The economy is alive, but…

The economy is alive, but… was also published by The Manila Times on 1 February 2023.

The economy comes back to life but leaves the farmers dead.

The Philippine economy grew by 7.6 percent, in terms of Gross Domestic Product (total value of local goods and services) in 2022. After being battered the previous year due largely to the rippling morbid effects of the COVID 19 pandemic, an economy that regains health is refreshing news to everyone.

I quickly add that for the economy to pick itself up from what seemed to be an eternity of mugging, the promise of relief would still mean differently for the rich, the almost rich, those neither rich nor poor (‘sakto lang), the poor, and the wretched poor.

The rich need a vibrant economy so that the portion of their wealth that funds businesses will continue grow.

The poor need those businesses to grow so they can have access to job opportunities by which they are able to get by from survival wages. Their role is to provide back-breaking labor that pads the wealth of capitalists.

The wretched poor need the poor to survive so that the informal labor and services sector will be able to produce scraps and left-over food for their daily meal.

The 7.6 GDP growth rate for last year had the government understandably applauding itself for what it hopes people would acknowledge as a job well done.

The Presidential Communications Office (PCO) said in a press statement last week that “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.”

GDP infographics

Why the applause gets somewhat muted from among the ranks of the poor can be inferred from a breakdown of the elements that contributed to the growth of the GDP.

Government reported that GDP “posted a growth of 7.2 percent in the fourth quarter of 2022, resulting in a 7.6 percent full-year growth in 2022.”

The main contributors to the fourth quarter 2022 growth were wholesale and retail trade; repair of motor vehicles and motorcycles (8.7 percent); financial and insurance activities (9.8 percent); and manufacturing (4.2 percent).

As in previous years, the main contributors to growth last year were industry and services sectors. The industry sector grew by 6.7 percent, services sector by 9.2 percent, and agriculture, forestry, and fishing sector by 0.5 percent.

The industries which contributed the most to the annual growth were wholesale and retail trade; repair of motor vehicles and motorcycles (8.7 percent); Manufacturing, 5.0 percent; and Construction, 12.7 percent.

Financial and insurance services, the playground of the rich, again towed everyone else in the growth sprint. No surprise here—for ages now, they have been leading the main contributors to GDP. Banks and insurers make money regardless of whether people are getting richer or poorer. They press their borrowers or policy holders to pay even in times of distress. In the darkest of days, they can hide in a corner with government securities and come out several folds richer after a period as short as 90 days.

There is also nothing surprising with the bed-ridden agriculture sector. This sector is supposed to provide livelihood for farmers and fisherfolk, the main category of income earners that constitute the poorest segments of the population. When such a large sector (in terms of labor force population) remains sick with hardly any relief in sight, as indicated by its negligible contribution to the economy, one can see how thinly spread the value of the sector’s production is among those who depend on it for a living. For many, there can be no escaping from internal displacement except to flee to urban areas. They end up scavenging scraps and left-over food for survival.

From the margins to center, the cycle of want impacts on many other issues that result from urban migration. The carrying capacities are pushed to the limit as congestion builds up and demand for basic services rises.

For decades the call for government to effectively address the ailing agriculture sector has been loud and clear. Packets of palliatives may have been offloaded here and there, but the needed effect where a large segment of the population can reliably depend on farming for a living has yet to materialize.

The template appears to be importation whenever there is short supply of farm commodities, with the effect of driving their prices up and hurting consumers. In most cases, however, there is no way of knowing whether such shortages are the result of local producers being unable to deliver or unseen forces are at work to manipulate supply and market prices.

Incidentally, eyes have recently turned to the government agency that is tasked with developing and promoting the agriculture sector when scandals over importation of sugar, among other farm commodities, broke out. Then came the astronomical rise in price of onions that hardly benefited local farmers.

So far, the performance of the economy has not mean much to the farmers, the poorest of the poor. That the president himself has chosen to lead this agency does not seem to re-assure them or even the consumers.


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