Is the Philippine Economy Really "in the Doldrums?"

The real measure of the true state of the Philippine economy is data related to consumption.

In recent days, there is a flood of "analyses" and "expert opinions" about the state of the Philippine economy appearing on traditional and social media outlets both here and overseas. They were issued by individuals who either have little or no knowledge about economics or have "some knowledge" of economics but are severely politically compromised that anything that comes from them always lacks objectivity and is skewed towards a particular partisan agenda. The "analyses" and "expert opinions" were taking advantage of the rising prices of fuel and other commodities, the weak peso, "decreasing" exports, the Philippine Stock Exchange entering the "bear market," Chinese xenophobia and the recent statement of President Duterte, who said that the economy is "in the doldrums" because most infrastructure projects in the provinces are not moving compared to those in Metro Manila.

Unfortunately, these poisoned "analyses" and "expert opinions" were being picked up by mainstream media outlets and their social media extensions. In their usual partisan selves, they give those "experts" and "thought leaders" much coverage to paint a gloom and doom portrait of the Philippine economy, blaming everything on President Duterte and his economic managers. What made matters worse is that they did not bother to cite data or they deliberately manufactured information to back up their claim, all in the name of their partisan political agenda, and the goal of undermining the hard work and effort of President Duterte and his economic managers in managing the economy, and pursuing long overdue political and economic reform measures that will further increase economic growth and bring economic development to all corners of the country that will benefit a greater number of Filipinos.

The seemingly coordinated propaganda and disinformation campaign prompted the economic managers to respond appropriately. Budget Secretary Benjamin Diokno, one of the country's most respected economists and a faculty member at the University of the Philippines School of Economics, responded by saying that the true state of economy can be measured only through hard facts and numbers and not through impressions and perceptions. The Finance Department, through its spokesperson, Assistant Secretary Paola Alvarez, replied to the "expert opinion" that was written on a foreign media outlet by a local television station "analyst" with real numbers on foreign direct investment inflows, interest rates, peso performance and commodity prices, effectively shutting down the "analyst," causing to rant on social media like a spoiled brat, and accuse the real economists and finance experts of "being unprofessional."

If one will look at the real numbers, the stock market entering the "bear market" territory, and the weak peso, although considered as key indicators, are not really barometers of economic performance of the Philippines. Foreign direct investment (FDI) inflows are actually increasing, although not in the same rate as those being received by ASEAN countries with more pro-business and pro-foreign investment policies such as Thailand and Vietnam, hence the need for President Duterte and his administration to prioritize and fast track the implementation of long overdue political and economic reform measures that address that and other economic- and development-related concerns. The "decreasing" exports claim is actually false, as our export sector is performing well, but this is being overshadowed by an increasing demand for imported goods from both Filipino consumers and the infrastructure projects, causing the trade deficit to widen further. The weakness of the peso is actually caused by a strengthening US dollar, an effect of a mix of fiscal and monetary policies that are being implemented by the American government, and the pressure being exerted by the country's widening trade deficit. The prices of fuel and other commodities are increasing due to market forces, especially the supply of and demand for oil in the global markets, as well as foreign exchange fluctuations since most commodities and raw materials, and virtually all of the country's fuel supply are imported from other countries and being paid in US dollars, and allegations of artificial supply shortages of rice and other basic commodities due to deliberate hoarding by corrupt business people, and their cohorts within the government and the bureaucracy.

The real measure of the true state of the Philippine economy is data related to consumption. The anti-Duterte propagandists, as well as the usual obstructionists from the opposition and the Maoists, would often ride on inflation numbers to boost their political agenda. However, the prices of commodities naturally rise through time due to the influence of market forces-related factors such as supply and demand, foreign exchange fluctuations, and time value of money, which is why inflation is not that reliable.

Despite rising prices of commodities, foreign exchange fluctuations, etc., the Consumer Confidence Index of the country actually remained in positive territory. Based on statistics posted on, for the second quarter of 2018, the consumer confidence index increased to 3.8 from 1.7 during the first quarter of the year, thanks to Filipino consumers "seeing an improvement in peace and order, additional income, availability of more jobs, effective government policies, and an increase in family savings." Since President Duterte assumed office in 2016, the consumer confidence index remained in positive territory, even reaching a high of 13.10 during the second quarter of 2017. Prior to President Duterte assuming office, the consumer confidence index of the country, which we began measuring in 2007, was always on the negative, going as low as -52.80 during the third quarter of 2008, which, incidentally, coincided with the global financial crisis.

If the Philippine economy is really "in the doldrums," and President Duterte and the economic managers are mismanaging the economy, then how come the consumer confidence index remained in positive territory, and, in fact, even increasing, and Filipino consumers continue to spend and fuel the consumption-driven economy, and show confidence in the Duterte administration?

As an economist and an academician, I approve of how Secretary Sonny Dominguez, Assistant Secretary Alvarez and others at the Finance Department, and Budget Secretary Diokno responded to the compromised "experts" and "thought leaders," and their poisoned "analyses" and "expert opinions." Showing the anti-Duterte propagandists who pose as "intellectuals" and their partisan media enablers, as well as the obstructionists from the opposition and the Maoists, the real numbers should shut them up. It is time for the government, especially the Presidential Communications Operations Office (PCOO), as well as the Department of Finance (DOF), Department of Budget and Management (DBM), National Economic and Development Authority (NEDA), Department of Agriculture (DA), and the Department of Trade and Industry (DTI), to intensify and become more aggressive in information dissemination to provide our countrymen and also foreigners the real numbers that will show the true state of the Philippine economy, and effectively shut down the black propaganda and negative publicity coming from the anti-Duterte propagandists, the political obstructionists and the Maoists, and their partisan media enablers and mouthpieces.

About the Author
Benedict is an agricultural economist, academician and writer. He has gained experience and expertise in various fields of economics, business, political science and public relations after through professional ventures in the academe, and in the public and private sectors. He has authored or co-authored key publications on topics ranging from agriculture and food security to global affairs and politics.
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