The truth about the Philippine Economy

BULL MARKET, BULL SHEET By Wilson Lee Flores
The Philippine STAR 11/07/2005
You shall know the truth, and the truth shall make you free. John 8:32
Leaders and members of various chambers are predicting that President Gloria Macapagal Arroyo, who is scheduled to hold a luncheon meeting at Hotel Intercontinental today, will use the occasion to discuss her governments economic accomplishments. The government has recently been trumpeting its "successes" such as the increase in foreign exchange remittances of overseas Filipino workers, the rise of foreign investments, the strengthening of the Philippine peso, low inflation rate, stable financial system, gains in the war against unemployment and mass poverty, and other indicators.
First of all, I wish to clarify that I do not sympathize with or am connected to anyone in the political opposition, despite my often being critical of the present administrations shortcomings. Second, as an entrepreneur, I am now expanding my businesses because I am confident of the long-term growth prospects of the local economy despite present and other short-term economic problems. Third, I wish to reiterate that whatever her political problems, as long as GMA remains in power as the duly elected President, I want her to succeed in reforming and strengthening the economy.
How can small or medium-sized entrepreneurs plan the future of our businesses if theyre bombarded by inaccurate economic data and scenarios being dished out by GMAs propagandists? Our economy is now in bad shape, but in no way hopeless. Awaken the whole nation to a state of national emergency and urgency, so that all of us will buckle down to work and make the Philippines globally competitive.
Here are some inaccurate economic garbage claimed by government propagandists, and whats real:
On claims that the Philippine economy is in good shape and we are winning the war on mass poverty.
This is inaccurate, for why then are the international lenders charging the highest interest premiums of three to four percent higher than market rates on Philippine bonds? Ask the ordinary man and woman on the street: are they better off economically in recent years? Have homelessness, hunger and urban poverty eased or actually worsened?
"The Philippine financial system is healthy."
The Philippine financial system is OK, but it is unhealthy because of violations of ethics, and lack of transparency and good governance, which go shockingly unpunished. How many big-time economic saboteurs have ever been prosecuted, tried, jailed and punished like those big financial fraud cases in the US, Hong Kong, Taiwan, South Korea, and even China which punished top officials of Bank of China a few years ago? Which banks have inaccurate liquidity datas that need to be corrected immediately? Even the hard-earned lifetime savings of middle-class and poor families in pre-need firms are mismanaged or mishandled by financial bigwigs. But has government punished anyone or enforced stiff sanctions to correct these anomalies that threaten the health of the Philippine financial system?
Higher foreign exchange remittances by OFWs as part of government achievements by certain propagandists.
The higher OFW remittances have nothing to do with better government performance. In fact, the heartbreaking exodus of a million Filipinos every year is not only a serious brain drain because it involves the poor as well as the elite, intellectuals and middle-class families this massive exodus is a shameful vote of no confidence on decades of bad government.
Low inflation as a government feat
Low inflation levels are not proof of a better Philippine economy, or of more efficient production of goods and services, but are actually caused by the insidious scourge of rampant and unabated smuggling nationwide. The government has failed to crush the powerful smuggling syndicates which have already destroyed the poultry, garments, piggery, textile and other local industries with the flood of cheaper smuggled goods. How many local factories have closed shop in recent years? Are we going to remain importers and consumers, instead of being producers and exporters? Who are the political and military godfathers and untouchable smugglers destroying legitimate entrepreneurs and manufacturers?
The increase of many new jobs and ease in unemployment
Business chambers officials have admitted that government has adjusted the basis of its statistical computations several times. What then is the truth about the countrys unemployment numbers? How many people nationwide are unemployed and under-employed? We need to know the extent of the problem so we can make the appropriate corrective measures.
Record increase in foreign investments
Why have several foreign businessmen told that the Philippines received only two percent of the total foreign direct investments in the Asean region? If there are increases this year, its because we have come from an extremely low base last year. The Philippines, however, is attracting a small amount of foreign investments. We should not pat our own backs or fool ourselves. We need to work harder to win back foreign investors to revitalize our economy.
Taxes and bank interest rates are OK.
Several multinational executives complained that the Philippines has among highest tax rates in almost every category in the Asean region. Our bank interest rates are so high or almost double than that of other Asian countries to support real business expansions. They also complain of high electric power costs.
The Philippine economy is in bad shape, but it is not hopeless. There are still a few courageous entrepreneurs who have unshakable faith in the long-term future and the country has so much untapped natural economic advantages.
Tell us the truth and reform the Philippine economy. Without the truth, the people and our rotten politicians will be deluded into complacency. Without the truth, which hurts and shames us, we cannot make the difficult and painful but necessary social, economic, political and other sweeping reforms to save the Philippines from decay and ennui. Without the truth, the Philippines shall forever be trapped in systemic corruption, mediocrity, the "puwede na yan" attitude and other inefficiencies.
I urge GMA to bite the bullet. Tell the whole nation the woeful, unvarnished and bitter truth about our economy, and lead us towards real not cosmetic reforms.