Revisiting Philippines… to Become the NEXT "Tiger (Target) Economy" in Asia?

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What does it mean when we say “tiger economy” and when can we say a country is showing a telltale sign to become the next tiger economy?

According to Wikipedia, the free encyclopedia, it is the economy of a country which undergoes RAPID ECONOMIC GROWTH that usually accompanied by an INCREASE IN THE STANDARD OF LIVING.

Introduction to the Economy of the Philippines

Considered 46^th largest in the world, Philippine economy includes exports of semiconductors and electronic products, equipment, garments, etc. Our economy trades to major countries like the United States of America, Japan, Hong Kong, Germany, Singapore, the Netherlands, etc.  Also, our economy has transitioned or let us say has been transitioning from agriculture to manufacturing and services. Of course, the industrial sector contributes most to more or less 30% of the gross domestic product or GDP and only about 13% from the agricultural sector.

This would be regarded as paradox based on the fact that Philippines is an agricultural economy.  But how come it is?  It is because of changes.  The world changes; so does Philippines.  However, ours changes backward and sickening…

Furthermore, not to mention the ballooning of unemployment rate in the country, almost everyday increase of prices in basic commodities pushed by constant oil price hikes, annual slash of social services budget including education budget, and worst, the ever rising external debt amounted to BILLIONS!

Reminiscing Our Past Economy

Way back after the second World War, Philippine economy is predicted to rise next to Japan in terms of wealth. In 1960s, Philippine economy started to slow down. During Marcos regime, our country is developing in terms of independence and self-industrialization.  However, political climates that time was in turmoil due to power grabbing, political self-interest, foreign intervention through secret exercises, collaboration, and politics cannibalism. Yet, they blame it to economic recession…

Then economic liberalization began in the 1990s.  Feedback is good, they said; our economy has recovered.  But the question is: Was that in the aspect of standard of living Filipinos have? I doubt it.  For the rich, capitalists, investors, political clans, and others involved in the so-called economic collaboration, that feedback is generally good, period.

The only certain is that the country’s external debt is promising! Because it is rising…until today!

You may ask the World Bank, the International Monetary Fund, the Asian Development Bank, and even the World Trade Organization and the G-77 among other lending and collaborating institutions for the veracity of the Philippine economy standing in the world at-large.

Reviews and Facts of Philippine Economy

Economies are ranked on the ease of doing business according to doingbusiness.org. This org said that a high ranking on the ease of doing business index means the regulatory environment is more conducive to the starting and operation of a local firm or company.

The rankings below for the economies from 2010 to present:

Economies ranking by doingbusiness.org 

(For better viewing, please click this link Ranking of Economies)

We see above that “tiger economies” like Singapore, Hong Kong, New Zealand, United Kingdom, United States of America, etc. are ranked in upper 10^th place.  However, PHILIPPINES (in-boxed) and the rest of lower ranking countries are evidently scored low in the different topics-indicators.  In other words, Philippines is ranked 148^th place on the ease of doing business –- as one of the vital indicators in branding the country’s economy.

This index averages the country’s percentile rankings on nine (9) categories that made up of a variety of indicators.

Another indicator of branding country’s economy is based on the financial system — its financial resources, the banking system, stability and financial transparency, rapid financial innovations, etc.

However, indication on this aspect is very much far from recognizing our economy as the next tiger economy in Asia! Data from independent think tank institutions and even government statistics justified the retarded growth of Philippine economy, so far…

Other indicators of branding economy are based on its economic sectors, the living condition, the national government spending, and employment.  Yet, these are, again, too far to consider that Philippine economy would become the next tiger economy in Asia!  Data, again, can suffice this no-need-argument…

Importantly, these factors are vital signs as indicators of the status of country’s economy.

Pres. Benigno Aquino III (Photo from noypi.ph)

First Year of Aquino Administration

According to IBON*:

“The government reported 4.9% growth in real gross domestic product (GDP) in the first quarter of 2011 which was markedly slower than the 8.4% rate in the same period last year. Consecutive quarters are not strictly comparable but it can still be noted that the first three quarters of the Aquino administration has seen progressively slower growth year-on-year –- from 8.9% in the second quarter of 2010, 7.3% in the third quarter, and 6.1% in the fourth quarter, followed by the 4.9% in the first quarter of this year.

According to the national income accounts, compensation of overseas Filipino workers has been stagnant (measured at current prices) or even declining (by 3.9%, measured at constant prices). The compensation inflow item net under net factor income from abroad – now called net primary income – refers to total earnings of overseas Filipino workers and not, as is commonly misunderstood, to their remittances.”

However, Aquino government reports the falling unemployment rate from 8% in April 2010 to more than 7% in April this year. I doubt with this invention!

Filipinos over the country do not feel as there is alleviation in their lives as evident as the falling rate of unemployment in the country is concerned.

Yet, the only fact is that joblessness in the country forced more and more Filipinos to work overseas! The falling unemployment rate figure is likely speechless about this…or farcical to boast for!

Wages remain pegged at pitiful amount of PhP426 in the National Capital Region.  Amid Aquino government press releases that Philippines is recovering…but wait, in what aspect?  Maybe in foreign investors aspect, in business capitalists interest aspect, or in their own businesses aspect, what else?

According to IBON:

“Debt service and the public debt stock have continued to rise. It paid Php634 billion in debt service between July 2010 and April 2011 which is Php8 billion more than in the equivalent previous period under the Arroyo administration. These payments over its first ten months also already exceed payments for the whole year of 2007, 2008, and 2009 respectively (and of the first two years combined of the Arroyo administration). Yet the national government debt stock has continued to rise from Php4,582 billion in end-June 2010 to Php4,706 billion in March 2011.

The Aquino administration [actually] continues the distorted fiscal priorities of the Arroyo administration. It keeps relying on the regressive 12% value-added tax while refusing to increase taxes on the rich, to roll back revenue-losing trade liberalization, to lessen fiscal incentives for foreign investors, and to cut back on military spending (up by Php4.2B at Php77.5B) and huge debt service (up by Php80.4B to Php823.3B).”

Now, what else can we say to justify that Aquino government’s economy is soon to become tiger economy in Asia!  How I laughed at this hearing and reading news reports about this expectation that is impossible to come!

Conclusion

Filipinos are not damn to believe the foretelling stories of foreign business tycoons, experts, and leaders that the country is expected to become the next “tiger economy” in Asia. Well, at least, they are optimistic about it, since they are likely joking with their own miasma of success stories!

Could the leadership of Aquino promise to weed out corruption in the country? Whose world are we living in? Is that exclusively his? Is five years enough to reap the gain of the impossible battle cry? This is another child’s plea. Repeat the martial law; declare it bold, for this to realize anytime soon! Yet, remember, Filipinos resist to martial law…

Could the country’s wealth of human resources enough to alleviate their living condition and the country as well?  Well, the government must refocus its economic policies and political inclination to the business institution, instead to the interest of the common people – the masses! Until today, although the country has earned foreign investment, that fact, instead tortures Philippine employment in terms of cheap labor force!  The reason why capitalists, local and abroad, race to the country in search for cheap labor cost…

Could the country’s center of excellence pride satisfy Filipinos’ living condition again?  Definitely no!  Unless the government will refocus, re-modify its economic policies, strengthen labor laws, and repeal trade liberalization  and deregulation laws only Filipinos can be proud of their center of excellence pride and recover from the stagnant living condition because of cheap labor and anti-labor laws and practices that business perpetrators are constantly take advantage with impunity!

(Photo inside from pueblophilippines.com)

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*IBON Foundation, Inc. is an independent development institution establishedin 1978 that provides research, education, publications, information work and advocacy support on socio-economic issues.

Suggested further readings:

1. Economy of the Philippines by Wikipedia
2. Ranking of Economies by doingbusiness.org
3. IBON Feature: The Philippine Economy…