By Lucia Edna P. de Guzman, Digital Reporter
EVERY administration tries to employ slogans to set themselves apart from the previous ones.
This explains why President Joseph E. Estrada rode on his “Jeep ni Erap” to further enhance his “masa” vibe, President Gloria Macapagal-Arroyo emphasized her “Strong Republic” to underscore her inner strength, and President Benigno S. C. Aquino III had his Tuwid na Daan (The Right Path), predicated on honesty and integrity.
President Rodrigo R. Duterte is no different.
With “Change is Coming,” Mr. Duterte is portrayed as a macho, hot-blooded Mindanaoan out to disrupt the status quo and bring about a radical shift in the way things are done in this country.
A year into his term, Mr. Duterte’s economic managers coined the eponymous “Dutertenomics,” which encompassed the length and breadth of his economic program (especially since Duterte’s ten-point socioeconomic agenda” proves to be a mouthful).
Dutertenomics took center stage during the first session of the 2017 BusinessWorld Economic Forum, held on May 19 at the Shanri-la at the Fort, Bonifacio Global City. Representing the government’s fiscal and monetary policy making units, Socio-Economic Planning Secretary Ernesto M. Pernia and Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo were among the first to speak during the forum.
“Dutertenomics is about infrastructure projects that will be processed swiftly, implemented on time, and without corruption,” said Mr. Pernia, adding that the measure would boost economic activity across regions. “The way Dutertenomics will be achieved would be through very complete processes and steps.”
By 2022, the administration expects that the economy would have expanded and GDP per capita would increase to at least $5,000, thus reducing poverty and making the Philippines an upper middle income economy.
“The country’s economic growth will continue to come from strong domestic demand supported by investment activities, particularly from infrastructure spending of the government,” Mr. Pernia said. “With external demand in some markets as well as the country’s continued diversification of markets and products, growth can be further boosted by experts in the near term. In the supply side, with our shift in rice sector policy, we expect high-value agriculture crops to expand.”
Dutertenomics hinges on massive infrastructure spending and tax reform, said the country’s chief economist.
Building windmills, not walls
For his part, Mr. Guinigundo said that the Philippines is out to “build windmills, not walls”, a reference to a Chinese proverb on how one should build windmills and not walls when the winds of change is coming.
The Philippines has the finances to fund Dutertenomics, according to the senior central bank official. “While there’s so much volatility in financial markets, we can leverage on this because we can expect capital flows either from grants or loans to finance public spending on infrastructure and in the process address the large infrastructure gap, providing access for people, create job opportunities, and address the issue of poverty.”
On the exchange rate, which has hit many lows last year, Mr. Guinigundo said “Because the economy has been more competitive the last few years, the exchange rate has become more flexible, and that gives us additional policy space.” As for inflation, the Philippines’ sensitivity to oil inflation has gone down. These would help the country adjust to the volatility in the global markets.
However, Dutertenomics did not go unscrutinized.
Calixto V. Chikiamco, President of the Foundation for Economic Freedom and a columnist of BusinessWorld, noted the gains of the administration during its first year, such as the increase of imports, the flexible exchange rate, the increasing working population, and the robust manufacturing growth.
Nevertheless, he said that the “growth doesn’t look inclusive.” “The unemployment rate is the highest in two years at 6.6% and the inflation rate is going up because food inflation is going up.” Citing a recent survey of the Social Weather Stations, he added that more Filipinos have identified themselves as poor despite the growth in GDP.
“There’s a negative investment environment in the rural areas,” he added, flagging the moratorium in land conversions, the raid on Lapanday last month, and the lack of action on the agrarian reform bills despite being a priority measure of the administration. “These have poisoned the environment for investments in agriculture.”
He also called on the government to pass a sustainable forestry management act, instead of carrying on with its total log ban policy, which he said “only increases rent”.
On mining, he said that he hoped that Environment Secretary Roy A. Cimatu would provide a more balanced view on the sector as opposed former Secretary Regina L. Lopez’s strict anti-mining stance.
“Official development assistance (ODA)s suffer from tight suppliers and foreign exchange exposure, sometimes the economic considerations are not taken into consideration,” he added, referring to the government’s acceptance of foreign aid.
This has prompted Mr. Chikiamco to say that the government “has not shown the capacity to execute and deliver. There’s still a problem in execution.”