Gloria can’t take credit for growth, says Diokno

President Arroyo cannot take full credit for the performance of the country’s economy as was her boast at yesterday’s State of the Nation Address (Sona) because of factors that affect economic growth that is beyond the government’s control, UP School of Economics professor Benjamin Diokno said yesterday.

“The government doesn’t control the weather, which affects agriculture immensely in monsoon Asia. A devastating El Niño or a La Niña could spell a big difference on whether agriculture output would be robust or weak,” he said.

Moreover, President Arroyo in past speeches claimed her policies as being responsible whenever a strong growth is recorded but ascribes low growth to global economic troubles.

Diokno said the glowing economic figures Mrs. Arroyo enumerated in the Sona are in stark contrast with the true conditions of Filipinos.

“Are Filipinos better off or worse off now compared to when Mrs. Arroyo assumed office in 2001?” Diokno asked.

“I think the answer is that Filipinos are worse off. More Filipinos now don’t have decent jobs, are poorer, and are likely to go hungry,” he said.

Her taking full credit for the performance of the economy during her decade-long reign is a strategy that is both risky and inappropriate, Diokno said.

“Risky, since the economy after growing at its peak in 2007 is now heading south, at 3.8 percent gross domestic product (GDP) growth in 2008, and is projected to slow to a zero growth in 2009 and to two percent in 2010,” he said.

He said the economy may have grown at an average of 4.09 percent during her term, compared to former President Joseph Estrada’s performance of 4.7 percent (3.4 percent GDP growth in 1999 and six percent in 2000), and slightly better than former President Fidel Ramos’ average of 3.6 percent from 2003 to 2008 or former President Corazon Aquino’s average of 3.34 percent from 1986 to 1992, but a comparison of economic performance on the basis of GDP numbers as the only criterion is inappropriate for a number of reasons.

Diokno said, for instance, the terms of office of post-Marcos presidents are uneven.

“Arroyo would end up serving for 9.5 years or almost a decade, followed by Aquino (seven years), Ramos (six years), and Estrada (2.5 years),” he said.

He added the national income accounts system was revised twice during Arroyo’s watch, which means the GDP numbers in recent years may not be comparable with those in earlier years.

“Professor Felipe Medalla of the UP School of Economics also has raised several methodological and measurement questions on recent GDP numbers. To date, his questions have yet to be answered by government statisticians,” he said.

Diokno noted that while the rest of the world was on a rapid, sustained growth, the Philippine economy benefited through galloping overseas remittances, stronger exports, and higher foreign direct investments.

“This happened during Arroyo’s watch and she’s been trying to claim credit for it,” he said.

She has nothing to do with the sustained global expansion, Diokno said, adding with the sudden reversal of fortune, when the financial bubble burst, and with the world economy now in a full-blown economic crisis, the Philippine economy has significantly slowed.

“Unfortunately for Arroyo, this also happened during her watch,” he said.

Diokno said the world economic crisis exposed the long-term reforms that any Philippine president should have addressed seriously and which Arroyo failed to do.

“At the very least, a meaningful way of evaluating economic performance is whether a particular administration has met its own targets,” he said.

Using this performance criterion, the economy grew much less than planned levels, except for 2004 and 2007, both election years, Diokno added.

In her first Sona, Mrs. Arroyo spoke about her “vision of winning the war against poverty within the decade.” But after almost nine years, she is fast losing that war.

“Poverty worsened from 2003 to 2006 using official government statistics. And with high inflation and food prices in 2008 and rising joblessness, it is reasonable to expect poverty to worsen in 2009,” he said.

At current expectations of slow recovery, it is highly unlikely that the Millennium Development Goal (MDG) of halving poverty by 2015 will be met, even as neighboring countries (Vietnam, Thailand, and Indonesia) succeed in rapidly reducing poverty, he added.

Mrs. Arroyo promised to create 10 million jobs or about 1.5 million jobs annually from 2004 to 2010. She’s way short of her target.

Worse, the decent jobs in manufacturing continued to disappear while more part-time, less secure jobs were created.

On her first Sona she promised food on every table, but that also did not happen, Diokno said.

“Instead, the Philippines became the world’s number one importer of rice. And almost nine years after that first Sona, hunger incidence has reached its peak at 23.7 percent, according to a recent Social Weather Stations survey,” he said.