Category: economy

Philippines’ City of Illusions: Time for an Economic ‘EDSA Revolution’

Richard Javad Heydarian

Earlier this year, I was astonished by a commercial, which features no less than Leonardo Di Caprio, Robert De Niro and Martin Scorsese, who playfully endorse a luxurious and lavish new casino and integrated resort in the Philippines, City of Dreams Manila. By all means, both the glossy commercial as well as the casino itself is impressive, if not obscenely ostentatious. One could witness the City of Dreams‘ captivating exterior after passing by a nearby competitor, the Solaire Resort and Casino, which stands as a worthy rival to the new kid in town.

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The economy grew—so what?

By Mahar Mangahas

A week ago (8/27/2014), Socioeconomic Planning Secretary Arsenio Balisacan was pleased to report that economic growth had accelerated to 6.4 percent/year, adjusted for inflation, in the second quarter of 2014. He touted the Philippines as the second fastest growing economy among major Asian countries, with its growth rate equaling Malaysia’s and topping Indonesia’s 5.1 percent and Thailand’s 0.3 percent.

Some technicalities. How well does economic growth signify betterment of the people’s economic wellbeing? The cited number of 6.4 is specifically the growth rate of the Gross Domestic Product (GDP). It is the aggregate of production and also of income—since value-added in production is also value-earned as income—within Philippine domestic territory, including that of foreign entities based in it.

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For my yaya and all our OFWs

By Nicole del Rosario CuUnjieng

… Ana is but one of the now overseas Filipino workers (OFWs) whom our country has failed. Our political-economic system has not provided adequate resources and support to make upward mobility possible, so those without opportunity have voted with their feet and left our country. Invest Philippines writes: “Remittances from the nearly 10 million Filipinos abroad are the biggest change of the past decade in the Philippine economy…Remittances from Filipinos working abroad have become the economy’s second largest source of foreign capital…They have created an underlying floor for the economy that some economists believe accounts for about 4% annual economic growth and shielded the conservative Philippine elite from pressure to reform the status quo.”

Given the continuing and egregious inequality in our country, we likely would have already had a revolution had employment abroad not created a valve to release such social and economic pressure. Yet, even as the sweat of our overseas workers—who endure predatory exploitation and sacrifice their lives—provides crucial ballast to our economy, inclusive economic growth eludes us. The government hails the OFWs as the “bayani” of our country, and they truly are, yet such heroization of and support for the massive exportation of our people does not absolve our government and society from their duties to provide opportunity for Filipinos in their own country.

A friend in Hong Kong calculated for me what her maid earns working 4-5 days a week for her there. After subtracting the cost of her Hong Kong rent, she has approximately P42,000 a month. A public school teacher in the Philippines teaching two shifts of kindergarten students for 12 hours a day may make as little as 6,000 pesos a month. No wonder our country’s teachers, nurses, and even doctors continue to prefer to live as second-class citizens in Hong Kong, Qatar, and still more distant shores. They live their whole lives away, in the borrowed quarters of somebody else’s life, with somebody else’s family, taking care of another’s baby, while their own children grow up not knowing their mothers. We cannot continue to allow them to prop up our country while domestic corruption and indifference to the plight of our impoverished both at home and abroad squander their sacrifice.

The elite get off easily in this. The poor just want to get by, and so the rich feel no true pressure from them to implement socially progressive reforms or to create the conditions for others to share in their good fortune. Some anomalous examples of wealthy, self-made professionals exist, but largely what we have seen over the last half century in terms of change and of true wealth creation are merely the up-and-down movements of those who already had some kind of foot in the game. The idea of doing well for oneself here–of becoming wealthy in a legal and plausible way–does not exist for the vast majority of our people. While I understand that the reasons our economic growth has largely been jobless growth are myriad and complex, and that a deepening manufacturing sector portends more inclusive growth in the coming future, our measure of success as our economy grows must be our ability to lift people out of poverty and to create opportunity and possibility here at home. This is particularly owed given the painful source of much of the economic growth enjoyed over the last decade, and the lives that were sacrificed for it along the way.

Why the Philippines Failed?

… In Why Nations Fail, economists Acemoglu and Robinson provide a brilliant explanation on how progress and development is largely a function of ‘inclusive’ — as opposed to extractive — governance. Using their dichotomy, the Philippines clearly falls within the extractive category, whereby the core-elite have blocked appropriate policies, which would have made the country a true democracy, anchored by a large middle class, an entrepreneurial sector, and strong institutions spurring growth and innovation. Therefore, in many ways, the developmental failure of the Philippines has something to do with its weak and divided state, which seldom had the right ‘policy space’ to make optimal economic decisions. Throughout the post-War period, the Philippine state has either been at the mercy of entrenched elites, pushing for particularistic interests and blocking policies/legislations aimed at national development, or international financial institutions (IFIs), which have prescribed counterproductive policies, notably ‘Structural Adjustment Programs’ (SAPs), causing tremendous poverty, social dislocation, agricultural decline and ‘de-industrialization’ across the developing world. Sometimes, the Philippines was at the mercy of both...

~ Richard Javad Heydarian