Trend of slowing economy and shrinking production persists precisely because the government has merely continued to rely on foreign markets and capital to push growth
Despite recent claims made by Malacanang on the improving economy, the anticipated economic slowdown in the second quarter of 2015 affirms the trend of weakening economic growth. According to research group IBON, the growth figure shall be the lowest in four years.
The group added that this indicates further that economic growth shall remain unsustainable and shallow as the Aquino administration continues to rely on external factors instead of building and fortifying the local economy.
National Economic and Development Authority (NEDA) Director-General Arsenio Balisacan recently narrated that second quarter gross domestic product (GDP) would most probably not have expanded by 7.7% during the second quarter nor grown as much as it did in the same period last year at 6.4%. The GDP needs to expand by 7.7% from the second to the fourth quarter in order to fall within the 7-8% GDP growth full-year target.
Balisacan partly attributed slackening growth to slower exports. Recent official data showed exports contracting in April to June this year. Total value of exports for the first semester of 2015 fell to US$28.8 billion from US$30.2 billion for the same period last year.
Balisacan likewise said that manufacturing was weaker in June this year: in terms of value, it registered a 7.3% contraction compared to a 10.1% growth in June 2014. In terms of volume, manufacturing declined by 3.6% compared to a 12.7% growth in June 2014.
IBON pointed, however, that these have been the overall trend in the economy’s production base. The share of manufacturing in GDP has consistently fallen in decades and continued the slide during Aquino’s term, from 21.4% in 2010 to only 20.6% in 2014. The share of agriculture in GDP has also shrunk to its smallest, from 12.3% in 2010 to 11.3% in 2014.
Government expresses optimism that the following semester will see more rapid growth in foreign investments, stronger exports, and higher confidence in the business and consumer sectors. Yet, this trend of slowing economy and shrinking production persists precisely because the government has merely continued to rely on foreign markets and capital to push growth instead of giving ample support to domestic industry and agriculture, said the group.
For the economy to have sustainable and profound growth, economic policy must be shifted to support domestic production base and local resource mobilization and veer away from pro-foreign and globalization-inspired goals. Instead of hyping to revive its fading economic miracle, the Aquino administration must focus on genuinely improving the economy’s fundamentals, IBON said.