#PHFightAPEC for its hand in the erosion of the PH economy under heightened globalization

September 24, 2015

by superadmin

The Aquino administration is globalization’s poster child

The Philippines’ second hosting of the Asia Pacific Economic Cooperation’s (APEC) high-level meetings courtesy of the Aquino administration after two decades finds the country deeper in the quagmire of underdevelopment. This is the cumulative result of intensified implementation of globalization policies that APEC has facilitated.

Since the first hosting in 1996 when the Ramos administration was at the height of promoting globalization as a vehicle for development, APEC has effectively lobbied for greater trade and investment liberalization and raised measures that have been eventually tackled by the World Trade Organization (WTO) and elsewhere. The Manila Action Plan yielded by the 1996 conference additionally stressed on wider range of trade and investment liberalization, specifically more transparent tariff nomenclature, intellectual property rights and trade in services. It raised an information technology (IT) agreement that was later clinched by the WTO in 1996, which reduced tariffs on 200 more IT products. The Manila Action Plan would precede economic policies that have gravely undermined the country’s production sectors, worsened employment and poverty levels to unprecedented scales.

APEC-facilitated trade liberalization has reduced tariffs to lowest levels and worsened the country’s trade deficits, significantly in food and agriculture. Tariff levels have fallen from approximately 26% in 1996 to 5% in 2012 for manufacturing goods and from 36% to 10% in the same period for agricultural products. As of 2012, the Philippines has among the lowest agricultural tariffs and the lowest non-agricultural tariffs in Asia.

Increasing trade deficits have rendered the country more and more import-dependent and threatened its food self-sufficiency. In 2010, for instance, 19% of rice, 54% of mongo and 65% of garlic, among others, were imported. Opening the economy further through lower tariffs also opened the floodgates for smuggling. The aggregate impact of this globalization onslaught is reflected in the shrinking share of agricultural production ingross domestic product (GDP) from an average of 21.3% from 1991-2000 to only 10.8% from 2011-2014, the lowest in the country’s history.

APEC’s facilitation of investment liberalization has further pushed the country’s de-industrialization, pulling down the role of Philippine manufacturing in any prospect for national development. Industry is also so foreign-dominated, institutionalized further by the globalization mantra of investment-led industrialization and the Philippine government’s adherence by creating conducive environment to attract foreign investments.

The average share of manufacturing in GDP from 1995-2000 at 25% has fallen to its lowest average level in almost six decades at 22.6% from 2010-2014. Yet transnational corporations (TNCs) in the top 1000 corporations in manufacturing accounted for almost 70% of the earnings yearly from 2004-2013.

Foreign investments increased annually by 54.6% in the last two decades, while job creation fell by 4% every year on the average in the same period. Unemployment and underemployment combined rose from 8.3 million in 1996 to 12.2 million in 2015, representing the worst jobs crisis in Philippine history.

Small and medium enterprises (SMEs) comprise 61% of Philippine enterprises. Yet, yearly since 2000, around 2,520 Philippine enterprises have been closing down due to economic liberalization, according to the labor department. Yet, the current APEC meeting is pushing for SMEs’ further integration into the ‘global value chains’ as adjuncts of the global economy, killing further the country’s remaining local capitalists.

Poverty levels have worsened in the last 10 years and seemingly remained unchanged in the last two decades only because of changes in the method of counting the poor. APEC and globalization instruments have also introduced myopic poverty reduction measures such as conditional cash transfer (CCT), which have only served as smokescreen for the harsh impact of globalization. Despite increased budget for an expanded CCT under the Aquino administration, some 65 million Filipinos continue to struggle on Php125 or less per day. Severe inequality has worsened in the last two decades, with the net worth of the country’s billionaires increasing by 250% in 2015 while real wages have only slightly improved by 3.5 percent.

The Aquino administration is globalization’s poster child, having pushed the country as fastest-growing and most business-friendly economy in the region. In continuous pursuit of neoliberal policies, the Aquino administration has heightened the neoliberal offensive through public-private partnerships, promotion of the economy in the global value chains, trade facilitation, and greater investment liberalization. Its hosting of the APEC in November 2015 however shall come in the midst of growing people’s discontent with worsening jobs crisis, poverty and diminishing and increasingly becoming unaffordable social services and public utilities.

With the harsh impact of APEC’s facilitation of the onslaught of globalization, the Filipino people are not to be deceived by the upcoming conference’s thrusts on food security, SMEs, so-called blue economy, and disaster resilience. As they have done with the offensives of neoliberal policies in the past decades, the Filipino people will expose and resist APEC.