The country’s decelerating growth highlights how the recent episode of relatively rapid growth is artificial and unsustainable
Research group IBON debunked Malacanang’s claim that the economy is going strong amid calls for Pres. Aquino’s ouster. On the contrary, the slowing growth in 2014 debunks the much-hyped economic miracle and weakens the administration even on the economic front.
According to IBON, the country’s decelerating growth highlights how the recent episode of relatively rapid growth is artificial and unsustainable. Economic growth, which slowed to 5.8% after just two years, will likely register a much lower full-year figure than in 2013. The growth slowdown from its peak in 2013 will most likely continue in 2015 because the drivers of growth, like in the past, are short term and will likely be offset by the effects of the economy’s unsound fundamentals.
Malacanang has hyped supposed economic achievements to dismiss growing calls for Pres. Aquino to step down because of the Mamasapano fiasco and the controversy surrounding the Disbursement Acceleration Program (DAP).
The research group added that aside from growth, other economic indicators are also not moving as favorably. Since 2010, savings rates have fallen from 32.7% of gross national income or GNI to an average of 30.2% in 2011-2013. Capital formation has also fallen from 17.3% of GNI to an average of 17% in 2011-2013.
Revenue effort and tax effort have been slowly rising since 2010 but they are still below recent peaks under the Arroyo administration. The revenue effort of 14.9% of GDP in 2013 is lower than the 16.5% achieved in 2007, while the tax effort of 13.3% in 2013 is lower than the 13.6% in 2008. Growth in per capita GDP also slowed last year despite slower population growth.
Aside from these indicators, the more relevant measurements of development are also not improving as the jobs crisis continues and poverty persists. According to IBON, the slowing economic growth, severe inequality and deepening corruption are intensifying social unrest. Creating the illusion of a healthy economy despite difficult social realities will not prevent the people’s growing opposition, the research group said. (end)