Is the Philippine economy doing well or not?
There has been much debate amongst government, private sector, non-government organizations and the international community on the performance of the Philippine economy, given rising levels of inflation and a weakening peso. There are various macro-economic indicators available that provide a picture on how certain sectors or aspects of the economy are doing. It is dependent on how individuals/groups with varying interests will make use of any or a combination of these indicators to predict the country’s economic performance.
Generally, all economies around the world share three common goals: (1) obtain consistent growth in terms of Gross Domestic Product, (2) achieve high levels of employment and, (3) attain price stability. Based on these parameters, we can somehow paint a clearer picture of how our economy is performing.
The country's GDP grew by 6.8% during the 1st quarter of 2018. It is important to note that the Q1 2018 figures mark the 10th consecutive quarter in which GDP grew by 6.5% or better. Based on pronouncements by NEDA and PSA, strong government and household consumption fueled this level of growth despite slow agricultural output, high inflation rates, and wider trade deficits.
If not for inflation, public consumption would have driven the GDP to be close to the government's target of about 7-8% GDP growth.
However, this level of growth still pales in comparison with countries such as Nepal, Bangladesh, Cambodia and Vietnam who boasts of higher GDP growth rates.
Two studies provide different pictures of the employment situation in the country.
Based on recent data from the Philippine Statistics Authority, the unemployment rate went down to 5.5% in April 2018 from 5.7% in the same month of the previous year.
On the other hand, the Social Weather Stations' study conducted on March 2018 reveals that unemployment in urban areas rose from the previous December 2017 survey of about 17.2% to 22.8%, and in rural areas from 14.6% to 24.7%.
Considering the country's average annual population growth rate of 1.6% and increasing participation rates in the labor force, the pressure to produce quality jobs within the country remains a serious challenge for the Duterte administration.
- Price Stability
The implementation of the TRAIN Law is said to have fueled the increase in the prices of oil, fares, rice, and other basic goods and commodities. While government claims that the TRAIN Law raised the take home pay of about 99% of income tax payers, the brunt of increased prices has weighed heavily on minimum wage earners who did not exactly benefit from the passage of the tax reform measure.
Last week, the LTFRB approved the provisional P1 fare increase for jeepneys. Other public transport groups such as UV express van, city bus and provincial bus operators have also filed petitions for provisional fare hikes.
These have prompted Senators to call for the suspension of the TRAIN Law’s implementation, amidst growing complaints of soaring prices of basic goods and commodities from various sectors.
Measuring the performance of an economy is a complex process altogether. There is no single indicator or even a combination of indicators which would accurately tell whether the country's economy is performing well or poorly.
Nevertheless, it is important for all of us to fully understand the numbers, as well as its impact to various sectors. In the pursuit of inclusive economic growth, the true measure of a successful economy still lies in the quality of life of Filipinos.