MANILA — The Arroyo administrations hype machine will undoubtedly work overtime to further bombard the public with news of a supposedly strengthening economy, all in the name of securing a win for its senatorial bets. But with the Arroyo governments dismal economic performance, the administration should not use the so-called economic gains as a campaign tool, according to independent think-tank IBON Foundation.
Malacaang has been hyping macroeconomic good news, which consists mainly of a strengthening peso, booming stock market and a seemingly improved fiscal position. But this is completely meaningless to Filipinos and has been good only for foreign creditors, investors, and the administration itself, said IBON research head Sonny Africa.
Africa, a London School of Economics-trained economist, pointed out that the resurgent peso is not an indicator of a strengthening domestic economy. The skyrocketing Philippine Stock Exchange index figures also does not indicate improved investor confidence in the countrys economic prospects but shows the moves of speculators investing in hot money instruments to take advantage of favorable interest rates and make a quick killing.
The improving fiscal situation, meanwhile, is borne on the back of millions of Filipino consumers who had to suffer higher prices of goods and services as a result of the reformed value-added tax (RVAT), as well as drastically reduced public spending on social services. And these were not in the name of long-term gain, but merely to reassure the countrys creditors that the Philippines had the ability to continue servicing its debt, said Africa. As well, the better fiscal numbers allows the country to continue borrowing at more so-called favorable rates.
Africa added that such good news is also likely to be short-lived, as the domestic economy remains weak and excessively vulnerable to global economic disturbances. The underlying fiscal crunch and continuing borrowing moreover warn of problems in the near future. Global credit watchdog Standard & Poors recently said the Philippines would remain one of the regions highest debtors this year, along with Japan, Sri Lanka and India.
The seeming contradiction between government economic propaganda and bleak realities on the ground merely shows different sides of the same coin: a national economy that, under the Arroyo watch, does not serve the needs of the people, Africa said.
IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues
