Aquino warned economic gains unsustainable

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President Benigno Aquino. FILE PHOTO

MANILA, Philippines – External factors, such as inflows from overseas Filipino workers (OFW) and the Business Process Outsourcing (BPO) sector, were the reasons for the 7.1 percent economic growth of the country but the gains are unsustainable in the long term, a militant leftist group warned Thursday.

 

“BPO and OFW remittances could not be expected to sustain the economic growth over the long term because they depend largely on the conditions of foreign economies,” Renato Reyes Jr., secretary general of Bagong Alyansang Makabayan (Bayan), said in a statement.

 

“They also do not represent positive signals for the economy but in fact are abnormalities created by age-old deeply flawed national policies and programs,” he added.

 

The gross domestic product, a measure of the country’s productivity, had increased by 7.1 percent in the third quarter, the National Statistical Coordination Board (NSCB) announced Wednesday. The GDP in the same period last year was 3.2 percent.

 

Bayan said that the growth, because it stems from investments in the BPO sector and OFW remittances, does not address the basic problems of poverty and unemployment in the country.

 

Reyes, citing data from the National Statistics Office (NSO), said that the unemployment rate in July 2012 was 7 percent or 2.83 million jobless workers. Last year the figure was 7.1 percent, he added.

 

A survey by Social Weather Stations (SWS) in August 2012 showed that 47 percent of Filipinos considered themselves poor, Reyes said.

 

“Malacañang can jump with joy over the new statistics but at the end of the day, people will still measure growth in terms of higher wages and salaries, jobs created domestically, social benefits, lower prices and other indicators that are directly felt by the people,” he said.

 

“What we are seeing appears to be jobless growth since unemployment remains quite significant and almost unchanged, even if based on official data,” he added.

 

The government should create long-term jobs for people by building strong domestic industries that will provide them with sustainable income.

 

“Sadly, amid all the noise about good governance and inclusive growth, our economy is still geared towards meeting international demand rather than actual domestic needs,” Reyes said.

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  • justice_league03

    Reyes couldnt have said it any better!!! i hope the Aquino administration would not brag about this 7.1% growth and see it as an accomplishment since it could be bad in the long run as Renato Reyes said. the Aquino admin had nothing to do about this to begin with. it was remittances from BPOs and OFWs which will not be permanent. hopefully the administration would not sit back and relax because of this gdp growth. they have to remember that there are still 2.83 million Filipinos who are unemployed, and 8.5 million who are underemployed. and this growth will not help any of those people now or in the long run.

  • Your_King

    Almost half of Filipinos consider themselves poor. About 12 million Filipinos unemployed. Many millions of Filipinos leave the country to seek employment abroad and that along with the BPO is the main reason of this economic growth? All these are warning signs that the Philippines is not economically set for stability in the long run. I wonder if Aquino is aware that his lack of a plan for the Philippines is just setting us up for a major drop and let down. Its good today for the wrong reasons which means it may cause things to go bad in the future.

  • renedr

    Meeting international demand is the best way to serve domestic needs. Any student of history will know that China, the UK, Germany, Japan and the U.S. all grew their economies based on their ability to sell excess production to other countries. This is not only true in recent times, it is true for  many of the largest economies of the last 500 years. The industrial age and the early 20th century brought tremendous wealth to the U.K., parts of Europe and America because of the products that were built in the factories and grown in the farms of the UK, USA and Europe and sought after all over the world.

    Today, the global paradigm is different. Services are just as important a part of the global economy as goods and agricultural products. Services is an area where the Filipino currently excels. We have become a global service provider in areas as diverse as seamen to medical workers, construction, domestic workers, BPO and even professional management (think Manny Pangilinan). We also have a very strong local services segment that has long surpassed the agricultural sector in terms of contribution to GDP.  Services today consists of 56% of our GDP while Industry is 31% and Agriculture is 13% of the GDP.

    Our economy has grown on a base of services. But as excess wealth is created and consumption is spurred, There is no reason for us not to expect a parallel growth in industry. The key factor is the perception that the Philippines is a country where investments are protected and where there is a level playing field. The recent successful policies of the government in going after corruption and tax evaders is an indispensable signal.

    Even China has made a big effort to go after Bo Xilai and similar individuals for corruption because they realize that no matter how financially successful their economy is, if there is a perception that impunity rules then the economy will always stand on shaky foundations.

  • http://profile.yahoo.com/AUNBI66J3EGEPMV5LFCN53OUGI JEO

    Some of the comments here are correct, why listen to this guy or this party list people? Who they are for us to listen in their views about economy? they cannot even create a single sustainable job then now their crab mentality sinks in again. This militant leftist doesn’t make any good but for themselves alone! Inquirer must ask those people who have track records and background not just pick it from carenderia or in the sidewalk.

    That is we are poor because we think, we rely and asked those incompetent people.

  • http://pulse.yahoo.com/_BFVHG62YMHHA7AIMGDCXTNKJJI The Truth

    You need to have your sanity check r.reyes, OFW remittances and BPO’s has been with us for quite sometime and we never had these outstanding economic figures from GIR, GDP, BOP, creditors upgrade, loan TO IMF of $1B, etc… in less than THREE yeas of good governance.

    Do you expect an overnight improvement in all aspects? Then, you really need to check your sanity or still a crab mentality or just pardon me if you’re a pea brain.

  • http://profile.yahoo.com/ATXQMVQWCIUQK6OFJRYPZ4A2EA Setsuna

    WHAT.?? Who does Renato Reyes think he is? he’s just an activist? And why does Inquirer entertain these guys anyway?

    I used to join activist groups like him, but those days are over, ralying and going out on the streets are things of the past.

    These guys just could’nt move on from the “good old days” of EDSA 2 & 3 where protest were everywhere, our budget came from sources left and right, they failed to get a real job.

    These guys should’nt be entertained anymore, truth be told, Bayan muna is an obsolete entity, shrinking fast and holding on for dear life

  • Marcial72

    Niloloko tayo ng gobyerno! Ganito kasi yan! Halimbawa ang travel time papuntang  Baguio ay 5 hrs. Si Peenoy ang travel time niya papuntang baguio ay 20 hrs.  Nung nasa Bulacan siya tumatakbo siya ng 20kph.  Ng umabot siya ng Pampanga tumakbo siya ng 60 kph (takot kasi).  Ngayon pinagmayabang niya na bumilis ang tavel time niya ng 40 kph. Pero sa pangkahalatan 20 hrs pa rin ang travel time niya papuntang Baguio.  Nag slow down kasi ang ekonomiya nuong 2011 dahil sa katangahan ni Peenoy nag underspending ang gobyerno.  Natakot sa epekto kaya gumastos ng gumastos ng 2012. Ayan!

  • http://twitter.com/kintoy K Enriquez

    akala ko economist ang nagsabi. Bayan lang pala, ala kwenta

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