this is good news – the philippine economy growing with its GDP improving by 7.3% during the current year’s first quarter versus a 0.5% growth same period year ago. it is good news at face value but looking into what happened in the first quarter, it’s an expected growth since this is an election year. first quarter growth was most likely driven by election spending which naturally were expected to peak during that period with the election held in the 2nd quarter.
this phenomenon is a regular occurrence during election time in the country. a similar impressive GDP growth, the highest in the country’s history, was recorded in 2007 during the election period as well, that time the election for senators.
there are two more sobering points to consider – one is that the country’s GDP growth in most instances pale in comparison to the GDP growth of other countries in Asia. looking at those numbers, one might say the country’s eco performance may not be that impressive after all.
During the first quarter,
- Singapore’s economy grew 15.5 percent;
- Thailand, 12 percent;
- Malaysia, 10.1 percent;
- Vietnam, 5.8 percent;
- Taiwan, 13.3 percent;
- China, 11.9 percent;
- Hong Kong, 8.2 percent; and,
- South Korea, 7.8 percent.
the key question that needs to be asked all the time when looking at impressive GDP growth is the question of sustainability. country economic data like most other financial numbers go through cycles of peaks and valleys. peaks that are sustainable, that can be achieved over a long period of time is what we want. since this latest eco growth is mostly election spending driven, that means it is not sustainable. the next election is scheduled years from now, not on a quarterly basis.
at around the same the GDP data was released, the government released a different data that we think the government, this time the incoming aquino administration, need to watch more closely.
this data says the country’s poverty level has remained the same.
GDP growth is a good thing, but what the country needs a lot more of is that the poverty rate of the country to go down. a growing GDP rate and stagnant or increasing poverty rate means the rich is getting richer while the poor remain poor or are getting poorer.
a very large portion of the philippine population is poor where the DE socio-eco class accounts for at least 83% of the population. reducing poverty in the country will mean affecting a much larger chunk of the population in a very positive way.
the stage is set for the aquino administration.