The Philippine economy grew 6.6 percent for the full year 2012, surpassing even the government’s own target of between 5 percent and 6 percent.
On Monday, the Philippine Stock Exchange Composite Index hit its 14th record high this year, closing at 6,435.98. Value turnover was P9.96 billion.
These developments appear to support President Benigno Aquino III’s pronouncements that the Philippines is emerging from its previous consignment as the basket case of Asia because of the reforms instituted by his administration.
Even his predecessor, former President Gloria Arroyo, who is now on hospital arrest on allegations of plunder, acknowledged that these gains were “welcome news” for the Filipino people.
It is easy to get heady about these nominal achievements, especially when one has the numbers to back one up. The stock market rally, specifically, is seen as a barometer of investors’ enthusiasm about the health of Philippine companies and the overall business climate in the country.
The better-than-expected output growth, on the other hand, is described as “broad-based” and was, from the supply side, “fuelled by the robust performance of the Services sector led by Trade and Real Estate, Renting & Business Activities as well as the substantial improvements of Manufacturing and Construction.”
On the demand side, domestic consumption, government spending, “the recovery of capital formation and the remarkable performance of the external trade contributed to the healthy growth of the economy.”
But even as the numbers are encouraging, the Palace must acknowledge that expanding the economy merely forms part of the long process of addressing the country’s economic woes.
The GDP measures aggregate output but does not reflect how income is distributed across the various segments of the population. Domestic consumption, fuelled by the earnings of migrant workers— despite their remittances’ shrinking peso value due to our currency’s strength—hardly creates any new activity that sets in motion a virtuous cycle of production.
And then, stock market investors can just as easily pull out their funds at the first signs of trouble. Commitment from those pouring in direct investments —establishing factories, hiring Filipinos—still pale in comparison to the direct investments in other countries in Asia.
Instead of gloating and congratulating itself, this administration must ensure that these gains would not be fleeting. It should, for instance, stop believing that the only way to address poverty is by handing out monthly dole. Only jobs can assure these families of recurring income and opportunity for advancement. Similarly, investments can only come in with more consistent laws and their even implementation.
Welcome news, indeed, but hubris and complacency may turn these developments into history before more Filipinos can partake of their benefits.