The Philippine economy in the next six years

This is not about forecasting on what most likely to be the annual growth rate of the Philippine economy in the next six years or until the next presidential election. To do so would be to belie the fact that most forecasts, whether in the short, medium or long run, is bound to fail or proven to be out of zinc of the unfolding events. Such is the trouble with forecasting that even the World Bank or IMF and many other international bodies concerned with the economy would have to adjust their figures as the events of the forecasted year/s unfold. Most often, these events would also turn out to be different from what were originally expected.

Having said that, I might just focus instead on what our new president or his government intends to do on the economy while he is in Malacañang. From there, I then make my own conclusion of what it might lead to, basing on what I would think about the coherence or noncoherence of the President’s vision and strategy or their absence for our economy.

Frankly, I would have expected the president to outline his vision of the economy under his care during his first Sona with some explanation as to how this vision will be achieved. What have I seen in his first Sona?

Look at what he said:

“On the macroeconomic management, my administration will continue and maintain current macroeconomic policies, and even do better. We will achieve this through prudent fiscal and monetary policies that can help translate high growth into more and better job reaction and poverty reduction.

By the end of my term, I hope – I hope and I pray – to handover an economy that is much stronger, characterized by solid growth, low and stable inflation, dollar reserves, and robust fiscal position.

“On taxation, my administration will pursue tax reforms towards a simpler, and more equitable, and more efficient tax system that can foster investment and job creation. We will lower personal and corporate income tax rates and relax the bank secrecy laws. . .

“At the household level, there must be sufficient income for all Filipinos to meet the basic food and nonfood needs for their families. We shall continue to attract investments that will generate thousands of jobs each year – jobs that are suitable for the poor and less-skilled members of the workforce.

“Reforms to ensure competitiveness and promote ease of doing business will be mandatory. Reacting to these needs, the restrictions on the economy will be needed to make more investments to come and to develop labor-intensive industries such as manufacturing, agriculture and tourism shall be pursued.

“We must also invest in human capital and ensure equal access to economic opportunities.”

The President also mentioned the need to implement the Responsible Parenthood and Reproductive Health law to help our couples become more productive members of the labor force, to promote entrepreneurships when employment is not an option in extremely rural neighborhoods, to enhance local business environment by addressing bottles in business registrations and processing, and so forth.

Such are the things that the President wants to do for us during his term. And more perhaps as he learn more about the economy and what he thinks would need improvement.

But are these enough? You see the most critical problem in our society today is really the widespread prevalence of poverty that results from lack of employment opportunities that could provide sufficient income to many of people to meet their basic needs and other comforts in life. To me, it is poverty that prompts many of our poor to sell drugs or become its victim and to commit crimes in various degrees of gravity. This is not to say that drugs and crimes will be totally eliminated if we succeed in improving the life of our people in the next six years. Developed countries still has this problems but only because even in developed countries, some people can still suffer from relative poverty. But their situation may not be really that bad as in the poor countries like ours. How can poverty be minimized?

On the economy, the president talks of continuing and maintaining current macroeconomic policies, and even do better. He would like to achieve this through prudent fiscal and monetary policies that can help translate high growth into more and better job reaction and poverty reduction. He is hoping and praying to hand over at the end of his term an economy that is much stronger, characterized by solid growth, low and stable inflation.

Without saying it, this is the president’s vision and strategy for our economy. A strong economy means one that is resilient or able to withstand any trouble that could befall on our country from within or without. And solid growth can only mean that growth is also sustainable and inclusive. Or equitable in such a way that the poor also gains from growth and not just remain where they are in relation to the rich among us.

I still have more to say, but I guess this can wait till my next column.