has adjudged our slower second quarter growth rate as “respectable.”
No less than IMF Resident Representative Yongzheng Yang said: “The Philippines’ growth momentum remains intact even as economic expansion slowed to six percent in April-June.”
Yang said: “The Q2 growth number was indeed below market expectations, but six percent is still a respectable growth rate considering the external pressures on the economy. GDP growth slowed from the downward revised 6.6-percent pace in the first quarter due to slower expansion in consumer spending and exports, although this was offset by a surge in state spending.”
Compare this fact-based, objective analysis of our situation with that of the doomsayers in our midst who have made it a habit to exaggerate even the littlest downward tweak in the forecasts and extrapolate the same to the hyperventilated reaction of the Manangs to the slow distribution of cheaper NFA rice, the increase in prices of GG and meat in some talipapa advised as “soaring,” the exaggerated claims of the pseudo-economists of the negative impact of the TRAIN Law and even the expensive Chinese loans.
Of course, as these guys are wont to argue, the defenders of the status quo such as the likes of Yang and his colleagues in the World Bank, ADB and the big private banks will always take the sunnier view as in “the glass is half full”versus those holding fort in ground zero (take that to mean the millions out there who are “suffering” from what they term the economic maelstrom) who are about to be convinced that the “glass is half empty.”
We are not about to suggest that the latest slowdown brought about by a number of pressures, in and out of the local economy, has not had a negative effect on the situation of millions of our countrymen who labor day and night to make both ends meet. We feel their pain. But to describe the situation in such gloomy terms to the extent of suggesting that we are a candidate to be the Venezuela of the Asia-Pacific region is much too much. We are light years away from becoming one.
For one, our inflation rate at 5.6 percent while reportedly the highest in almost a decade is not even a tiny, tiny, tiny speck of a figure compared with that of Venezuela’s reported 1 million percent. There has been a spike in the prices of rice and other basic commodities as well as oil and transport but there is no shortage of food, medicine and other necessities as in Venezuela. We are not also experiencing black outs and the protest marches which have become daily occurrence in Caracas, the Venezuelan capital, and other cities in that country has not visited Manila and other urban centers.
Our situation is far from perfect but we are moving forward with such respectable showing. Better still, we are getting credit from the IMF and other global institutional monitors for the economy’s resiliency and our fast action in stabilizing our situation.
No less than the latest survey of 2,500 business leaders across 32 economies during the same quarter on which economies the group is most optimistic about has adjudged the Philippines as number four after
Indonesia, Netherlands and Austria. We even bested China and the other members of the G-7 leading Western economies including the US, Germany, Japan, France and the UK.
But, as the IMF itself noted, we have to work even harder to get our economy on even keel as we move on. In that regard, the fund has prescribed a number of measures which would put us back on track to a higher level of respectability.
Said Yang: “To accelerate GDP growth, significant structural reforms are needed to increase productivity, alongside scaling up infrastructure investments and on social services, particularly health and education….Thus the need for succeeding tax reform packages, opening up more industries to foreign investments by relaxing the “negative list” of sectors restricted to foreign participation, as well as replacing import quotas for rice with regular tariffs and an overhaul of the current tax incentives regime.”
On the other hand, the latest IMF study mission to the Philippines which finished its report last month backed the proposal for the government to maintain the fiscal deficit at 2.4 percent of GDP this year and for the Bangko Sentral ng Pilipinas to take forceful action to address inflationary pressure by raising the policy rate by another 50 basis points and continue to tighten policy rates to rein in negative expectations.
All of these prescriptions coupled with the latest discussions on the best way to work sustain the momentum with a responsive and responsible 2019 national government budget should lift the gloom and, as the IMF said, lift the economy even higher beyond respectable.”‹