Thursday, 29 November 2012

Philippine economy grows thanks to private sector

Jojo Robles
Manila Standard

With almost no help at all from government, the national economy grew impressively and beyond all expectations in the third quarter. And the top Aquino administration finance official said this is proof that “Aquinomics” is supposedly working.

It’s true that the gross domestic product rose by 7.1 percent from July to September. But before government tries to grab all the credit for this good news, it’s important to see how the surprising growth took place.

According to National Statistics Coordination Board, which released the official economic figures on the third quarter yesterday, the growth was driven by the services sector, which grew by 7 percent during the period. The industry sector also posted growth for the fifth consecutive quarter, growing by 8.1 percent, while good weather made the agriculture sector expand by 4.1 percent.


Indeed, despite the claims of administration officials, it was the private sector that did all the heavy lifting during the period. There were no major, big-ticket government projects begun, no significant private-public partnership schemes that went online, no arrival of significant investments (the foreign direct kind, not the hot-money variety that is flooding the stock market) as a result of novel government schemes like tax holidays and such like.

To borrow one of President Noynoy Aquino’s favorite expressions, “minana lang namin ito” [We just inherited this]. Of course, Aquino often says this when referring to the supposed problems that he has had to deal with that were left behind by his predecessor.


Indeed, by far the best thing that Aquino ever did for the economy was not to do anything—or not to do enough damage to things that he knows nothing about. One of these is retaining Bangko Sentral ng Pilipinas Governor Amado Tetangco.

Tetangco has helped keep a tight watch on interest rates, dollar reserves, the exchange rate and the banking industry, fine-tuning the economy as it weathers the continuing economic slowdown that is besetting both the Eurozone and the United States. Aquino’s economic managers, on the other hand, have only scared investors with their tax-to-the-max schemes, the unfriendly and protectionist regulatory environments they have created and their failure to rein in smuggling and meet revenue targets.


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