Philippines still poorest among Asean 5, despite ‘gains’

By Luis Leoncio 

The glowing claims of President Aquino on the economy, notwithstanding, the Philippines remains the poorest among the original five members of the Association of Southeast Asian Nations (Asean 5), former Budget Secretary Benjamin Diokno said. 

Now a professor at the University of the Philippines School of Economics, Diokno also continued to bash the government for its underspending, which he blamed for the country’s manifold woes.

“The total underspending for 2011 to 2014 was a mind-boggling P529 billion. Finance Secretary Cesar Purisima sees underpsending as a virtue; I see it as epic incompetence,” Diokno said.

Mr. Aquino said in his last State of the Nation Address (Sona) the economy achieved the highest-ever average growth of 6.8 percent under any administration. The figure, Diokno said, was “not remarkable” when ranged against the counntry’s Asean 5 peers.

Diokno also disputed the President’s claim that the Philippines has become “Asia’s Rising Tiger” and “Asia’s Bright Spot” during his term.

In his “Real State of the Nation Report,” Diokno said that, from 2001 to 2013, the economy has always been featured with “growth spurts” during election years.

“What is the lesson there? Maybe we should have an election every year (for sustained strong growth),” he quipped.

While Mr. Aquino took pride in the growth rate, Diokno said the claim was not accurate since 2010, an election year, when the gross domestic product (GDP) grew 7.6 percent, should be credited to former President Gloria Macapagal-Arroyo because of policy lag on the economy. In reality, the Philippines has remained among the poorest in the Asean region, Diokno said.

Data he provided showed the economy has grown, but the country remained the poorest among the Asean 5 economies, with gross GDP per capita of $2,790, or roughly a mere 5 percent of Singapore’s $54,776 per capita.

Also out of 144 countries, Singapore ranked ninth in terms of Human Development Index (HDI); the Philippines ranked 117th. From 2012 to 2013, Singapore gained three ranks in HDI; the Philippines advanced one rank.

The Philippines also has the highest unemployment rate among the Asean 5 economies. Youth unemployment is also the second most serious in the Philippines.

Among the Asean 5 economies, the Philippines has attracted the least in foreign direct investments (FDI).

“From January to April, 2015, net FDI inflow was $1.234 billion, or 48.3 percent lower than the $2.386 billion recorded in the same period in 2014,” Diokno said.

He added that, during the last five years, agriculture had an anemic growth and construction had an erratic growth.

Diokno said agriculture and construction are the sectors where government should focus intervention in the next 10 years.

Agriculture is necessary for strong, sustained and inclusive growth because about one-third of the labor force are employed in the agriculture sector and it is cheaper to create jobs in agriculture than in banking, business-process outsourcing (BPO), energy and other industries, Diokno said.

He added that modernizing agriculture could translate into cheaper food prices that would benefit 100 million Filipinos, especially the poor, ease the demand for higher wages, and make inputs to food manufacturing cheaper.

“The President should also appoint a competent, decisive, and honest agriculture secretary who should be an agriculture expert rather than a politician. Most high-profile corruption took place in the sector,” he said.

“The government should also be serious in implementing the agrarian-reform program. The lack of clear direction in it has caused a lot of uncertainties,” Diokno said.

The government should also invest in public infrastructure that would enhance agricultural activities, such as irrigation, farm-to-market roads, water systems, and post-harvest facilities, he said. It should also provide public infrastructure in urban centers and in rural areas, nationwide, from Luzon to Mindanao.

“Government investment in infrastructure makes a lot of economic sense. It creates a lot of jobs, directly and indirectly. It facilitates the movement of goods, services and people.

“The reality is that the Philippines has the worst infrastructure among the Asean 5 economies. This is a major disadvantage to us as the Asean bloc embarks on integration this year,” Diokno said.

“As things are, investors would rather go to Singapore, Malaysia and Indonesia than in the Philippines,” he added.

Diokno said Filipinos deserve a break from government. They deserve a better mass-transit system, less traffic, better airports and sea ports.