IT HAS been sometime since I last wrote something for this column. Let’s just say that it was a writer’s hibernation, which took me around a year’s time to recover. After waking up from a slumber, I thought of looking at the state of our economy. Unfortunately, there have been very few (in number) or little (in degree/extent) change in the country’s economy since I went into hibernation, where there are still puppet economic managers, puppeted by a man who despises economics, and proliferated by his ki**-a** die hard supporters in government service and of course, the trolls.
Inflation rate is below one percent, which should not be celebrating much because the prices of goods and services are still increasing but now at a lower rate of increase. It also has implications to other indicators like unemployment rate. There may be an increase in the number of people who are unemployed as a result of this very low inflation. Besides, it is below the BSP’s target from 2% - 4%, so there may be a need to review the country’s existing fiscal or monetary policies addressing.
News on the falling prices of palay. This, apparently, is discouraging our farmers, blaming this on the implementation of the Rice Tariffication Law (RTL). Although it is true that our country has a food security problem (especially that we are heavy rice eaters), the RTL aims to improve the farmers’ productivity in order for them to have sustainable livelihood in the long-run. The tariffs collected from the importation of rice should be given as subsidies to support the farmers, specifically increasing their productivity. Although tariffs are usually imposed to restrict the entry of imports the apparent shortage of rice domestically resulting to an increased volume of rice imports and higher tariff collections. Therefore, there should be no problem on funding the subsidies.
Meanwhile, as a short-run effect, the falling price of palay is something that we should have expected. The increase in the supply of rice in the domestic market due to higher rice imports pushes the price of rice to fall. Since average prices of goods and services in the economy did not increase much as a result of the deflation (decrease in inflation) mentioned earlier, the already decreased price of rice seem to have fallen further. And that is one negative effect of very low inflation.
Meanwhile, Speaker of the House Alan Cayetano believes that the traffic problem, especially in Metro Manila, is a result of an improving economy. What is the basis of his perspective? Well, it is based on the premise that heavier traffic is caused by more (private) cars plying the roads, which means that there are many people have more money, and can afford to buy new cars. This simplistic point of view is expected of him, of course, given his background. The problem is, these statements are usually what the common tao believes, and will be the basis for their opinions.
Traffic is a complex phenomenon that cannot and should not be a basis of a conclusion, whether negative or positive, with respect to the economy. Although it is true that when people are richer, the economy is better. However, for traffic, the detrimental effects on the economy should also be taken into consideration. That is the reason why there are many economic indicators that are released by government agencies like the Philippine Statistics Authority and the National Economic Development Authority. The labor-hours lost in traffic as well as the labor-leisure trade-off are concepts that politicians need to think about, especially legislators who need to come up with relevant and appropriate policies and laws.
Government officials need to be more responsible in releasing statements that tend to mislead people, only with the agenda of injecting their political advocacy, like Federalism, which Cayetano did. As for the common tao, we need to be more discerning also of information, especially coming from politicians. Having to hurdle heavy traffic on a daily basis should provide us more time to reflect.
Lastly, I stumbled upon a news item regarding poverty in the country. The World Bank, apparently, expects that the poverty rate will fall below 20% by next year. Decreasing trend of poverty incidence was seen over the past few years. This year’s figures show a 20.8% poverty incidence, down by around 5% from the previous year’s 26%. Forecasts show that by 2020, poverty incidence will be at around 19.8% and by 2021, 18.7%.
The easing inflation and rising incomes were some factors that affected these forecasts. The continued implementation of Conditional and Unconditional Cash Transfers Schemes will be a vital factor that will also improve the unemployment and underemployment rates, and supported with the low and stable inflation, and eventually, decrease poverty incidence in the country. The Pantawid sa Pamilyang Pilipino Program (4Ps) is to be credited for the decrease of the poverty rate by as much as 1.5%, and decrease in income inequality by 0.6%.
Among the four aspects of the economy that I looked into in this piece, the decreasing poverty incidence is good news to me. These are the fruits of the seeds that were planted by previous administrations from as far back as Gloria Arroyo. This is enough for me to be hopeful of the future of the economy of the Philippines. A giant step towards the economic prosperity that we have always been aiming for. Setbacks, like Political instability, may hinder us towards the goal. It may not happen during this President’s administration, but there is hope that this may be achieved during my lifetime, unless, of course, if I die sooner.