Economy returning to pre-pandemic slowing growth hits poor the worst – IBON

January 31, 2024

by IBON Foundation

Research group IBON said that the fake recovery from the Philippine economy rebounding from reopening is over and the country is back to its pre-pandemic trend of slowing economic growth. It said the economy returned to its trajectory of decline because the Marcos Jr administration is using the same failed strategies of the Duterte administration. The group said that the same old market-driven policies and measures cannot boost the economy and will worsen the situation of millions of Filipinos.

Annual 2023 growth in gross domestic product (GDP) was reported at 5.6%, which was slower than in pre-pandemic 2019 and the slowest since 2011. IBON recalled that from 7.1% in 2016, growth wound down to 6.9% in 2017, 6.3% in 2018 and 6.1% in 2019. The group said the most recent GDP figures puts the economy on the same trajectory of slowing growth that plagued it prior to the pandemic.

IBON stressed Filipinos have always been at the losing end of growth, which has historically failed to lift the majority from poverty, and that slowing growth cannot but hit them the worst.

The group pointed to how the number of self-rated poor and borderline families increased by 1.27 million to 22 million, or 8 out of 10 families, in the fourth quarter of 2023 from the same period the year before, according to the Social Weather Stations (SWS). The number of hungry families grew by almost 500,000 to 3.5 million over the same period, also according to SWS. Meanwhile, the Bangko Sentral ng Pilipinas reports that the number of households without savings rose by 594,000 from 18.6 million in the fourth quarter of 2022 to 19.2 million in the same period in 2023.

The group said that slowing growth in household expenditures is another indication that more Filipinos are hard up and have little to spend. Household final consumption expenditure (HFCE) slowed to 5.6% from 8.3% in 2022. This was also slower than the 5.9% in pre-pandemic 2019 and is the slowest since 2011 (excluding 2020 at the height of the pandemic).

IBON said that growing poverty and hunger among Filipinos belie government claims that the Philippines is “one of the best-performing economies in Asia.” The group also pointed to worsening deindustrialization where the 1.3% growth in manufacturing is the lowest since 2009 (-4.3%), outside of the lockdowns in 2020. The share of manufacturing in GDP has correspondingly fallen to 17.9% or its lowest in 75 years since 1949, while agriculture’s 8.6% share is down to its lowest in history.

The group said that these are at the root of the economy’s inability to create enough decent work and increase household incomes for the majority. They are the inevitable result of the current administration refusing to change its overly market-driven and misguidedly globalization-oriented economic strategy.

IBON said that there is more than enough evidence about the worsening plight of tens of millions of poor and vulnerable Filipinos, and that the Marcos Jr administration should stop glossing over how bad the economic crisis really is. This insensitivity fuels demands for the government to take on meaningful and radical measures such as strengthening domestic agriculture and industries to create decent and sustainable jobs and bring the economy forward.