Build, build, build” is the new mantra of the Duterte administration, and it echoed as our top infrastructure officials joined Cabinet economic managers in the “Dutertenomics Forum” held earlier this week.
I was invited to share my own reactions to Dutertenomics from my perspective as economic manager in the Ramos Cabinet (1992-’98). The forum highlighted the “Golden Age of Infrastructure” that the government promises over the next six years, bent on narrowing the wide gap that developed over the years with our neighbours in terms of quantity and quality of infrastructure. Indeed, if Dutertenomics succeeds in delivering on this – and with our past track record, there are many sceptics out there – a lot of other things will fall into place. Even so, our neighbours have announced similarly aggressive moves to beef up their infrastructure. So even as we attempt bridge domestic gaps, the gap with our neighbours may not necessarily narrow.
My own response to Dutertenomics spanned six points: 1) We have been on a roll; 2) Our foreign partners all matter; 3) We still lag behind the region; 4) Dark clouds are forming; 5) Dutertenomics is on the right track, mostly; and 6) A hidden time bomb is ticking for us.
On the first, the audience applauded the fact that our current economic managers have consistently credited the good work done by our previous leaders for the economic momentum we’ve enjoyed over recent years – a welcome change from the blame-throwing and credit-grabbing of the past. That we are on a roll is evident in the “breakout mode” enjoyed by the economy since 2010, be it in price stability (much lower inflation rate), jobs generation (declining domestic unemployment rate even as growth in overseas worker deployment has dramatically slowed), or GDP growth.
In the spirit of candidness that marked the forum, I pointed out how our top sources of trade, foreign direct investments and remittances include countries that have been lashed by President Duterte’s foul language of late – and that the least have been those he has shown special favour to (China and Russia). Even if this pivot dramatically boosts such inflows from them, the size of their economies means these cannot possibly make up for potential losses in the US and European markets, still the world’s largest. In short, “inclusiveness” as an objective should apply to our foreign economic policy as well. That is, let us forge new partnerships, but not forsake traditional ones.
The reality is, even after a substantial boost in exports and an eightfold rise in our average annual FDI inflows, we still trail our neighbours, and in the case of exports, are even farther behind. I also sounded the alarm over brewing “dark clouds,” seen in a renewed rise in inflation and unemployment rates, and slowing (albeit still rapid) growth, stressing the need for vigilance and reform consistency. Again, I candidly pointed out a few things that have no place in Dutertenomics: restrictive rice trade policies; populist deviations from Finance Secretary Carlos Dominguez’s proposed tax reform package; extreme policies on labour, land and natural assets; and having “UP” (that is, uncoordinated policies) rather than “UST” (unity, solidarity and teamwork – the hallmark of the Ramos Cabinet). – Philippine Daily Inquirer/ANN
Cielito F Habito headed the Philippine National Economic and Development Authority and was Socio-Economic Planning Secretary from 1992-’98.