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7.6% GDP growth a mirage

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THE Presidential Communications Office (PCO) press statement last week read:

“President Ferdinand R. Marcos Jr.’s good economic stewardship resulted in the Philippines posting 7.6 percent full-year growth in 2022, the highest in 46 years since the country recorded 8.8 percent growth in 1976.”

Every single element in the statement is so misleading, even bordering on being fake news, especially the part about “good economic stewardship.”

The 7.6 percent growth rate is a bounce-back mirage, a misleading arithmetic due to the steep decline in our GDP (the sum of goods and services produced) in 2020 due to the Covid-19 pandemic, and its crawling out of that last year.

That 7.6 percent growth refers to the increase in our 2022 GDP (in constant 2018 pesos) of P19.9 trillion from P18.5 trillion in 2021. This 2021 figure is small due to the fact that GDP in 2020 was only P17.5 trillion, the result of a steep 9.5 percent contraction from the P19.5 trillion GDP in 2019, because of the Covid-19 pandemic that ground the economy to a halt as companies’ staff were ordered to stay home at least for year (see table).


A rough analogy: during the pandemic your income was reduced from P100,000 in 2019 to just P50,000 in 2020 because of the lockdowns. When businesses opened in 2021, your revenues returned to its pre-pandemic level of P100,000. But you don’t boast that your income grew by a phenomenal 50 percent, much less brag that it was because of your great skill.

The 2022 GDP growth which the Palace communications office bragged was the “highest GDP growth in 46 years” means a P19.9 trillion GDP — which was approximately the GDP in 2019. We’re just back to our 2019 status. The “growth” is a mirage, we just got back to the pre-pandemic level (see table).



The elder President Ferdinand E. Marcos would have rolled in his grave had he read that PCO statement that the 2022 GDP growth rate was “the highest since 1976,” and due to the current President’s “good economic stewardship.”

The 1976 GDP was the highest rate throughout the elder Marcos’ martial law years, but it was not at all a bounce-back rate as it was in 2022, as every year from 1972 to 1976, the GDP posted respectable growth rates, averaging 6.4 percent.

That high growth rate in 1996 was due to the father’s “good economic stewardship,” his many programs right after the imposition of martial law, facilitated by a one-man-rule without a Congress making trouble every step of the way.

Among these were martial law itself which resulted in remarkable peace-and-order stability that attracted investors; the setting up of export-processing zones that attracted the first high-tech firms into the country; the no-appeal firing of over 3,000 government officials suspected of graft; the building of what would now be the South and Northern Luzon expressways; making the Manila the site of the IMF-World Bank annual meeting in 1974 which in that era was the equivalent of “Davos”; the setting up of diplomatic relations with China in 1975; and the breaking of the back of the Muslim and communist insurgencies, marked by the capture of Jose Ma. Sison and his top military commander “Kumander Dante” in 1976.

Exactly what

I hope the PCO can inform us what exactly has been Marcos Jr.’s “economic stewardship” that it claims made the 7.6 percent possible in the remarkable six months that he was in office.

His seven trips abroad which still has yielded zero investments? The disastrous lack of a leader of the Department of Agriculture that is responsible for the embarrassing sugar, onion and even egg shortage, which pushed the inflation rate beyond what monetary tightening to contain? His failure to appoint full-time secretaries to head the Agriculture, Health and even Defense departments (Carlito Galvez Jr.’s official designation is officer in charge). The intervention of a high Palace official that countermanded an order of the Environment and Natural Resources department to close illegal mining operations of a Chinese company? The fall in confidence over his decision-making process because of rumors that his wife has a big say in the appointment of key Palace officials, and as the President himself recently revealed, gives him advice on legal issues?

Right people

Choosing the right people based on instinct or based on a rigorous process to run your organization is one of the required qualities of any leader. Marcos rates badly in this department, that he had to let go of key officials in a few months, among them his executive secretary who had run his electoral campaign, Marcos’ late uncle’s long-time secretary who headed the Presidential Management Staff, and a long-retired academic to head a dagger-and-cloak agency?

We have to remember that we had an economy that severely contracted in 1984 and 1985, which was a major handicap for us. It took us five years to recover from that, which is a major factor for our underdevelopment.

The contraction of the economy in 2020, is just the second time such a catastrophe happened.

In contrast, most of the rich or soon-to-be-rich countries in Asia not only had no such severe recessions. They had double-digit GDP growth rates in certain years, e.g., China’s in 1978, from 1983 to 1985, and from 2003 to 2007. Thailand’s in 1974, and then from 1988 to 1999. Malaysia’s in three non-consecutive years.

We never had years of double-digit GDP growth; instead we had severe economic recessions at rates that neared 10 percent. Yet this government is ecstatic over a 7.6 percent growth that was merely a bounce-back rate.

If Marcos’ governance doesn’t drastically improve starting this year, that 7.6 percent growth last year will be a dead-cat bounce.

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