PES conference amidst reduced risk and uncertainty

* This is my article in BusinessWorld last November 6, 2017.

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The Philippine Economic Society (PES) annual conference is probably the most cerebral event in the field of economics and business in the country. The reason is that in the afternoon, there are eight simultaneous panel discussions on eight different topics within 1 ½ hours, each panel with 3-4 presenters giving technical papers. A coffee break then another 7-8 simultaneous panel discussions, a total of 15-16 different topics with a total of about 50 speakers and panelists, in just one afternoon.

The morning session is devoted to big personalities in government (Cabinet Secretaries, Congress leaders), multilaterals, and sometimes corporate leaders. Except on few cases, I don’t give these speakers much weight because their presentations are generally presented and discussed somewhere else and in media.

So I became a lifetime member of PES and I have attended all the past PES annual conferences in the past decade or more. The next PES annual conference will be this coming Wednesday, Nov. 8 at Novotel Hotel in Cubao, Quezon City.

This year’s theme is “Growing Amidst Risk and Uncertainty.” I have developed skepticism to subjects with generally pessimistic or alarmist titles so I checked certain numbers to see if indeed there are more economic and social risks and uncertainties now and the near future, both global and national, compared to the past few years.

My skepticism is justified because I found out that there are less risks and uncertainties, not more, now and at least next year compared to the recent past. In particular:

(1) Projected gross domestic product (GDP) growth among the world’s biggest economies US, Canada, Germany and Japan are faster than the last four years. There is projected growth slowdown in China and India, the world’s #1 and #3 biggest economies in GDP-PPP values but the rates are still high at nearly 7%.

In the ASEAN-6, the same pattern of higher growth this year and the next compared to the past four years except in Singapore.

(2) In consumer prices, projections for 2017 are higher than the last four years for the industrialized west but the uptick is not scary nor alarming. For Asia’s big economies, either there is projected decline or the rise will be mild.

(3) It is in fiscal irresponsibility, in the spend-spend-spend culture of many governments around the world, where long-term risks can materialize because of their persistent budget deficit (revenues lower than expenditures). Still, it is good to see that some welfare states like Germany and S. Korea are posting fiscal surplus this year. (see table)

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For the Philippines, note that The Economist/EIU pool of forecasters project a crack in growth momentum next year. The past Aquino administration has managed to post really strong growth compared to many countries in the planet, growth momentum until this year but expected to somehow crack starting 2018.

Sadly, I cannot attend the PES meeting this year because I am going to the US for another conference this week and hence, first time in many years that I will miss this big event. If I could attend, of the 15 different topics in the afternoon, I would attend the Energy Policy Development Program (EPDP) panel on “Power Economics: Prices, Generation and Use” or Trade topic in session A. In session B, I would attend the Friedrich Naumann Foundation for Freedom (FNF) panel on “Climate Change and the Economics of Natural Disaster” or Ateneo School of Government (ASoG)’s panel on infrastructure.

I have written a number of papers in this column on the merits of cheaper, stable energy from conventional sources and the lousiness of unstable, intermittent, expensive renewables that depend on subsidies and priority dispatch to make them “viable.” In Germany, there is a growing momentum of policy reversal in climate and energy policies because the German liberals Free Democratic Party (FDP) and politically wild Alternatives for Germany (AfD) have surged high in the recent Bundestag/Parliament elections last September and these two parties are very explicit in questioning continued renewables cronyism and endorsing cheaper, stable energy from coal.

To summarize: (a) There are less risks and uncertainties now and the near future compared to recent years; (b) Endless fiscal irresponsibility by governments will create long-term risks with rising public debt; (c) Dutertenomics of tax-tax-tax aside from kill-kill-kill in its drugs war may crack starting next year; and (d) Climate and renewables alarmism will see slow policy reversals in more countries soon.

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US economic growth of 3%, due to deregulation?

If we exclude the years 2008-09 because they were outliers (global financial upheaval), the Obama years seem to be the weakest since 1990. Never experienced growth of 3% or higher.

US gdp
https://www.statista.com/statistics/188165/annual-gdp-growth-of-the-united-states-since-1990/

Early peek of the Trump admin first 3 Quarters of 2017, experienced 3% growth in the last 2 quarters (Q2 and Q3).

US gdp2
https://tradingeconomics.com/united-states/gdp-growth

US gdp3Fastest 6-months growth since 2014, because of Trump or Yellen or something else? One of Financial Times’ headlines today.

If the 3%+ is retained in Q4, it will be called the “fastest 9-months growth since ____”.

This chart below could be one explanation — US stocks growth the past year was rather fast compared to other major markets (China/Shanghai, Japan/Nikkei, Germany/DAX).

US stocks

http://www.wsj.com/mdc/public/page/mdc_us_stocks.html?refresh=on

The 2008-09 crash was a product of multi-decades of moral hazards problem in housing finance, not just 8 years of the Bush Jr. era.

A friend noted that “an institutional collapse like 2008 is followed by many years of slow growth and stagnation. The Philippines had the same experience from 1983 through the 90’s. From 1991, Japan nearly had two decades of below-average growth.”

Good points, he was arguing the slow growth momentum, which actually applied also to the rest of  G7 economies. But not to China, India, other Asian economies.

My hypothesis for the rather fast growth of the US economy in the last 2 quarters —  somehow a growth momentum due to some of his deregulation, de-bureaucratism policies. And the big tax cut plan, it’s seeping into business decisions, big investments may be coming to the US from abroad and big investments in the US won’t migrate to other countries anymore.

The role of liberal reforms and big population in growth momentum

* This is my article in BusinessWorld last October 27, 2016.

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Several issues preoccupy President Rodrigo Duterte’s mind and mouth: the violent anti-drug campaign and murders, his anti-US, anti-EU, and anti-UN expletives and polemics (but later reversing his earlier attacks against these countries and/or multilateral bodies).

After his anti-Obama, anti-US tantrums before and during the ASEAN and related summit meetings, he repeated the same vitriol in his China visit last week, citing his “separation from the US” and that the Philippines is united with China and Russia against the world. As expected, he took back these assertions almost immediately, clarifying that the country cannot afford to be separated from the US the minute he arrived in Manila.

Spouting off these incendiary remarks then taking them back — characterized as “sugod-atras” in Filipino — should not be taken literally as advised by the President’s cabinet officials.

However, these unnecessary assertions have real, negative impact on business confidence in the country, especially for massive investment plans and pledges that remain on the “wait and see” mode since the campaign period (February 2016) until today.

Will these outbursts by the President ultimately derail the economic momentum of the Philippines as started by the previous Aquino administration?

The Economist magazine regularly pools some of the world’s biggest investment banks and ratings companies about their global economic forecast and GDP growth projections. The numbers are shown on the table.

This piece made these country groupings in re-constructing the table. Group A are traditional, developed economy allies of the Philippines; B are President Duterte’s “pivot new friends”; C are the major Asian friends and trade partners; and D are miscellaneous. Venezuela is included in D to show how socialism and heavy statism can lead to economic and business decline (see table).

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These numbers show us the following:

One, group A remains to have sclerotic growth, they seem to be very lucky to grow 2% or higher. Unemployment rate is high, 5% and up, except Japan. Not shown on this table are the four EU countries which have incurred double-digit unemployment rates in July or August 2016: France 10.5%, Italy 11.4%, Spain 19.5%, and Greece 23.2%.

These figures show that the developed countries cannot be expected to provide more impetus to lead and drive faster global growth. Their capacity to provide more foreign aid, more loans and grants, is also compromised.

Group B has mixed results. China can be expected to lead regional growth and help pull upwards global demand, but not Russia. The latter remains limping due to low global oil prices, petroleum being one of its major export products, among the important factors.

Groups C and D continue to show fast growth potentials except the developed Asians like South Korea, Taiwan, Hong Kong, Singapore, and socialist Venezuela. The Philippines is expected to retain fast growth, third highest after India and China this year, also third highest next year after India and Vietnam, among emerging and developed Asians.

An important ingredient for faster growth is high and young population. Notice above that countries with 90+ million people — Vietnam, Philippines, Indonesia, Pakistan, India and China — are growing fast. The US, Japan, and Russia should belong to this category but they are growing slow, partly because they have an old and aging population.

Going back to our earlier question, will President Duterte’s emotional outbursts ultimately derail the Philippines’ economic momentum?

The answer seems to be no for two important reasons.

One, growth momentum is retained as various macroeconomic and infrastructure reforms laid by the previous administration are bearing fruit.

Two, our high and young population of 103 million people as of 2016 has become a potent force to provide the necessary market demand and labor force supply for more investments and entrepreneurial advancement.

So, despite the President’s incendiary remarks plus thousands of murders in the anti-drugs campaign that can potentially disappoint if not threaten big foreign investments planning to come to the Philippines, growth momentum is well in place.

Moreover, if this economic momentum is coupled with presidential sobriety and an anti-drugs campaign that is guided by due process, the country’s growth rate of 7%, or perhaps even higher, is very much possible.

Economic projections under the Duterte administration

* This is my article in BusinessWorld last June 23, 2016.

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“Change is coming” is true for all administrations, public or private, because people change, communities change, and so on. For the coming Presidency of Rodrigo Duterte starting this June 30, the main question is “Change for the better, or for the worse?”

This question will covered in the forthcoming BusinessWorld Economic Forum on July 12, 2016, to be held at the Shangri-La at the Fort, Taguig City. It will be a big event featuring the CEOs and Presidents of some of the biggest corporations in the country as speakers.

The afternoon session will feature the topic “The Philippine Economy Under the New Presidency” and the main speaker will be Mr. Carlos G. Dominguez III, Secretary, Department of Finance. The two other speakers in the same panel will be Mr. Ramon R. Del Rosario, President, Phinma Corporation, and Ms. Riza G. Mantaring, President, SunLife Financial.

Let us briefly review the Philippine’s GDP growth performance over the last six administrations, from the last six years (out of 20 years in power) of past President Ferdinand Marcos up to the term of the outgoing President Benigno S. C. Aquino III. Growth figures of the Philippines’ major economies in Asia are also shown to provide a comparative insight about the overall economic environment during those periods (see Table 1).

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The numbers show the following:

  1. President Benigno S. C. Aquino III’s administration has experienced or facilitated the fastest growth of the Philippine economy over the past 3 decades.
  1. From 1980-1997, the Philippines has the slowest growth rate in the Asia Pacific except Brunei and Japan. Which contributed to the country’s ugly label of “sick man of Asia” for nearly two decades.
  1. China has maintained its average double-digit growth for four decades until 2010. Growth slowdown started in 2011 until today but the growth rate, 6%-9%, is still high compared those experienced by many other countries. India and Vietnam are following its fast growth trajectory, though at a lower pace of 6%-8%.

Among the ASEAN countries, the fastest growing economies actually exclude the Philippines. These countries, with their average GDP growth rates from 2010-2015, are: Laos with 7.7%, Myanmar, 7.1%; and Cambodia, 7.0%. These countries though have low economic base and hence, growth potential is much higher than countries with bigger economic bases.

But after being an economic laggard for three decades, the Philippines stood out, posting robust growth. Will the Duterte administration be able to sustain this momentum, reverse it, or surpass it?

Here are three GDP growth projections for the same 12 economies above, coming from three different institutions. The Economist forecast is composite for month of their reports are also indicated (see Table 2).

o4b_062316
The Bank of Philippine Islands’ (BPI) Global Markets Commentary, June 2016 issue also showed its GDP growth forecast for the Philippines from 2016, 2017, and 2018 at 6.2%, 6.3%, and 6.6% respectively, or an average of 6.4%, much higher than IMF’s projections.

So it appears that the Duterte government will be able to sustain President Aquino’s economic achievement, especially based on the ADB and IMF forecasts. The Economist’s pool of forecasts however, sees a slightly lower growth trajectory. Nonetheless, let us keep the optimistic perspective.

The economic team of Duterte administration has released the updated “10 Point Agenda.”

  1. Continue and maintain current macroeconomic policies, including fiscal, monetary, and trade policies.
  1. Institute progressive tax reform and more effective tax collection, indexing taxes to inflation.
  1. Increase competitiveness and ease of doing business, relax Constitutional restrictions on foreign ownership except land ownership.
  1. Accelerate annual infrastructure spending to account for 5% of GDP, with Public-Private Partnerships.
  1. Promote rural development, agricultural, and rural enterprise productivity, rural tourism.
  1. Ensure security of land tenure, address bottlenecks in land management and titling agencies.
  1. Invest in human capital development, health and education systems.
  1. Promote science, technology and innovation.
  1. Improve social protection programs including the Conditional Cash Transfer program.
  1. Strengthen implementation of Reproductive Health (RH) Law.

These are good programs, especially since they cover economic liberalization policies and rule of law. Welfarism policies complete the picture although President Duterte was not known for promising welfarist policies during the campaign period, he focused on fighting criminality and corruption.

So, can we expect a “change for the better” or “change for the worse?” Economically, it appears to be the former. Respecting human rights is a different matter though and we hope it will not be a change for the worse because some worrying indicators are showing, more dead bodies of “suspected drug pushers/drug lords/thieves” are piling faster as June 30 is approaching.

Bienvenido S. Oplas, Jr. is the head of Minimal Government Thinkers, a SEANET Fellow and member of Economic Freedom Network (EFN) Asia.

GDP expansion in South Asia, 1995 – 2015

May 2016* This is my article in the business magazine in Kathmandu, May 2016 issue.

GDP expansion in South Asia from 1995 to 2015

Anywhere in the planet, the pursuit for faster and quicker economic growth by countries and economies is being sought and tested. This is because no amount of income and property redistribution will be successful if the economic pie remains small. The pie must expand first so that the share of various sectors and stakeholders will rise in absolute amount, even if their percentage share remains the same or small.

Let us review the economic expansion of South Asian economies over the past two decades, from 1995 to 2015, and draw some lessons from them.

In nominal prices, India’s GDP has expanded 5.7x; Pakistan’s GDP by 3.4x; Bangladesh’s by 4.5x; Sri Lanka’s by 6.3x; and Nepal’s by 4.2x.

In PPP values for the same period, India’s GDP has expanded by 5.6x; Pakistan’s by 3.3x; Bangladesh’s by 4.5x; Sri Lanka’s by 4.4x; and Nepal’s by 3.3x. These are modest growth and may be fine, although certain sectors in these countries would be unhappy with such expansion of their economy after 20 years. They would wish to copy many South East Asian economies that expand their GDP by 6-10x after two decades.

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Notice Japan’s economy: in nominal prices, its GDP has stunted while in PPP values, the economy expanded less than 2x after two decades. Whereas economic expansion in China was buzzing at a fast rate.

In per capita GDP at current or nominal prices from 1995 to 2015, South Asian economies’ per capita income has expanded between 2.2x (Pakistan’s) to 5.3x (Sri Lanka’s). In PPP values, the per capita income expansion was between 2.1x (Pakistan’s) to 4.2x (Maldives’).

Compared to the levels enjoyed by developed Asian economies like Singapore, Brunei, Hong Kong and Japan, their per capita GDP are really huge.

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If we review again the growth trajectory of many Asian tiger economies aside from Japan – S. Korea, Taiwan, Singapore and Hong Kong – they managed to grow fast because of (a) market- and outward-oriented economic policies, (b) technological advances and competition, and (c) prevalence of the rule of law. So while their governments started with cronyism and state-sponsored industrialization, the main contribution of their governments was the promulgation and respect for the rule of law. Laws that generally apply to everyone, little or no exception.

Doing business in this kind of environment is stable and relatively easier. Entrepreneurs can put their huge savings and borrowings to long-term business projects knowing that rules and policies remain for many years and not changed midway to favor certain business interests that are close to the President or Prime Minister of the country.

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It is good that a number of South Asian economies are slowly realizing this. More trade liberalization, whether via regional, bilateral or unilateral liberalization, any of such move will produce net gains (advantages are larger than disadvantages) because people trade only if they realize there is net gain for them.

Unemployment and underemployment data may be overstated

* This is my article in BusinessWorld last June 02, 2016.

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Based on the latest January 2016 labor force survey data by the Philippine Statistics Authority (PSA), there were 2.47 million unemployed and 7.88 million underemployed Filipinos, representing 5.8% and 19.7% of the total 42.5 million total labor force in the country. So 10.35 million (25.5% of labor force) were either unemployed or underemployed, a big figure.

Also from among East Asian economies, Philippine unemployment rate is the highest. From 2010-2015 especially, where the Philippines has the highest average GDP growth rates in East Asia except China, Cambodia, Laos, and Myanmar, unemployment rate remained the highest in the region. Not included in the table below are Cambodia and Laos because no data was available in the IMF database (see table).

o3_060216

What explains for this discrepancy or disconnect between the Philippines’ fast growth and persistent high unemployment?

I myself have doubts about the country’s unemployment data since several years ago.

But it’s not about the data itself as collated and reported by the PSA but the attitude and response of survey respondents when PSA survey staff talk to them.

The reasons for my skepticism are the following:

One, survey respondents tend to highlight the adverse side of their economic status. When people approach the public for social surveys, the tendency of respondents is to report the pessimistic side of their lives mainly to avoid taxation if they declare that they have a regular job, and/or they expect more welfare and subsidy programs, especially if more of them will declare that they are unemployed or underemployed.

Two, voluntary and short-term unemployment.

A person offered a P60,000 a month job but declined it because he is waiting for a possible job offer with a higher salary is technically jobless and unemployed, especially if that person happened to be surveyed by the PSA at that time. That person has a high “reservation wage” but neither is he poor or miserable.

Countries with unemployment rate of 1%-3% are considered having a “full employment” economies because those 1%-3% of the labor force who have no jobs are voluntary or temporarily unemployed, like resting for a few weeks while raising their reservation wage for the next job offer.

Three, fully-employed yet underemployed persons.

The PSA defines underemployment as “employed persons who express the desire to have additional hours of work in their present job, or to have additional job, or to have a new job with longer working hours”

So a person already working 40-50 hours a week and earning P150k a month but still want additional work because he needs at least P170k a month or more is technically underemployed, even if he is already well off compared to the average income of the population.

Four, my experience looking for a house helper last week in my hometown, Cadiz City, Negros Occidental opened my eyes to what’s happening on the ground.

I went to four rural barangays, most of which are sugar-dependent and roads to which are still unpaved until now. These things surprised me.

(a) Unemployment is almost zero. People have jobs, mostly low-paying or contractual and seasonal jobs in the informal sector, but people have jobs. Many of the younger ones are working in Bacolod City, the provincial and commercial capital, or in Metro Manila. The older ones work in the sugarcane fields, or tricycle drivers, carpenters, construction workers, in shops in Cadiz City proper, etc.

(b) Voluntary unemployment is evident. The few who have no stable jobs and want one chose not to work in Manila for various personal reasons like they do not want to be far from their kids, parents, etc. They would rather be unemployed or underemployed than be fully employed but far from their loved ones. In the provinces, families have relatives and other network that can help them tide over. Some have parents or siblings who work abroad and regularly receive their monthly allowance and opt to stay in the province where the cost of living is low.

(c) High “reservation wage” also exists in the lower strata of society.

I offered a prospective househelper a starting pay of P4,000/month + free travel to Manila + days-off or overtime pay on their days-off (if prefer to work instead) + pay hike after 4 months ++.

One that I interviewed used to receive P6k a month ++ and will work for me only if I will at least match her last pay. The P6k a month ++ is her reservation wage.

Months before, my sister and other folks told me that it is hard now to get a helper even in rural areas.

After going to different barangays in three days, I was able to find one. She’s never been to Metro Manila and she wants to work there. More importantly, she is my distant relative and I will be comfortable leaving my two young girls to her when I and my wife go to work. She used to work for a department store in Cadiz City and enduring a pay of P120/day, 7 a.m. to 7 p.m., sometimes until 8 p.m., no meal or transportation allowance, and only 3 months contractual work.

With those four reasons above, I think that the Philippines’ unemployment and underemployment data is overstated. Consequently, even the SWS’ survey data of “self-rated poverty” is also overstated. The actual state of unemployment in the country should be lower than what is reported.

How to verify, prove or disprove the above hypothesis?

One possible way is to conduct a survey asking people, with work or no work at the time of the survey, if they are willing to work as house helpers, as gardeners, as messengers and janitors, etc. in Manila or Cebu at X monthly pay ++. If people are so poor and desperate for work, they will grab even “low pay” work and/or being far from their families, just to get a stable source of income.

Acceptance of those deemed “low pay” work should be counted as the proxy unemployment rate. If this method can be used, my bet is that Philippine unemployment rate will be between 1%-3%.

And those endless, ever-expanding government welfare and subsidy programs should be streamlined to only a few, with a timetable of cutting them in the future. New welfare programs should be initiated only if some old welfare programs that obviously do not work are discontinued and defunded.

Bienvenido S. Oplas, Jr. is the head of Minimal Government Thinkers, a Fellow of SEANET and Stratbase-ADRi. minimalgovernment@gmail.com

100 indicators better than GDP

* This is my article in BusinessWorld last May 26, 2016.

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Many people are getting impatient with gross domestic product (GDP) growth data, especially growth rates of 6% or higher, saying these numbers are “irrelevant”, “useless”, “misleading”, and “mean nothing” to their lives. Stronger criticisms of GDP growth numbers include “jobless growth” and “outright lies” that paint a rosy picture of an otherwise thorny and despicable society.

While there are some truths to these sentiments, especially for people who live under dictatorships and harsh political repression, a number of these sentiments are themselves misleading and full of angsts and misdirected anger.

One recent article that got circulated well in social media was published by the World Economic Forum (WEF) blog, “Five indicators better than GDP.” The author cited a study by the New Economics Foundation (NEF) and listed these five criteria as “better than GDP” and may imply that GDP data can be dispensed with:

  1. Good jobs. Employment statistics tell us what proportion of people have jobs. They don’t tell us what proportion of those with jobs are paid too little to afford a decent standard of living, or worry about whether they’ll still have work next month.
  1. Well-being. A growing economy is not an end in itself — it’s a means to improving people’s lives. Few would disagree that the ultimate aim of public policy is well-being; we care about GDP because we assume it means more well-being. So why not also measure well-being directly?
  1. Environment. The NEF proposes a national indicator of lifestyle-related carbon emissions, relative to an allocation calculated from global targets for avoiding dangerous levels of climate change.
  1. Fairness. Research increasingly shows that high income inequality has negative social consequences, while casting doubt on the idea that it incentivises hard work.
  1. Health. The NEF proposes “avoidable deaths” as a simple, easily-understandable measure that captures the quality of health interventions — not only treatment, but also prevention.

Let us take for the sake of argument that we can dispense with, even throw away, GDP growth data and use those five indicators instead. Then other problems can crop up, like some people will complain, “Why only those five? Why not also include indicators on (6) affordable housing, (7) efficient public transportation, (8) good anti-flooding, (9) more CCT welfare, (10) cheap and stable electricity, (11) cheap nutritious food, (12) free or affordable university education,… (100) fast, free Wi-Fi.”

Thus, a replacement of “irrelevant, useless, misleading, jobless growth…” GDP data can actually result in numerous indicators that can raise more questions and suspicious how they are computed, what factors are included in their computation, for each of those 50 or 100 indicators.

So that WEF article, like many of its predecessor and similar papers, is lousy. Computing the GDP actually involves tons of data from so many sectors and sub-sectors. Whether computing the GDP on the demand side (GDP = C + I + G + [X-M]) or the supply side (GDP = gross value added in Agriculture + Industry + Services), lots of data in each of those factors in the equation are dug, verified, and counter-checked. An overstatement of the numbers last year to project a rosy achievement would mean possible understatement of the actual numbers this year, or further tinkering of the data to sustain the deception.

One problem with this method is that when people continuously torture data, the latter will confess and the real numbers will surface. So through time, various governments and their national statisticians have learned to respect their real data, and if they have to torture it, not too much otherwise the data will confess sooner than later.

Bottom line, GDP growth (or non-growth) data are the result of hundreds or thousands of nuances in each sub-sector of the economy, collating thousands of numbers to produce only two figures, (a) the value of the flow of goods and services in one year, and (b) growth rate over the previous year.

Having established this, let us now check GDP growth numbers of the Philippines compared to its neighbors in the region. I chose the years of each administration in the Philippines (see Table 1).

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Then I got the average GDP growth for the yearly data of these 16 members of the Regional Comprehensive Economic Partnership (RCEP), plus Hong Kong and Taiwan as they are neighbors of the Philippines (see Table 2).

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The above numbers show the following:

  1. President Benigno S. C. Aquino III’s administration has experienced or facilitated the fastest growth of the Philippine economy over the past 3 decades. For his detractors who say that the 6.2% average growth rate was “meaningless”; perhaps an average growth of 2%-3% would have pacified them? Or they would be angrier because we could have grown much faster than 3%?
  1. The fastest growing economies in the ASEAN in recent years is actually not the Philippines but Laos, Myanmar, and Cambodia. But these nations have low economic bases and hence, potential for growth is much higher than countries with bigger economic bases. Would the GDP detractors or skeptics also dismiss the growth achievement of these three countries as “meaningless and irrelevant”?
  1. From 1980-1997, the Philippines has the slowest growth rate in the Asia Pacific except Brunei and Japan, earning the ugly label of the “sick man of Asia” for nearly two decades. Would the local GDP bashers consider that fact as “meaningful, relevant” because the Philippines was the laggard?

Readers can make their own interpretations and conclusions of the economic performance of the Philippines and other countries from the table.

High GDP growth almost always create more jobs. If people are jobless even temporarily, there are at least two possible explanations. (a) They simply want to bum around and their rich parents or siblings, etc. can feed them; or (b) they are industrious but have high “reservation wage”, meaning if are offered P20k a month job, they reject because they are waiting for a P25k a month or higher job offer.

High GDP growth expectation also produce high employment and wage expectations. That is why some people who receive P30k a month last year are disappointed that they only get a raise to P31k this year instead of P35k or higher, so when SWS or other surveyors come to ask about their standard of living, they feel bad or poor. And they become one of the GDP skeptics/bashers.

Not that I am a fan of centralized economic planning. I only with to point here that GDP bashing is actually more bashful than the subject that they deride.

Bienvenido S. Oplas, Jr. is the head of Minimal Government Thinkers and a Fellow of SEANET and Stratbase-ADRi.