DROWNED by the political noise caused by Du30 and his people’s erratic behavior and unsavory antics is the imminent danger posed by an impending economic meltdown. Mocha Uson’s “i-pepe, i-dede” blunder has obscured a category 5 economic storm about to hit country and distracted people’s attention from this real threat.
Recent economic figures are sounding the alarm bells. If Filipinos are not alert and will not act to avert the looming economic disaster, Philippines will likely become the Venezuela of Southeast Asia.
Second quarter Gross Domestic Product (GDP) is out and the figure is not very reassuring to Filipinos. In the second half of the year, Philippine economy grew by 6 percent. At a quick glance this growth is robust and appears to indicate a healthy economy. GDP measures the total output of goods and services of a local economy.
But looking at the second quarter GDP from a much broader and larger picture, the 6 percent growth is lower than the 6.3 percent of the first quarter. This indicates that the country’s economic growth is slowing down. Considering further that the second quarter figure is way below the 7-8 percent target of the government, one cannot help but feel antsy.
The 6 percent GDP figure has ended the ten consecutive quarters in which Philippine economy grew on the average by 6.5 percent. It is two years since Du30 assumed the presidency. By the third year of his rule, the impact of his actions and policies can now be felt by the economy. Going by the GDP data released by the National Economic Development Authority (NEDA), Du30’s effect on the economy is negative. The slowing down of the economic growth could just be the beginning.
Another bad news that hit Filipinos is the 5.7 percent inflation rate last month. This is already the fastest increase of inflation in the last five years. Since January this year, inflation is on the rise. In January, inflation was 3.4 percent. By May inflation increased to 4.6 percent and now it is at 5.7 percent.
Inflation is the increase in the prices of goods and services. A high inflation causes economic hardship. Under the 5.7 percent inflation, 10,000 pesos last year is now worth 9,430 pesos. Inflation reduces the purchasing power of consumers.
According to the Philippine Statistics Authority (PSA), prices of these commodities have gone up due to inflation: housing, water, electricity, gas and other fuels, up by 8.2 percent; food and nonalcoholic beverages, up by 7.2 percent; clothing and footwear, up by 2.4 percent; and alcoholic beverages and tobacco, up by 21.9 percent.
Research group Ibon Foundation estimates that 60 million Filipinos suffered due high inflation, losing around Php 993 to Php 2,715 in income. In the first six months of the year, workers saw their income shrunk by Php 2,700 due to inflation.
Despite its self-reassurance that “Everything is good,” the Du30 administration is now in panic mode, fully aware that high prices of goods and services have serious political fall-out. It is frantically trying to find measures on how to ease the economic hardship felt by Filipinos. Economic managers of Du30 are said to have proposed the lowering of tariffs on meat and fish imports to bring down the prices of these goods. But doing this will flood the market with cheap imported meat and fish (most likely from China) and will force many local meat and fish business into bankruptcy. This will create a much bigger problem.
Lower GDP and high inflation are not the only negative things battering the Philippine economy. In the first six months of the year, the country’s trade deficit has widened to $ 19.1 billion. This means imports far outweigh exports. Import by June reached $ 51.8 billion while export brought in 32.7 billion. This is due to the decline of the country’s export since January this year.
The Philippine Economic Zone Authority (PEZA) on the other hand reported that pledges it attracted under Du30 dropped by 36.5 percent or Php 170.42 billion. The decline in pledges was noted in the following areas: manufacturing, information technology and business process management and ecozone development. PEZA cited the proposed TRAIN 2 as the reason behind the fall of pledges.
Remittances of the Overseas Filipino Workers (OFW) are also down by 4.5 percent according to the Bangko Sentral ng Pilipinas (BSP). In June this year BSP data reveal that personal remittances declined by 4.5 percent year-on-year to $2.4 billion.
Looking at the latest economic figures, Philippines economy is not rosy. While a full-blown economic melt-down has not happened so far, a full economic crisis, similar to the dying months of the Marcos dictatorship could be around the corner.
Philippines is not yet Venezuela but if things stay as they are on the economic front, Philippines may also get there. Venezuela, once one of the prosperous countries in South America is now an economic wastebasket. Inflation there is expected to reach 1 million percent this year. There is severe shortage of food and other basic necessities in Venezuela and Venezuelans are fleeing their country in droves.
Venezuela’s economic woes are brought about by the mismanagement of strong-man Hugo Chavez and his successor Nicolas Maduro. Both are like Du30 who loves to rule with iron-fist.
Du30 has not paid attention to the economy, obsessed only with blood and gore with his brutal and ruthless war on drugs. He wasted the six-years of economic stability under his predecessor. Instead of building on the right fundamentals of the previous administration, Du30’s confrontational and brash leadership has turned-off investors and trade partners. His heavy reliance on China (which has not delivered its $24 billion pledges) could be his own undoing and the Philippines’ path towards a Venezuela-like scenario, a country on the verge of economic collapse.