The Philippines economy "posted the fastest expansion" within the Asean, gloated Socioeconomic Planning Secretary Arsenio Balisacan this week, citing third-quarter growth of 7.1 per cent.
He said that the year-to-date growth was already 6.5 per cent, prompting him to predict that the full-year growth would likely surpass the government's target of 7 to 8 per cent. "Next year we expect this momentum to continue," Balisacan said.
Don't celebrate too prematurely, Mr Secretary. In such a volatile economic climate, nothing remains static and predictable.
In fact, some Philippines' leading business figures have downgraded their government's optimistic forecasts.
"I think we have a very good chance to do 6 per cent this year, and the big bet is we can do another 6 per cent next year," said Bank of the Philippine Islands president Aurelio Montinola III, on Monday. For sustainable growth that benefits all sectors of society, an average 5- to 6-per cent annual growth for the next five or six years would be needed.
As such, questions remain over whether the high growth rate benefited only the middle and upper classes while bypassing the poor.
According to pollsters SWS, net economic optimism was "very high" in seven out of the last 10 surveys. But there's a downside. Asked about the quality of their life over the past 12 months, only 21 per cent of respondents in August said it had improved, while 28 per cent said it had worsened, for a net score of -8 percentage points.
By socioeconomic class, personal optimism decreased in classes ABC (from +34 to +32), class D (from +32 to +28) and class E (from +24 to +20). The Palace declined to comment on why personal optimism had dipped but said this should improve in the coming months, based on the third-quarter growth.
How economic growth translated into poverty reduction is shown in the United Nations Economic and Social Survey on the Philippines delivered in May. To summarise the report:
Economic growth weakened due to declining exports and lower public spending, but in response to weak growth, a disbursement acceleration programme was announced in October 2011. In terms of foreign direct investment (FDI) inflows, the Philippines continued to lag behind other major economies in the subregion, receiving only $1.3 billion in 2011, similar to the 2010 level.
The country faces many challenges, including a high share of non-wage earners and large infrastructure gaps. The share of workers earning wages and salaries, as opposed to the self-employed and unpaid family workers, also remains low. At the same time, income inequalities have led to a slower reduction of poverty and to higher rates of self-rated poverty.
On government intervention in providing social subsidies to ameliorate poverty, Inquirer research shows: As of June 2012, the Conditional Cash Transfer (CCT) programme had reached out to a total of 3.015 million families, surpassing the 2012 target of 3 million.
Between January and February 2012, the programme reported a compliance rate of 95.89 per cent among mothers who visited the healthcare centres for checkups and immunisation for babies; 97.97 per cent among mothers who brought their children to healthcare centres for deworming; 95.15-per cent attendance rate in day care centres among children; and 96.40-per cent attendance rate for primary and secondary schoolchildren.
In May, SWS found that self-rated poverty dropped to an estimated 10.3 million Filipino households, or 51 per cent of the total households in the country. The figure declined from 11.1 million households, or 55 per cent.
The effectiveness of the CCT is under review in a congressional oversight committee, which is looking into whether it is being used as a poverty alleviation measure or as an electoral vote-buying scheme for the 2013 mid-term elections. The programme distributes money to the poorest families in the country.
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Article source: http://www.thethailandlinks.com/2012/12/07/economic-growth-and-growing-inequality-in-the-philippines/
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