ibon- nat sit econ[birdtalk] 1101-13

7/27/2019 IBON- Nat Sit Econ[Birdtalk] 1101-13

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Real Change,

or More of the Same?On the national economic situation

IBON Foundation

January 13, 2011



High hopes in 2010

Newadministration

“Landslide” &“overwhelming” mandate, high

satisfaction

Good

government

Public-PrivatePartnerships (PPP)

Conditional Cash

Transfers (CCTs)Transparency &accountability

Pro-human rights, pro-peace



Philippines Real GDP Growth by Administration, 1986-1Q-3Q 2010

7.5

(1.0)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

1 9 8 6

1 9 8 7

1 9 8 8

1 9 8 9

1 9 9 0

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

1 Q

- 3 Q

2 0 1 0

Year

%

Aquino 1:ave. 3.9% Ramos:

ave. 3.8% Estrada:ave. 2.4%

Arroyo:ave. 4.5%

Generally faster growth Aquino 2:~ 7.5%



Growth three ways

3.7

7.8

1Q

(0.5)1.4Comparing each quarter withthe one before it (seasonally-

adjusted)

6.58.2Comparing each quarter in2010 with corresponding

quarter in 2010 (year-on-year)

7.5Comparing first 9 months of

2010 with first 9 months of 2009

3Q2QGDP growth, 2010 (%)



Unemployment Rate, 1956-2010 (%)

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

1 9 5 6

1 9 5 8

1 9 6 0

1 9 6 2

1 9 6 4

1 9 6 6

1 9 6 8

1 9 7 0

1 9 7 2

1 9 7 4

1 9 7 6

1 9 7 8

1 9 8 0

1 9 8 2

1 9 8 4

1 9 8 6

1 9 8 8

1 9 9 0

1 9 9 2

1 9 9 4

1 9 9 6

1 9 9 8

2 0 0 0

2 0 0 2

2 0 0 4

2 0 0 6

2 0 0 8

2 0 1 0

Year

%

Old definitionNew definition

Generally rising unemployment

2010 2010 ::

4.4 million 4.4 million unemployed unemployed

+ +

16.5 million 16.5 million poor quality work poor quality work

(4.2 M unpaid family(4.2 M unpaid familyworkers, 12.3 M ownworkers, 12.3 M ownaccount workers) account workers)

11.2% 11.2% Unemplt Unemplt raterate

( ( ave ave . 2001 . 2001 - - 10) 10)



Unemployment Rate, 1956-2010 (%)

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

1 9 5 6

1 9 5 8

1 9 6 0

1 9 6 2

1 9 6 4

1 9 6 6

1 9 6 8

1 9 7 0

1 9 7 2

1 9 7 4

1 9 7 6

1 9 7 8

1 9 8 0

1 9 8 2

1 9 8 4

1 9 8 6

1 9 8 8

1 9 9 0

1 9 9 2

1 9 9 4

1 9 9 6

1 9 9 8

2 0 0 0

2 0 0 2

2 0 0 4

2 0 0 6

2 0 0 8

2 0 1 0

Year

%

Old definitionNew definition

Still forced abroad

4,4004,400 leavingleavingdailydaily

(1 (1 st st sem sem 2010) 2010)

8.6 million 8.6 million overseas Filipinosoverseas Filipinos

(2009) (2009)



Philippines Real GDP Growth and Unemploymentby Administration, 1986-2010 (% )

(2.0)

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

1 9 8 6

1 9 8 7

1 9 8 8

1 9 8 9

1 9 9 0

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

1 Q - 3 Q

2 0 1 0

Year

%

Real GDP growth

Unemployment rate



Still deep poverty

& inequality

Out of 92 M population – 65 million poor

(70%) ~ PhP104 or less/day

P22,P22,

P35,P35,P45,P45,P55,P55,P67 P67 DailyDaily

income ofincome of poorest poorest

half ofhalf of population population

(2009)(2009)



Combined income

in a year of poorest

11,100,000families

(~55,400,000+ Filipinos)

Net worth of 25

richest Filipinos(US$15.2 billion in 2006)

US$21.4US$21.4

billionbillion (2009)



3 decades of globalization…

•Tariff Reform

Program I (1981)•Tariff ReformProgram II (1991)

•Foreign Investments(1991)

•Build-Operate-Transfer (BOT, 1993)

•Removal of forexcontrols (1993)

•Water transport

(1992)•Telecoms (1993)•Banking (1994)•Shipping (1994)

•Asean Free TradeArea (AFTA, 1992)

•Tariff ReformProgram III (1996)

•National Water CrisisAct (1995)

•Oil IndustryDeregulation Act(1996/98)

•Airlines (1995)

•World TradeOrganization(WTO, 1995)

•Retail trade (2000)•Power/EPIRA (2001)•JPEPA (2008)

•ATIGA (2010)•PPPs + CCTs

•Tariff Reform





•Water transport






•Airlines (1995)


•Retail trade (2000)•Power/EPIRA (2001)•JPEPA (2008)

•Tariff Reform





•Water transport






•Airlines (1995)


•Retail trade (2000)•Power/EPIRA (2001)

•Tariff Reform





•Water transport






•Airlines (1995)


•Tariff Reform





•Water transport



•Tariff Reform

Program I (1981)

201020052000199519901985



Greater trade & investments

14.6%7.4%% of GDP

US$23.6 billionUS$3.3 billionValue

20091990Foreigninvestment

46.1%27.5%% of GDP

US$40.8 billionUS$8.2 billionValue

Ave. 2000-091990Exports



Economic decline



New but old economic thrusts(inc. MTPDP 2011-2016)

1. Unrepentant ‘globalization’: Foreign investment-

& export- driven pseudo- development Greater privatization through Public- Private

Partnerships (PPPs)

Ex. health, education, housing, agri-business,

mining, tourism, BPOs, electronics, infrastructure…

Guarantee investor profits vs. “regulatory risk”

Capital/expertise vs. debt/high prices/lost revenues?

No agrarian reform (note: Hacienda Luisitacompromise)

More free trade agreements (FTAs) – EU- RPFTA, TPPA, US- RP FTA…



Manila Water Tariffs versus Consumer Price Index,

1989-2010-3Q (PhP/cubic meter)

11.14

4.02

29.98

7.21

33.08

0

5

10

15

20

25

30

35

1 9 8 9

1 9 9 0

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1

0 - 3 Q

Year

P h P

0

50

100

150

200

250

C P I

Pre-Privatization All-in-Tariff

Manila Water All-in-Tariff

Maynilad All-in-Tariff

CPI=2000 360% increase

650% increase



2. Poverty- disguising “social protection”,

esp. Conditional Cash Transfers (CCTs) Php21.2 billion CCTs, Kalahi-CIDSS, SEA-K

Expensive, unsustainable, relief withoutreform & cover to justify greater imperialistglobalization

Patronage, corruption & counter-insurgency

Est. US$1 billion in CCT debt service for false

poverty alleviation: WB (US$499.6 M) + ADB(US$508.2 M)




3. Regressive fiscal policy. 2011 budget:

Still prioritizes debt service (P823 Binterest/principal) & high military spending(P105 B)

Low priority for education (w/ SUC budget

cut) (P272 B) & housing (P6 B) Reduced budgets for health (P39 B, large

hospital budget cuts) & agri/agrarian reform(P80 B)

P245 B in lump-sum funds, including variouspork president (P68 B), senator (P300 M),congress (P70 M + P50 M)

Burdens poor with taxes & decrepit socialservices, avoids taxing rich




High hopes in 2011

Struggling againstgovernance for profit…

and for the people



Salamat po

www.ibon.org

IBON Foundation is on Facebook

twitter.com/IbonFoundation



Policy challenges

7 major tasks1. Immediate social & economic relief 2. Avert fiscal crisis in a progressive manner

3. Address jobs crisis of record high unemployment, poorquality work and low earnings

4. Rectify severe inequalities in income, wealth andassets (including of land)

5. Promote real democracy & human rights

6. Curb pervasive corruption including electoral fraud

7. Restore country’s sovereignty in its internationaleconomic and political affairs



Building economic momentum:

Anti-globalization1. Cancel Hacienda Luisita SDO and distribute land to

the farmers; real accounting of land distribution

2. Immediate across-the-board nationwide Php125wage hike

3. Ensure social service budgets of at the very leastP281 B for education, P39 B for health and P13 B forhousing in 2011

4. Repeal RVAT Law; place revenue burden onwealthy/big corporations

5. Repeal automatic debt appropriation law

6. Deliberate national industrial policy

7. Suspend & review JPEPA & EU-RP PCA

8. Convene multi-stakeholder review of ASEAN negotiating strategy and deals

9. Convene multi-stakeholder review to identify localproducts for tariff protection



Building political momentum:

Pro-democracy & peace1. Investigate/prosecute former Pres.

Arroyo/allies for electoral fraud, corruptionand serious human rights violations (HRVs)

2. Investigate/prosecute military & policeofficials for involvement in serious HRVs;transmit 1998 ICC Rome Treaty to Senate forratification

3. Independent probe of May 10 elections

4. Suspend/review Visiting Forces Agreement (VFA) with US and, in meantime, expel USforces

5. Immediately resume formal peace talks withNDFP and MILF

Release all political prisoners as confidence-building and goodwill measure

ibon- nat sit econ[birdtalk] 1101-13

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