7.1% growth is not due to Aquinomics, it’s a continuation of GMA’s use of Keynesian Economics

Inquirer editors doing what they do best
It’s beginning to look at lot like Christmas. ‘Tis the season to be jolly. Filipinos are known for being a little too indulgent during the festive season. This could very well be the reason why the Philippine government and the business sector have been trumpeting good news about the economy through various media outlets — to get consumers to open their wallets and spend.

Keeping consumers happy is a good strategy. After all, businesses both big and small need to keep the people constantly satisfied and distracted from reality. When people are joyful, they continue to celebrate and spend; when people spend, businesses are happy. All that spending does help keep the Philippine economy afloat — for now.

The term ‘Aquinomics’ does not go down well.
President Benigno Simeon Aquino also realized the advantage of spending after the economy only grew by 3.2 percent in the third quarter of 2011. The significant drop in growth the previous year compared to the 7.3% growth in 2010 compelled some of the President’s critics and members of the Makati Business Club (MBC) to strongly advise him then not to put on hold public infrastructure projects and, instead, “to pump prime the economy” with government funds. The records show that economist Benjamin Diokno even gave BS Aquino some advice that the President would later use but would never acknowledge:

Earlier in his administration, Aquino had been criticised by economists like Benjamin Diokno former budget secretary Benjamin Dioknofor adopting austerity measures instead of continuing his successor, Gloria Macapagal-Arroyo’s strategy of using stimulus spending to prevent the economy from entering a downturn.

Spending to stimulate the economy: John Maynard Keynes
A year ago, President BS Aquino didn’t realize that putting a hold on the infrastructure projects that were initiated by the previous government would backfire on his own administration. Some people even saw through his so-called “austerity measures” as vindictive and just a ruse to make people believe that he is unlike his predecessor Gloria Arroyo whom the President claims to have “depleted” the national budget through its alleged overspending.

President BS Aquino accused the previous administration of corrupt dealings and vowed to review government projects that were already approved because he believed that public funds were merely redirected to someone else’s pockets. But his accusations were based on hearsay and worse, were counter-productive because not only did they anger the foreign contractors the previous government signed with, BS Aquino’s government simply sat on some of the projects.

This included the cancellation — seemingly out of spite — of GMA’s PhP1.9 billion worth of various flood control projects as well as the P18.7 billion Laguna de Bay dredging project signed during her term. Some say that this resulted in the disastrous flooding that brought many industries — including the vital financial services industry — to a standstill for more than a week in the beginning of August this year. Worst of all, the Belgian company, Baggerwerken Decloedt en Zoon (BDC) who was contracted to do the dredging job filed a lawsuit against the Aquino government for the cancellation of the deal. This is something that media outlets owned and operated by family and friends of the President don’t seem to highlight in any of their networks. His lack of professionalism does put the whole Philippine society in a bad light in the international community.

The lack of activity from the time he was elected did slow the economy in 2011 and forced BS Aquino to do something. He quickly authorized additional government spending to stimulate the economy. His government has reportedly increased spending by 12 percent — “a record this year while seeking more than $17 billion of investment in roads and airports.”

Without admitting he was wrong, BS Aquino took credit for what GMA already started doing — which was to stimulate the economy through infrastructure projects and poverty alleviation programs such as the Conditional Cash Transfer (CCT) – during her term. The former President was even forced to highlight her achievements when the economy went sluggish in 2011 while President BS Aquino continued to blame her for it. In a paper she wrote while under hospital arrest for the charge of electoral sabotage, she outlined her disappointment:

The economy I turned over

Countless studies have shown that rapid increases in average incomes reduce poverty. Policy research, notes economist Stephan Klasen, has shown that “poverty reduction will be fastest in countries where average income growth is highest.”

When I stepped down from the Presidency in June 2010, I was able to turn over to the next Administration a new Philippines with a 7.9 percent growth rate. That growth rate capped 38 quarters of uninterrupted economic growth despite escalating global oil and food prices, two world recessions, Central and West Asian wars, mega-storms and virulent global epidemics. Our country had just weathered with flying colors the worst planet-wide economic downturn since the Great Depression of 1930. As two-thirds of the world’s economies contracted, we were one of the few that managed positive growth.

If you look around you in our cities as you drive by the office towers that have changed the skyline, if you look around you in our provinces as you drive over the roads, bridges and RORO ports where we made massive investments, that is the face of change that occurred during my administration.

By the time I left the Presidency, nearly nine out of 10 Filipinos had access to health insurance, more than 100,000 new classrooms had been built, 9 million jobs had been created.

We built roads and bridges, ports and airports, irrigation and education facilities where they were sorely needed. To millions of the poor, we provided free or subsidized rice, discounted fuel and electricity, or conditional cash transfers and we advanced land reform for farmers and indigenous communities.

No amount of black propaganda can erase the tangible improvements enjoyed by hundreds of thousands of families liberated from want during my decade at the helm of the nation. But these accomplishments have simply been part of the continuum of history. The gains I achieved were built on the efforts of previous leaders. Each successive government must build on the successes and progress of the previous ones: advance the programs that work, leave behind those that don’t

I am confident that I left this nation much stronger than when I came into office. When I stepped down, I called on everyone to unite behind our new leaders. I was optimistic and I was hopeful about our future.

However, the evidence is mounting that my optimism was misplaced. Our growth in the 3rd quarter of 2011 was only 3.2 percent, well below all the forecasts that had already been successively downgraded. The momentum inherited by President Aquino from my administration is slowing down, and despite his initial brief honeymoon period, he has simply not replaced my legacy with new ideas and actions of his own. .

It is such a shame that President BS Aquino and his minions continue to credit only his administration for the latest glowing economic growth statistics or for whatever projects that were finalized or something that he is just continuing but obviously were initiated by the previous administration. His public relations team is hell-bent on painting him as the architect of the country’s perceived good performance compared to its ASEAN neighbors. They even brand it as “Aquinomics”. They think the people are gullible enough not to know that the economic policy he is using is actually based on classic Keyenesian Economics of spending, which GMA used during her term.

And let’s not forget the Overseas Foreign Workers who are the backbone of the country. Without their remittances, which is said to make up “the equivalent of about 10 percent of GDP, surged to a record $1.8 billion in September”, our economy would collapse. Even Senate President Juan Ponce Enrile reportedly credits the OFWs contribution to boosting the economic numbers:

Our biggest export is OFWs. That is export. That’s why I’m against RH. What will improve our economy is the excess population that is used to accepting jobs that others don’t want to handle.

The question now is, how is President BS Aquino going to invite these OFWs back home when the economic growth they are boasting about is mostly fuelled by household spending and by government spending using public funds? Evidently, the economic growth he is trumpeting is not inclusive; meaning, it hardly makes a difference to the poorest members of society. Likewise, it is not sustainable under the circumstances because the population keeps growing. Like what I’ve said before, if the country’s population keeps growing, any economic growth achieved will not mean much for the additional mouths to feed.

Judging by the way Malacañang spokesperson Edwin Lacierda congratulates President BS Aquino’s administration for a job well done, the rest of the country can rest assure that this government will continue to think that they do not have to do much to find a more sustainable solution to the economic and social issues facing the nation. ‘Tis the season to be jolly for them, indeed.

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Post Author: Ilda

In life, things are not always what they seem.

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89 Comments on "7.1% growth is not due to Aquinomics, it’s a continuation of GMA’s use of Keynesian Economics"

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domo
Guest

*readies belt and paddle to spank vincensus ignoramus in his ass until it turns tomato in case he trolls another great article like this again*
If those dumb flips thinks that that highest economic growth is such a great news for them, do they even think that they’e making progress with their sorry state and dysfunctional attitude? If their answer is yes then either they’re living in the lala land or like were hypnotized by Kaa the snake singing “Trust In Me” to be eaten by him.

domo
Guest

Oh and pnoy is once again a retarded credit grabber again like in Portal 2 where Wheatley stole GLADoS’ control on her test chambers with the help (and then betrayed by him) by Chell and then claims that it’s his own.

RF Garcia
Guest

Great article Ilda. Boo Chanco himself a writer on business for Philippine Star says such supposedly “good news” as a 7.1 % GDP in the 3Q may be misleading . It is consumption rather than investment driven and sustainability over the long run is questionable. The legion of the unemployed is still growing and the hordes of the beggars in the streets are ever skyrocketing. Poverty has never been as glaring as it is now. How will that 7.1% GDP growth explain the exodus of our countrymen to work abroad?

T4Man
Guest

Are you sure it’s actually “classic Keynesian economics”? Didn’t Keynes teach that when the business cycle goes into it’s inevitable downturn the government should increase spending proportional to the downturn, then reduce that spending as the economy recovers? What I see is just spend, spend, spend, consume, consume, consume and then try to call that Keynesian economics. Besides that, Keynes was wrong.

Johnny Saint
Guest
Keynes did say “In the long run, we are all dead.” The key here is the Keynesian principle of government control over the economy based on the belief that they (government planners) know best and that they have the most effective infrastructure to manage and stabilize the economy. Decades of experience with Philippine GOCCs and failed strategies to “pump prime the economy” however, only serve to highlight the incompetence of our leaders. The focus should have been on developing a diversified economy founded in solid democratic institutions. That means promoting investment, innovation and entrepreneurship and allowing more competition, not the… Read more »
Surge
Guest
Good morning. I just graduated from a university and I am not really familiar with ever issue in our country. This website is very informative and gives me new perspective in a lot of things. I only wish that there are more people who could read these kinds of articles so their eyes could see the truth behind the acts of our government. Anyway, sorry to digress, this article is written well and provides information or data that could support the main idea. It helps me reflect on WHAT could the government really do and SOLVE a lot of our… Read more »
OnesimusUnbound
Guest

Enrile: “Our biggest export is OFWs. That is export. That’s why I’m against RH. What will improve our economy is the excess population that is used to accepting jobs that others don’t want to handle.”

I have no problem with large population if that population is smart, wise and work ethics. If these population are just “palamunin”, forget it.

T4Man
Guest

“Our biggest export is OFWs. That is export. That’s why I’m against RH. What will improve our economy is the excess population that is used to accepting jobs that others don’t want to handle.”

The ignorance contained in that comment is enough to make me scream out loud. Is he seriously supporting the notion that the Philippines should be a “baby factory” so foreign countries can have maids and janitors?

Trosp
Guest

I have posted this in http://antipinoy.com/pnoys-speech-before-the-filipino-expat-community-in-singapore/

Our GDP Performance 2010 GMA/Penoy Governance

1st Q (Jan to Mar) 7.8% (strong start-under GMA’s watch)
2nd Q (Apr toJun) 8.2% (attributed to election but still under GMA,s watch)
3rd Q (Jul to Sep) 6.3% (strong decline under Penoy’s watch)
4th Q (Oct to Dec) 7.1% (recovering under Penoy’s watch)

trackback

[…] While Homer continues to praise himself and the media continues to worship his economic decisions, Ilda had wrote a very impressive article about that. She pointed out that the 7.1 growth rate is not… […]

RF Garcia
Guest

Why do you say T4Man that Keynes was wrong? President Roosevelt used Keynesian economics to lift the USA from the depths of the depression. He implemented among other projects, the building of thousands of hospitals, schools, playgrounds, airfields, bridges and 1.1 million km of roads. The schools employed thousands of teachers. Can you imagine the huge impact of this on unemployment? From 1933 to 1941 unemployment in America plummeted from 24.9 to 9.9 %. That is using money to generate employment(not a doleout). It is Atty Lacierda’s Aquinomics that is wrong, not Keynesian economics.

BenK
Editor

That is using money to generate temporary employment in government projects, and private-sector employment did not grow at a pace even close to being able to take up the slack, until World War II provided some opportunities.

Nonetheless, even if you disregard the whole economic benefit of war thing, it’s still a lot better idea “Aquinomics”. People should not repeat that word, btw. It’s not even a thing.

T4Man
Guest

I didn’t intend to start an economics debate but since you ask….

I will grant that Roosevelt used Keynesian principles but it’s a continuing erroneous assumption that this lifted the US out of the Great Depression. The depression actually continued on past the end of the war and it wasn’t until government spending was cut back, taxes lowered and entrepreneurs used the built-up infrastructure to create jobs that it ended.
Personally I prefer Murray Rothbard’s theory on the Great Depression but this is now off-topic.

Johnny Saint
Guest
RF, BenK, T4Man, At the very least you will have to agree that FDR’s “New Deal” was necessary to address an economic crisis that was deemed “too huge” at the time for normal market forces to correct. That is — too many people would have suffered before things settled down and the effect this would have had on society was considered unacceptable. Historically, the view among economists is that the Great Depression ended with the advent of World War II. Rearmament in Europe and subsequent troop mobilization helped stimulate the economy and brought unemployment rates down. In the United States,… Read more »
JEREMY BENDER
Guest
The last paragraph goes from Germany to Truman and on to the Philippines. IDK if what is happening here in the Philippines qualifies for a comparison.The de-regulation of the U.S. banking sector,the passing of the banks PRIVATE debts on to the PUBLIC sector,the repeal of Glass-Steigel act,and the assinine ZIRP have bankrupted the economies of the West and if it happens in the Filippines,and ZIRP is already here,the country will certainly go down the drain even further than it already is.It wont happen.Banks in the Fils are the tightest,cheapest,money grubbers I have ever encountered and exposing themselves to any risk… Read more »
T4Man
Guest

This is a common argument for more government intervention, not less. Complaining about the government then asking them to increase regulation and force employers to increase wages is an oxymoron. It is government interference on behalf of the power mongers that stifles the economy and makes the poor poorer and the rich richer.

Johnny Saint
Guest

I think we are becoming too focused on the speculation over who pulls the strings of the president or how much our congressman received in bribes and kickbacks. Lets focus on what can actually be measured and observed. And that is — a deregulated, diversified economy brings in the most profits.

Thomas Jefferson
Guest

More information about the “miracle” economy created by the great leader:

http://www.tribune.net.ph/index.php/commentary/editorial/item/7506-71-growth-in-context

Thomas Jefferson
Guest
Thomas Jefferson
Guest

Industrialization now!

Livelihood programs and projects now!

Jobs generation now!

Direct investments now!

Infrastructure development projects now!

Export development plan now!

Mechanized and scientific farming now!

Strategic/natural resources development now!

Streamlining and re-engineering process, procedure and workflow in all government offices now!

Genuine anti-graft and corruption program now!

LA702
Guest
@ Thomas Jefferson Your 10 point demand is a shout in the wilderness, almost lamenting for something which I think in the eyes of the reality makers and bankers of this world are utopian, that is, if you have an idea how the banking system and government operate. But they can make it happen and make all nations on earth prosperous if they wish to do it. I have enjoyed reading all these “pontifications” and generalizations from these commenters but unless people understand how the banking system and government operates, how and why there are wars, religious conflicts, urban conflicts,… Read more »
Trosp
Guest

LA,

You are all talk.

So explain to us your idea on how the banking system and government operates.

Show us your homework kid. Don’t forget to include to cite your source.

LA702
Guest

@ Trosp & Johnny S

I will not explain how, that is your homework, but here’s one clue that will guide both of you.

Jacob Rothschild: investment banker, estimated family fortune: over $500 Trillion USD…have saved nations from bankruptcy including the US…financed wars around the world…can feed the entire planet for 100 years without hurting his family fortune. Here’s a good start and I would advise both of you to stop reading junks like Tribune, Manila Standard, CNN, ABC etc., they will make you stupid. You know what I mean? LOL!

Johnny Saint
Guest

LA702,

It must be comforting to envelop yourself in conspiracy theory. The beauty is that even with your admonition to other commentators here to do their “homework” conspiracy theories by their very nature cannot be proven. It’s probably what appeals to the people who believe in them in the first place — the idea that they belong to something bigger without having to bear the responsibility for its consequences. And spreading them is just irresponsible and dangerous.

Go get a life and stop looking over your shoulder for something that isn’t there.

Trosp
Guest

LA is a loser.

A Philippine crab.

Johnny Saint
Guest

So — your “homework” is based on popularly repeated Internet conspiracy theories that can never be proven and your arguments consist of name-calling.

Rothschild? Really? You are using the same reasoning Hitler and the Nazis used to justify the murder of 6 million Jews.

So now your true colors come out — another FUCKING DEGENERATE RACIST!

Trosp
Guest

LA,

“I will not explain how, that is your homework, but here’s one clue that will guide both of you.”

Idiot, that is your homework.

You’re the one who is spreading dishonesties here which you didn’t support with facts. Instead, you want us to do the fact searching for you!

Idiot!

In your Rothschild thing, cite the link where you got that moronic claim. Don’t just give us a narration. The link.

Idiot!

Johnny Saint
Guest

Trosp,

He’s citing some old, hoary — and long DEBUNKED — Internet conspiracy theories. The fact that he would specifically point to Rothschild makes me think this idiot is anti-Semitic.

Johnny Saint
Guest

Are the Chinese part of your conspiracy also? Did the Jews pay them to make your life miserable? Perhaps it means the Rothschilds are out to silence you since your brilliant mind discovered their master plan to dominate the world.

LA702
Guest

@ Trosp & Johnny S

What did I tell you people? Stop reading Tribune, Manila Standard or listening to Kris Aquino, you two are thinking just like her. LOL! Now boys…lazy bastards, do your homework asap! LOL!

Johnny Saint
Guest

Why are you so obsessed with the Tribune and the Manila Standard? And why mention the diseased sister of the president? What does she have to do with this? Why do you pigeonhole anyone who has a contrary opinion to your marginalized, delusional, hate mongering diatribe as readers of the Tribune?

Stop inhaling your flatus. It’s corroding your synapses. Making you prone to hallucinations about black helicopters and Rothschilds hacking your files.

Trosp
Guest

LA,

Don’t change the topic.

Cite your link/source!

Is that a hard thing for an idiot like you to do.

LA702
Guest

@ Johnny S

I don’t think a Chinese nuclear bomb can blast your thick skull my friend…Try to figure out…LOL!

DaidoKatsumi
Guest

LA702: Why? That’s because you can’t accept the fact that you are just ‘trolling’?

Go figure.

LA702
Guest

@ Trosp

I told Johnny S that both of you have thick skulls a Chinese nuclear bomb can’t blast. Help yourself old man…LOL!

Johnny Saint
Guest

Is Kris Aquino part of the global Sino-Jewish-miltary-industrial-complex plan to keep LA702 poor?

Trosp
Guest
LA, Where are the sources of the garbage you’re spewing here? I can imagine you’re an overweight person who just rises from a bed late afternoon everyday. Eating breakfast at lunch time while trolling. I’m certain your everyday breakfast is what your mama leaves you before she goes to work. A stale pan de sal and you would even make a coffee for yourself. Typical. Lunch and dinner are taken at the same time. Whatever in the fridge plus the cold stale steamed rice. (A dude like you would not know what is stale and what is not. Just by… Read more »
Trosp
Guest

A Michal Moore of the Philippines, heh…

Hyden Toro
Guest

Figures do not mean anything. You just look around you. Many prople are poor….too few people are rich. Most of them political leaders… Prices of basic commodities are goin higher and higher…

JEREMY BENDER
Guest
The credit for the economic growth in S.E.Asia is due to the ‘outsourcing’ of any job that can be ‘outsourced’ from the hands of a well-paid worker in the West to a low paid worker in S.E.Asia,PERIOD. Who ever wants to take credit for it is just an attention seeker. It is completely laughable to think that without the complete selling out of the people in the West,by their elected representatives and at the hands of the Corporations,that the East,either as a whole or country-by-country, would be propering as it is. There is no way it would be happening. When… Read more »
T4Man
Guest

Going back to Enrile’s outrageous comment: It’s bad enough that Filipino men demonstrate their manliness by continuously impregnating their wives and a mistress or two but now they can claim it’s good for the economy!

On the OFWs: I’m pretty sure most if not all of the OFWs would prefer staying home and finding a job. Rather than celebrating and calling them “heros” people should be P.O.’d about the fact that their family members have to leave them and go overseas (sometimes into volatile areas) just to get a minimal income job.

Thomas Jefferson
Guest
Libertas
Guest

Increasingly a two tier society – the minority who covet americana, and the majority who pay for and pave the road through their serfdom.

analysis shows that the growth rate is neither sustainable or inclusive and no doubt fuelled by ofw’s buying overpriced shoddy rabbit hutches and chinese borrowing at 1% in hong kong and taking over the condo rental market in manila/makati.

enrile as usual shows he is well past his sell by date with his stupidity.
if he knew how to use a computer he could do some research before displaying his ignorance of macroeconomics.

FelYounghusband
Member

‘Yan kasi ‘pag problema minana, ‘pag maganda sa kanya!

Johnny Saint
Guest

According to the Management Association of the Philippines, statistics compiled by the BPO industry show that the 700,000 new BPO job opportunities by 2016 that BS Aquino takes credit for is actually a failure that misses the target requirement by 200,000 (13.33%).

http://business.inquirer.net/82370/more-growth-drivers-of-the-economy

Libertas
Guest
new jobs in the bpo sector will only be created if firstly there are adequate skills and secondly if the industry moves up the value chain and away from low margin call centres. simple extrapolation is pure political propaganda – jam tomorrow, but without a cohesive strategy the new players on the block will take the plum contracts leaving the crumbs to the philippines. additionally companies/customers are not only moving into more automated forms of channel marketing but also startung to differentiate on quality of service as opposed to cost of provision. the next wave of bpo needs and opportunities… Read more »
Johnny Saint
Guest

Correct. There’s also the probable entry of China in the BPO market. Also starting to develop their English speaking skills. And we know for a fact that they can drive the price down.

I’ve always been in favor of diversification of Philippine industries. And promoting entrepreneurship and innovation. This is the proper way to ensure the sustainability of the economy.

sendonggirl
Guest

when it was arroyo’s time grp will give her credit for growth numbers. now its aquino in malacanang, growth is due to “other factors” hehe

Bernie
Guest

Is Ilda and Gloria the same ?

Gogs
Member

I got a better question Bernie. Are you part of the Malacanang Communications Group? How’s the new hardware? Sorry, that was two questions. I’d ask you a third question like how does it feel to cover up for a moron but you won’t be answering that anytime soon. Troll harder.

Johnny Derp
Member

@bernie

Does your ass ever get jealous of all the crap that comes from your mouth? Troll harder moron

Amir Al Bahr
Guest

Are Bernie and moron synonymous?
Does Bernie enjoy talking out of his ass?