The Philippine Online Chronicles

Part 1

The political noise generated by the showdown between Malacañang, the Arroyo camp, and the Supreme Court (SC) towards the end of 2011 drowned concerns on the anemic performance of the economy. Critics of President Benigno S. Aquino III even argue that the energy of government is being spent too much on going after Mrs. Gloria Arroyo. Consequently, they said, important issues like the slowdown in economic growth are left unaddressed. The most rabid allies of Arroyo even go as far as claiming that Aquino is reversing the supposed gains achieved by the economy during the previous administration.

However, the deteriorating economic performance and social conditions are not simply the result of Aquino’s mismanagement as often alleged by critics and the political opposition. Much of it is due to the lack of real policy reforms that can shift the course of the economy from that taken by Arroyo and previous governments. This has been the underlying reason behind Aquino’s continuing failure to turn the economy around and improve the lot of our people.

Inclusive growth?

In March, the Aquino administration approved the Philippine Development Plan (PDP) 2011-2016 which details the policies and programs that it intends to pursue throughout its term. Supposedly, the primary aim of the plan is inclusive growth that is unlike the trickle-down and jobless growth the economy had in the past. To achieve inclusive growth, the PDP promotes good governance and anti-corruption that are expected to create massive job opportunities and reduce poverty.

But aside from being couched in good governance and anti-corruption rhetoric, the PDP does not offer anything substantially different from past medium-term plans. There is nothing in the 400-page document that could create the conditions for inclusive growth as it adheres to the same flawed development paradigm of neoliberal globalization. Like its predecessors, Aquino’s PDP is skewed towards building the most favorable environment for profit-seeking foreign business and their local partners.

Even the much ballyhooed good governance campaign of the administration has been reduced to issues that affect investment decisions and cost of doing business in the Philippines, including the enforcement of contracts and competition measures. Such pro-business environment could only come at the expense of the toiling masses and other oppressed sectors including small Filipino industries.

To conceal the bankruptcy of globalization policies like its centerpiece program public-private partnership (PPP), Aquino is scaling up the foreign debt-funded conditional cash transfer (CCT) scheme. According to the PDP, the CCT “shall be the cornerstone of the government’s strategy to fight poverty.”

By insisting on a development model that depends on unreliable external sources of growth mainly from the US and other advanced capitalist countries, Aquino’s PDP is oblivious to the glaring failures of past medium-term plans and the lessons of the ongoing global crisis. Since 2008, many developed countries have been implementing protectionist measures, which for the PDP, are “policies that distort competition” and “are the main impediments to growth.”

For big business

To achieve inclusive growth, the PDP has set a target of an annual expansion in the real gross domestic product (GDP) of 7-8% and an annual net employment increase of one million jobs from 2011 to 2016. The PDP aims to do this by promoting what it described as areas with “the highest growth potentials and generate the most jobs.” The PDP listed them as tourism; business process outsourcing (BPO); mining; agribusiness and forest-based industries; logistics; shipbuilding; housing; electronics; and infrastructure.

It is not by chance that these are the same priority areas being lobbied for government promotion by the Joint Foreign Chamber of Commerce of the Philippines (JFC) to supposedly increase investment and create jobs in the country. The JFC is composed of the chambers of commerce of the US, Japan, Europe, Canada, Australia-New Zealand, and South Korea as well as the Philippine Association of Multinational Companies Regional Headquarters.

This underscores how medium-term plans, including Aquino’s PDP, are shaped not by the specific development needs of the country and its people, but by the particular interests of outside investors forever looking for the most profitable means to cash in on the domestic economy. Filipino micro, small, and medium enterprises (MSMEs), on the other hand, are still reduced to mere adjuncts of foreign business and exporters, and not as dynamic players in domestic production.

The PDP’s priority areas are long held as supposed drivers of growth and employment but have until today continued to fail to induce sustained economic growth, much less address the chronic job scarcity and reduce poverty. They fail because while they may attract some capital and create some jobs, they are not anchored on any long-term national industrialization plan that promotes and relies on domestic production and consumption. They have always been driven by what is profitable for foreign investors and what meets the appetite of the global market, specifically of the developed world.

This has been the case, for instance, in foreign-dominated extractive industries like mining, agribusiness, and forestry which have only plundered the country’s natural wealth to satisfy the need for raw materials of advanced capitalist economies. Export-oriented manufacturing, including electronics, has only exploited cheap Filipino labor and has no significant linkages to the domestic economy. The fast rising BPO industry, meanwhile, is also illustrative of how “growth” has become detached from the specific requirements of the domestic economy as it caters to First World industries and produces jobs that are alien to most unemployed Filipinos.

To be continued