Asian Development Bank on Philippine Economy

This is from the Tribune a left leaning Manila daily. It is surprising that the article says nothing about income distribution. This is surely as important as economic growth especially for leftists one would think. The Tribune is consistently anti-Arroyo.


In Gloria’s fantasy world


EDITORIAL


08/05/2007

The Asian Development Bank (ADB) had a lot to say lately about reality and fantasy.

The ADB study came out immediately after that earth-shaking Gloria hype in the State of the Nation Address about the Philippines joining the ranks of industrialized countries in 20 years.

Just as it is fantastic, incredible and unbelievable, Gloria had chosen the line as her signature cry, which is typically Gloria — an overdose of spin and empty in substance.

The report stated that at the rate the country is growing, at an average of less than five percent each year, it would take 77 years to reach the economic status of Brunei Darrusalam today.

Brunei has the highest per capita income in Asia, which is not even considered First World in the Western definition and even if the local economy grows at the scorching pace of China, it would still take 25 years for the country to approximate First World development.

The country’s per capita income, or the average that a Filipino earns each year or an equivalent of 16,663 Hong Kong dollars is sandwiched between those of Indonesia, which has a higher per capita income of HK$18,427 and Mongolia, $15,104.

Among the countries in the Association of Southeast Asian Nations, the country’s per capita income is only higher than those of Vietnam, Laos and Cambodia.

Thailand, which used to be a country that has an economy equal to that of the Philippines, had sailed far ahead with a per capita income of HK$39,086.

On ADB’s study on gross fixed capital formation, which mainly measures investments in infrastructure, the ADB says, this provides a gauge on the potential for future growth of the country. The Philippines is 18th of 22 countries in the ADB study with a per capita real gross fixed capital formation of HK$1,914, which is the amount, averaged per person, spent mainly by the government for roads, bridges and electricity network and other services each year.

At an exchange rate of about P7 per HK$1, spending for infrastructure in the country is about P14,000 per person a year, which is what is being spent in exchange for the ever-rising direct and indirect taxes paid by Filipinos each year.

The Philippines, by this measure, was far below the level for even the potential of a decent economic development in the region.

The country has a bigger capital formation only compared to Pakistan, Bangladesh, Nepal and Cambodia, and is even outstripped in such investments by Sri Lanka, Vietnam, Indonesia and Laos.

The ADB’s released study seems to have been made to slap Gloria back into reality.

The Philippines is barely moving, economically, during her term. Just last week, traders said they would be struggling to meet an exports target of 11 percent for the entire year due to the slowdown in the US economy and the appreciated value of the peso, which had pushed up the dollar price of local commodities for exports.

The only strong sectors of the economy are services that include the call center business and telecommunications, and shopping malls which are being mainly fed by transfers from Filipinos working abroad.

Gloria’s repeated chanting of a First World status in 20 years either shows that she is living in a world of her own or that she is not serious in putting the country into a true development path or both.

Sticking to an obvious fantasy in supposedly showing her determination produces a negative effect on Filipinos rather than inspiring them to greater heights.

Gloria could care less. Her world says the Philippines is well and good even if the entire country is reeling in despondency over the worsening economic and social condition.

First World in 20 years?

Everything is possible in Gloria’s fantasy world.