Unmet expectations on GDP rise

The economic managers of President Duterte may have some reasons to smile these days.

The National Economic and Development Authority announced recently the country’s gross domestic product (GDP) for the second quarter grew by 6.5 percent.

Although this growth rate represents a 0.1 percent increase from the first quarter, it’s something to be proud of because it compares well with some of the neighboring countries.

Then there’s the result of the survey conducted by the Social Weather Stations in June showing that 44 percent of Filipinos expressed confidence that their personal quality of life will improve in the next 12 months and only 4 percent believed it would get worse.

Taken together, these reports seem to indicate that the administration’s economic program is on the right track and that the majority of our people are optimistic that better days lie ahead.

Whether or not that feeling may be attributed to the Filipinos’ innate sense of optimism (or thinking positively to subliminally invite good vibes) is up to the sociologists to figure out.

In spite of the “good news,” however, the administration should guard against a feeling of hubris. That favorable attitude toward the government can change overnight due to an errant government action or an event happening elsewhere in the world that adversely affects overseas Filipino workers and their families.

The “Dutertenomics” touted by the economic managers is very much a work in progress. It’s barely a year old. Its anchor—the comprehensive tax reform bill that is envisioned to fund the “Build, build, build” program—has yet to be favorably acted upon by the Senate.

At the rate some lobby groups are working to exempt their clients from the coverage of the bill, the anticipated revenue intake from that measure may fall way below expectations.

There’s nothing wrong with the publicity hype over the planned infrastructure projects, e.g. underground subway in Mega Manila, bus rapid transport system in Cebu City and train system from Metro Manila to Subic, despite the fact that most of these are still at the planning stage.

The information drive gives the public a feeling that, either during President Duterte’s term or several years after, inadequate transportation facilities would be a thing of the past. And that what past administrations had promised but failed to deliver, the present administration would be able to accomplish and more.

But there is a danger in raising too much expectation. When the announced projects are, for one reason or another, scrapped, or their dates of completion are not met, the public may think the Duterte administration is no different from its predecessors.

As in the past, reported growths in GDP are taken by the public with a grain of salt. They look good in the country’s financial reports and help improve its credit rating in the international financial market. They also present opportunities for bragging rights in relation to the economies of other countries in the region.

But whether or not these upward adjustments in GDP redound to the benefit of the majority of our people, in terms of additional purchasing power or higher quality of life, is a big question mark.

Sad, but true, the much-ballyhooed GDP growth rates in our country are enjoyed only by the proverbial 1 percent to the exclusion of 99 percent of our society.

Taking a leaf from the experience of China and Malaysia, it would take at least 10 years of uninterrupted double-digit growth in GDP before the benefits of economic progress can trickle down to or be enjoyed by the marginalized sectors of our country.

If the administration’s economic managers are able to achieve double-digit GDP growth during the remaining years of the Duterte administration, their busts would be fit to be installed on pedestals. Until then, they should restrain their exuberance on GDP growth rates.