Naunang inilathala ang balitang ito sa Philippine Collegian noong 28 Hulyo 2008. Isinulat ang balitang ito kasama si John Alliage Morales, patnugot sa balita ng Collegian.
Despite Gloria Arroyo’s declaration that she was able to produce the “best Philippine economy” in 30 years, the record-level economic growth posted by her government is headed for a great plunge, as the country reels from an economic crisis compounded by a global recession.
This is how independent think-tank IBON Foundation Inc. described the “hollow gains” of the economy under Arroyo in its annual Midyear Birdtalk on July 23 at the UP School of Economics.
The President is expected to announce today in her 8th State of the Nation Address her administration’s robust spending on social programs. But IBON said her unmatched unpopularity “will only continue as the people’s plight deepens and the administration fails to take both partial economic relief measures and genuine measures to address the root of the problems.”
“Oil price hikes, rice crisis and power rates increases—these issues are not new but they are happening simultaneously while people are reeling from historic joblessness, worsening poverty and government neglect,” said IBON Executive Director Rosario Bella Guzman in her report.
IBON’s research head Sonny Africa said that the government has the resources needed to resolve the present crises. “If you want government to last, you must [provide] long-term solutions,” Africa added.
The research group added that Arroyo must commit to long-term solutions like repealing the Oil Deregulation Law (ODL) of 1996 and increasing support for agriculture and food production “in order to start building a solid economy and a genuinely strong republic.”
‘Repulsive policies’
Guzman also criticized Arroyo for sidetracking the economic crisis’ “real causes,” which include economic policies geared towards the country’s import dependency, deregulation of basic industries, and aggressive food importation, instead of aiming for self-sufficiency.
As of July 12, the prices of gasoline, diesel and kerosene in Metro Manila have risen by P12 since January. Guzman said this “rapid and steep” increase in oil prices were recorded during Arroyo’s administration, since the government left the control of the petroleum products market to the private sector.
Guzman added that the government is unlikely to respond to calls to lift the 12 percent expanded value added tax (EVAT) on petroleum products because more than half of the total tax collections are obtained from this industry.
Record-level prices
Food prices also skyrocketed by an average of 17.4 percent in June this year from last year, according to the latest IBON report. Over-all inflation reached 11.4 percent, the highest since 1994.
The research firm also feared that the government’s plan of removing tariffs on rice imports and the complete privatization of the state-run National Food Authority (NFA) would further endanger food security in the country. IBON warned that this may result in heavier rice importation, which almost doubled from last year, even as the government’s rice inventory and production forecasts show sufficiency.
While billions of pesos are intended to go to importation, IBON disclosed that the Arroyo government has allocated a measly P51.2 billion for the agriculture sector. The subsidy is only 1.2 percent of the national budget and 0.7 percent of the gross domestic product.
Moreover, Guzman attributed the power rates increases to the deregulation of the energy sector, leaving the pricing to the hands of profit-oriented corporations. For instance, according to IBON, Manila Electric Co. has added “unacceptable” electricity charges on April 1, while the government has allowed every item in an electric bill to be charged with a 12-percent VAT.
Meanwhile, Guzman pointed out that millions of Filipinos cannot cope with the soaring prices of basic commodities which further erode their already dismal incomes.
Africa added that the P15-billion subsidy that the government allotted to the poor is “too little” compared to the chunk of revenues that go to corruption and military modernization.
Sluggish economy
Meanwhile, as early as the first quarter of 2008, majority of the economic sectors slowed down and registered growth levels comparable only to levels in 2005, with the heavy remittances from migrant Filipinos tempering the otherwise drastic economic downturn, IBON said.
Domestic economy grew by 5.18 percent, slower than the 6.97 percent growth rate a year earlier.
IBON also said that Philippine trade also posted chronic negative growth as imports, with an annual average growth rate of 7 percent, far outpace exports growing annually by 4 percent.
“Undoubtedly, despite reducing its deficit, the Arroyo government is still ‘deficit spending,’ which is a chronic phenomenon for a debt-driven and debt-dependent economy,” the IBON report said.
