2nd quarter growth weakest in five election years: Bold new economic policies needed

Photo by Pol Torrente

 

Research group IBON said that the 7.0% growth in the second quarter of 2016 and 6.9% growth in the first semester are the weakest in the past five election years and challenge the Duterte administration. Bold changes in economic policies are needed to achieve sustained higher growth, said the group.

According to IBON, the growth rates in gross domestic product (GDP) so far this year compare poorly with previous election years. Second quarter growth this year is lower than in 2013 (7.9%), 2010 (8.9%), 2007 (7.6%), and 2004 (7.7%). First semester is also lower than in 2013 (7.7%), 2010 (8.7%), 2007 (6.9%), and 2004 (7.5%). This indicates weaker economic fundamentals that weakened the overall impact of the election spending stimulus.

IBON added that the second quarter growth results virtually confirm the country’s economic slowdown and whole year 2016 growth is likely to be slower than the recent peak of 6.9% growth in 2013. The economy has to grow by at least 7% until the end of the year to even just match its performance in 2013. But post-election quarterly growth is usually markedly slower and there have only been two election years in the post-Marcos period, in 1995 and 2001, when growth accelerated rather than slowed, the group noted.

Recent relatively rapid economic growth has not made much of a dent n the country’s high joblessness and chronic poverty. The prospects for the majority of Filipinos can only worsen with slowing growth, IBON warned.

Farmers and fisherfolk have it worst off, the group observed. The agriculture sector has already been losing some 73,000 jobs yearly over the course of the Aquino administration and this is down to just 11.3 million. Comparable employment data for the year so far is not available but the negative 3.3% agricultural growth in the first semester could mean over a hundred thousand jobs more lost, according to IBON.

The group stressed that the Duterte administration and its economic team needs to take the long view. Beyond mere quarter on quarter or even year on year figures, the economy remains on a trajectory of exclusionary growth and underdevelopment. The administration has a convincing electoral mandate and has often expressed its bias for the poor and being unafraid of foreign and domestic elites.

These need to be reflected in a bold economic program that breaks land monopolies, gives substantial support to agriculture and rural development, and unleashes farmer productivity, said IBON. It also needs national industrialization. This means actively building and supporting Filipino industry even if this unsettles domestic oligarchs and will be opposed by foreign investors preventing the rise of Filipino industrial competition. These are needed for sustained higher growth that improves the lives of millions of Filipinos, the group said. ###

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