A tale of two Presidents
I heard a story about how President Ramos quarterbacked the country’s response to the collapse of the Thai Baht in July 1997 when the BSP Governor and the Secretary of Finance often found themselves at odds in steering the economy through the oncoming financial storm. Ramos ended his term in a fine display of skillful crisis management: The Philippines survived the worst part of the economic meltdown relatively unscathed as Ramos’ term was winding down.
When Joseph Estrada assumed the Presidency in June 1998, the economy had somehow started heading south as the impact of the crisis spread throughout Asia. The country registered negative overall growth in 1998. The lackluster economic performance continued even as our neighboring countries started to turn the corner.
Noynoy Aquino and the economy
Noynoy’s critics argue that the Philippine economy grew throughout his term despite his performance. We can go into a lot of detail about what Noynoy’s government did to contribute to the economic growth but that would turn this simple blogpost into an academic paper. I will merely cite the anecdote about FVR and Erap to argue that, for better or worse, the competence of the President and the soundness of his policies do have a substantial impact on national economic performance. I will also point out that during Noynoy’s term, the great majority of countries across the globe experienced economic difficulties as contagion from the slowdown in the US, Europe, and China affected them. The Philippines’ growth was actually being driven by domestic demand more than by the performance of our trading partners. It was the growing affluence of our people as a whole and their confidence about their future that drove our country’s GDP growth in the last few years.
Another commonly foisted argument that it is just the corporate interests that benefited from the Aquino government. This simply does not hold water – companies need to sell to people to make their profit targets. Our economic resiliency stems from strong domestic demand.
The future with Mar Roxas
There is no debate that the benefits of economic growth should be more inclusive. Many have benefited in the past but many, many more need to have access to education, to employment opportunities, to medical services, and to a clear path out of poverty. Only Mar Roxas among our Presidential candidates has the training and the experience to manage a complex and frustratingly dynamic superstructure as our national economy. Singapore has a battery of well-trained and well-experienced technocrats to run its economy of 5.5 million people. With all due respect to all his achievements in Davao, the country cannot be run by an aging, provincial mayor with a penchant for the crude, anachronistic, and insensitive responses.
I have seen articles that try to assuage our people that the economy has sufficient momentum from the Aquino years and that we should be fine irrespective of who wins the election. I believe that this is what the brokers at the Philippine Stock Exchange are thinking. I beg to disagree. The recent experience with the transition from FVR to Erap tells me that without Mar building greater momentum and reaching that tipping point in about two more years where the Philippines will most certainly be top Asian tiger, we might just find ourselves regressing to the global mean – less jobs, less opportunities, spreading poverty and greater unrest. In the latter case where Mr. Mayor becomes President, the poor and dispossessed can only get more disappointed, disillusioned, and angry. (PSE brokers with your heads in the sand, this means declining stock prices.)
For the sake of the country, who are you voting for now?