In\nhis fourth State of the Nation Address (SONA), President Duterte did not admit\nthat the economy is on a slowdown and that the country\u2019s production sectors are\ndeteriorating. Instead, the President harped on deceptive, business-biased\npolicy proposals that at the very least do not address the basic problems of\nthe economy, and at worse, may aggravate economic woes. Government should build\npolicies upon an honest recognition of the country\u2019s real situation.<\/p>\n\n\n\n
Slackening\neconomy ignored<\/strong><\/p>\n\n\n\n Nowhere\nin the President\u2019s SONA was it mentioned that the country\u2019s economy has been\nslowing from 7.1% growth of gross domestic product (GDP) in the third quarter\nof 2016 to 5.6% in the first quarter of 2019. Growth fell rapidly even after a\nmomentary increase to 7.2% in the third quarter of 2017. This slowdown was\nhappening long before the 2019 national budget impasse and the election ban on\ninfrastructure spending and despite record levels of foreign investment\nreaching US$9.8 billion in 2018.<\/p>\n\n\n\n It\nwould have been important for the President to note this and admit that the\nslowdown is due to reliance on unsustainable, external sources of growth:\nSlowing overseas remittances (average growth rate fell from 15.5% annually in\n2002-2008 to 3.7% in 2017-2018) and a slowing business process outsourcing\n(BPO) sector (average growth rate fell from 43% annually in 2005-2009 to only\n2.7% in 2017-2018) that impacted on real estate, renting, and business activities.\nHousehold spending, export of services (including BPOs), capital formation\n(including construction), and government spending also slackened. <\/p>\n\n\n\n This\npoints to the urgency of developing sustainable long-term drivers of growth\npertaining to more vibrant agriculture, dynamic Filipino industry, and\nequitable distribution of economic gains. In his SONA, however, the President,\nthough acknowledging the need to boost agriculture and jobs, stuck to the same\ntype of market-oriented measures that perpetrate underdevelopment and\nbackwardness.<\/p>\n\n\n\n Hampering\nagriculture <\/strong><\/p>\n\n\n\n Pres.\nDuterte vowed to continue investing in agriculture programs to increase the\nincome and productivity of small farmers and fisherfolk. In particular, he said\nthat government will ensure the full implementation of the Rice Tariffication\nLaw\u2019s Rice Competitiveness Enhancement Fund (RCEF) to safeguard the livelihood\nof small farmers.<\/p>\n\n\n\n But\nthe RCEF amount of Php10 billion annually for six years, which government\nclaims will fund farm inputs and operations, is dismally low compared to\nVietnam and Thailand agriculture subsidies. Hugely the funds will be used to\npurchase commercial equipment, seeds, and services for distribution to local\ngovernment units and certified farmers organizations. RCEF is prone to patronage\npolitics and might marginalize rather than benefit farmers. Peasant groups also\nfear that the removal of restrictions on rice importation will displace over 2\nmillion rice farmers and imperil the local rice industry with the influx of\nimported rice.<\/p>\n\n\n\n By\nsourcing the Philippine staple from a volatile world market and allowing\nunlimited albeit tariffied rice importation, rice tariffication threatens\nfarmers\u2019 livelihoods and the country\u2019s food security. It does not address the\ncurrent state of shrinking agriculture. The sector lost over a million jobs\nfrom 2016-2018, and barely grew at 0.8% in 2018 and in the first quarter of\n2019. Its 8.2% share of GDP in the first quarter of 2019 is its smallest ever\nshare of the economy, yet 2019 budget allocation to agriculture was reduced by\nPhp3.4 billion from an already low Php50.7 billion in 2018 to just Php47.3\nbillion in 2019.<\/p>\n\n\n\n Instead\nof pushing rice liberalization, which will benefit rice importers and private\ntraders more than local rice farmers and rice-eating Filipinos, the government\nshould preserve its mandate to procure a minimum of 25% of local produce to\nsell at a reasonable price that will influence market rice prices to be\naffordable. There should also be a genuinely distributive and free land reform\nprogram to liberate farmers from having to amortize awarded land, and\nsubstantial agriculture support and subsidies from domestic industries that\nwill truly aid in raising productivity and incomes instead of burdening the\nsector with conditional support and mounting debts.<\/p>\n\n\n\n Stifling\nFilipino industries<\/strong><\/p>\n\n\n\n The\nPresident also did not address a manufacturing sector that appears to be\nstalling. Manufacturing growth was just 4.9% in 2018 \u2013 the slowest since 2012 \u2013\nand slowed further to 4.6% in the first quarter of 2019. The sector remains\nshallow and mostly disconnected from the local economy due to being\nforeign-dominated and capital-intensive in export enclaves. As a result,\nemployment generation has been relatively weak. Manufacturing employment\nincreased by just 221,000 or 6.5% between 2016 and 2018, with even a\ncontraction of 101,000 reported in April 2019, according to official labor\nforce data.<\/p>\n\n\n\n Instead,\nhe praised the Tax Reform for Acceleration and Inclusion (TRAIN) for helping\nfund government programs, and pressed for the enactment of the Tax Reform for\nAttracting Higher and Better Opportunities (TRABAHO) to energize micro, small\nand medium enterprises (MSME\u2019s) and generate more than a million jobs. <\/p>\n\n\n\n But\nTRABAHO is a misnomer because its focus is not on creating the stable jobs that\nFilipinos need, but on lowering corporate taxes and rationalizing incentives.\nIt in fact adds to the regressiveness of TRAIN, which relieves the rich of\npersonal, estate and donor taxes, by increasing corporate profits and the\nwealth, income, and property of the rich. On the other hand, government will\nmake up for the resulting losses in tax revenues through indirect levies which\ntax consumption \u2013 including by mostly low-wage workers and low-income Filipino\nfamilies \u2013 regardless of their lack of wealth, income and property. <\/p>\n\n\n\n The\nPresident\u2019s recommending TRABAHO for MSMEs in his speech diverts from MSMEs\u2019\nbeing mostly in the service sector wherein jobs are usually temporary and\nlow-paying: the top five MSME industries are wholesale and retail trade, repair\nof motor vehicles and motorcycles, accommodation and food service activities,\nmanufacturing, service activities, and financial and insurance activities. The\nmanufacturing sector would potentially be a generator of stable jobs, however\ncontractualization is rampant. The transnational corporations-dominated sector\nhas even seen Filipino workers suffer poor working conditions and stifled labor\nrights.<\/p>\n\n\n\n Not\nonly do Filipinos need more jobs, the people need quality jobs. But behind the\nhype of improved employment are signs of a persistent jobs crisis that no\ncorporate-biased policy intends to cure: over 11 million of the combined\nunemployed and underemployed, and almost 28 million of the employed being in\ninformal, non-regular, or agency-hired work. <\/p>\n\n\n\n Reorient\nthe economy<\/strong><\/p>\n\n\n\n Filipino\nfirms must instead be built, sourcing materials from a robust agriculture, and\nbuilding across consumer, light to heavy industries that will supply the people\u2019s\nand the nation\u2019s needs. This removes the need to rely on \u2013 or be limited to \u2013\ncommercial sources. This will also certainly improve production, stimulate job\ngeneration, increase working Filipinos\u2019 incomes, and enliven economic activity\nboth in the rural and urban areas.<\/p>\n\n\n\n All these mean that the government should thwart its business bias so that the country\u2019s economic direction can be refocused to truly prioritize the people\u2019s well-being and national development. This has not been the course of the Duterte administration as evidenced by the neoliberal policies highlighted in his SONA such as rice tariffication and TRABAHO.<\/p>\n\n\n\n Photo from Garciabillyjoe | wikipedia.org<\/em><\/p>","protected":false},"excerpt":{"rendered":" In his fourth SONA, President Duterte did not admit that the economy is on a slowdown and that the country\u2019s production sectors are deteriorating. Instead, the President harped on deceptive, business-biased policy proposals that at the very least do not address the basic problems of the economy.<\/p>","protected":false},"author":3,"featured_media":8456,"comment_status":"open","ping_status":"open","sticky":false,"template":"single-nosidebarbanner.php","format":"standard","meta":{"_acf_changed":false,"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":"","_expiration-date-status":"saved","_expiration-date":0,"_expiration-date-type":"","_expiration-date-categories":[],"_expiration-date-options":[]},"categories":[2048,3],"tags":[2054,347,116,2047],"acf":[],"_links":{"self":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts\/8455"}],"collection":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/comments?post=8455"}],"version-history":[{"count":3,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts\/8455\/revisions"}],"predecessor-version":[{"id":9281,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts\/8455\/revisions\/9281"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/media\/8456"}],"wp:attachment":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/media?parent=8455"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/categories?post=8455"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/tags?post=8455"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}