When gov’t ignores its own plan

The World Bank launched earlier this week its Philippine Economic Update, entitled “Building a Resilient Recovery.” One of its key findings was that the country’s GDP will likely shrink by about 8.1 percent in 2020.

That implies that it expects the country’s fourth-quarter (October to December) GDP growth to be -4.1 percent (compared to -11.1 percent in the third quarter, -16.5 percent in the second quarter, and -0.7 percent in the first quarter), or its second-semester contraction to be about -7.6 percent.

Compare this with the projections of our Development Budget Coordination Committee (DBCC), when preparing for the 2021 National Expenditure Program (NEP): The DBCC projected shrinkage of between 4.5 percent and 6.6 percent for 2020. You’ve got to give the DBCC an A for optimism, not to mention the very large range it gave for its projections (which make them almost useless). Remember, they were preparing this projection in August, after realizing that the Philippines had plunged into recession.

This implies that our government’s economic managers expected the country to shrink by anywhere from -0.4 percent to -4.6 percent in the second semester. Since it contracted by 11.1 percent in the third quarter, the country would have to grow by anywhere from 1.9 percent to 10.3 percent in the last three months of the year to meet the target. You think? What does this say of our managers and their forecasts?

The point is, Reader, that the 2021 NEP, which is the basis of our General Appropriations Act or our national budget, just days ago approved by both Houses of Congress, was itself based on these as well as other projections relating to inflation, debt, interest rates, etc. Based on unrealistic, overoptimistic assumptions on our macroeconomy.

It would have certainly helped if the World Bank had made some sort of analysis on whether the 2021 budget was consistent with all the things it had suggested that the Philippines must do, or not to go that far, whether the 2021 budget was consistent with what the government of the Philippines had itself set out to do. I am afraid, Reader, that it does not.

One of the reasons there seems to be a great disconnect between the government’s talk and its walk is made clear by how it treats its own overall plan—the Philippine Development Plan (PDP) 2017-2022. That plan was supposed to reflect President Duterte’s campaign 0-10 Point Socioeconomic Program. Mr. Duterte praised it all to high heaven in his foreword. It contained his overall objectives—basically inclusive growth—and the more than 400 indicators that would allow us to determine whether the government had met these objectives or not. The Philippine Statistics Authority (PSA) even monitors the progress of this plan through its StatDev.

But nobody pays attention, least of all the President, who has not once mentioned how his government is doing with respect to its Plan, maybe because there are two chapters in the Plan that do not have any published targets, and these have to do with his favorite issues: drugs, crime, security, peace.

Has anyone ever heard the President even talk about the PDP? Or whether his government is performing well with respect to its targets? All he has to do is look at the assessment of the PSA. And that’s the problem, you see. According to the StatDev, the government’s performance has been at best mediocre (my term, not theirs). So naturally, the whole government looks the other way, and frankly, so does the PSA, it seems, which does not even give the StatDev the benefit of a press conference when it brings out its assessment every July, supposedly in time to be used for the President’s State of the Nation Address (Sona).

In fact, the StatDev this year came out late—definitely much later than the Sona. And it was touted to be just a preliminary version, with the final version coming out when there was more data. Well, the year is almost up. And my requests for an update have been ignored.

Pity, really. Because the PDP should ideally, talk the talk—telling us where we should be going, year by year, during a President’s administration. And the StatDev should be telling us if the administration is walking the walk—whether the administration is living up to its intentions. Plus, it would give the President the evidentiary and transparent basis for his hiring and firing subordinates. But the PDP and the StatDev are sidelined. What a waste.

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