* This is my article in BusinessWorld last May 8, 2019.
As the mid-terms election approaches, we see and hear
more “good economic news” coming from the administration. The goal is to dupe
the voters into voting the administration senatorial and congressional
candidates. Numbers below show that the administration is spewing half-truths.
1. Lower inflation. The April 2019 inflation is 3.0%,
dubbed as the “lowest inflation since January 2018” and hence, good news. This
is only half of the story. The other half is that even such “low inflation” is
actually the highest among the more mature economies with updated numbers in
East Asia, both year to date (ytd) 2019 and full year 2018. Dutertenomics
should be ashamed of this (see table 1).
2. Ratings upgrade. S&P’s ratings upgrade for the
Philippines to BBB+ was credited to President Duterte and the leader of the
Dutertenomics team, the DOF. Again, that’s only half of the story. The other
half is that while the Philippines suffered lots of mediocre if not negative outlooks
under the Ramos, Estrada and Arroyo administrations, things reversed to lots of
upgrades under the Aquino administration. Dutertenomics simply inherited the
momentum (see table 2).
3. Sectoral deterioration. Using 2010 (last half-year of
Arroyo and start half-year of Aquino administrations) as reference year, we
compare numbers over the past four years.
a. Business confidence has been declining.
b. Ease of doing business global ranking improved, then
declined.
c. Current account balance as share of GDP has been
deteriorating to high deficit.
d. Public debt has been rising big time in the last two
years.
e. Public debt/GDP ratio declined big time 10% from 2010
to 2016 or just six years, then the ratio has stopped declining under
Dutertenomics.
f. Power prices at the Wholesale Electricity Spot Market
(WESM) declining then increased last two years. TRAIN law’s oil tax hikes
affected prices of oil- and coal-power plants (see table 3).
Dutertenomics’ various tax hikes – oil, LPG, coal, sugary
drinks, tobacco, etc. – is the main culprit why the Philippines has the highest
inflation rate in East Asia. Also a rise in electricity prices, amid souring
business confidence.
Voters should remember these and penalize the
Duterte/Hugpong candidates. Support independents like Serge Osmeña. The
market-oriented reforms for efficiency (MORE) is to reverse the irrationality
of many tax hikes to finance huge current and future over-borrowings by
Dutertenomics especially for China ODA.
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See also:
BWorld 321, IPR and MORE investments, May 03, 2019
BWorld 322, MORE transparency in China deals, May 04, 2019
BWorld 323, MORE smart cities… with sufficient water, May 07, 2019
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