Understanding the BS in being a ‘breakout nation’

In its most recent rah-rah story about how the government of President Benigno Simeon “BS” Aquino III has so far been the heroic beacon of progress as was “promised” during the campaign, “social news network” site Rappler.com has quoted Ruchir Sharma, head of Emerging Market Equities and Global Macro at Morgan Stanley Investment Management who, in his book Breakout Nations: In Pursuit of the Next Economic Miracles, listed the Philippines among several countrues that could “break out”.

The key feature of the Rappler article “PH a breakout nation?” written by Katherine Viconti is in how it implies that the government of President BS Aquino has everything to do with this dubious achievement. Indeed, the original text embedded in the URL of the above article “PH no longer a joke, soon a breakout economy thanks to Aquino” reveals what could’ve been the original title of the article prior to its publication last week.

But what exactly are the assertions that supposedly support the idea that President BS Aquino’s government can be credited for this supposedly imminent “economic miracle”?

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Look no further as the Rappler article, true to form, makes sure we take note of this association in a section within it labelled with the heading “Credit to Aquino”…

Sharma largely credits President Benigno Aquino III with setting the stage for stronger economic growth.

He said that when he visited in early 2010 before Aquino was sworn in, “the Philippines was still the undisputed laggard of Asia, a nation mired in chronic incompetence.”

But the country “is no longer a joke” under Aquino, noted Sharma. In fact, since Aquino assumed office, the country has experienced a series of international credit ratings upgrades, the stock market has become one of the strongest performers in the world, all while inflation has stayed stable and relatively low.

Sharma sees the current economic climate as a major change from the “drift and decay” under former President Gloria Arroyo. Sharma points to the still problem-plagued Manila international airport as a prime example of “how cronyism and ineptitude has retarded economic growth.”

So where exactly in the above blurb is the causal relationship between governance under President BS Aquino and economic “miracles” established? Nowhere.

Indeed, the only link is in the way the improvement of certain cherry-picked indicators had coincided with BS’s assumption of the presidency; specifically here: “since Aquino assumed office, the country has experienced a series of international credit ratings upgrades, the stock market has become one of the strongest performers in the world, all while inflation has stayed stable and relatively low.”

In a society that still believes in kulam this sort of confirmation bias tends to easily thrive. The reality of what it actually takes to live up to this “breakout nation” label arbitrarily slapped by yet another “expert” forecaster is quite categorical…

The Philippines would have to grow 5% or faster to be a breakout, which would mean exceeding the forecasts set by government, multilateral lenders and several financial institutions.

Considering the Philippines’ track record with even just meeting targets, it will be an interesting exercise to sit back and watch what sorts of smarts and resourcefulness the country will be able to muster to live up to this new-found distinction. Specifically, what else besides business process outsourcing and remittances from overseas foreign workers (OFWs) can Filipinos depend on? Failing to convincingly answer that question may prove fatal for this country of 100 million wretched souls.

Norio Usui, senior country economist of the Asian Development Bank (ADB) offers a more realistic take on the Philippines’ future fortunes…

Despite a consistent growth in the country’s gross domestic production (GDP) in the last 30 years, labor productivity has remained low, he said.

Despite an average annual GDP growth of 3.9 percent from 2000 to 2010, poverty incidence in the country increased from 24 percent to 26 percent, according to Neeraj Jain, ADB country director for the Philippines.

Two saving factors of the Philippine economy, said Usui, are remittances from overseas Filipino workers and Business Process Outsourcing (BPO), where Cebu is a major player.

Usui recommended that the country consider running on “two legs” – the BPO services sector and a more traditional sector of manufacturing and industry as a more sustainable combination that would translate to more jobs and alleviate poverty.

The BPO sector is the Philippine’s “star” performer, making the country a global destination, but it can’t remain with voice-based services and has to move up to higher-value services. However, this requires workers with college degrees and skills.

Two sides to a coin, yet people who pretend to be in the business of “journalism” highlight and spin only one side.

For a “news network” that aims to be the face of a reformed and innovative Philippine journalism, it seems Rappler.com practices the same sort of shameful “journalism” that Filipinos have grown so used to. To frame what is really a flawed assertion of a causal relationship between the government of BS Aquino and the elusive economic growth politicians wax poetic in their campaign speeches as something to thank Aquino for can’t be anything but blatant deception.

Perhaps this is the sort of thing that tends to happen when Malacañang is out scrounging around for things to include in President BS Aquino’s State of the Nation Address (SONA).

Ultimately it is still the venerable clan mouthpiece that’s got it right:

Abangan ang susunod na kabanata.

Why get our bullshit from a startup wannabe “social news network” when we can get it from a source that does not pretend to be anything else but what it is.

6 Replies to “Understanding the BS in being a ‘breakout nation’”

  1. People should realize that Standard and Poor’s and other credit rating agencies (CRA’s) for that matter don’t just come up with a credit rating out of some altruistic desire to enlighten the financial world; in truth, they do it for a purpose, for a client (corporate or otherwise) and, of course, for a fee. Yes, chances are it is you, the taxpayer, who is footing the bill for S&P’s financial services especially when it concerns sovereign credit rating; moreover, the rating agency’s track record is not above reproach – it has been likened to a shill in a con game – a very unflattering comparison for a globally respected firm. And, mind you the same holds true for the other CRAs too. It is said that he who pays the piper calls the tune; hence, it is not inconceivable that the government is paying the piper quite generously to come up with a highly favorable, albeit incredible, rating just in time for the SONA III.

    The presidential barkers – read rappler.com, CDQ et al – true to their pavlovian form are quick on their heels to spread the good news, however sanitized, disemboweled and embellished to the max it may be. I say, for their unfailing devotion and unparalleled enthusiasm a pat on the head and big bone to chew on should be in order. But wait, looks like that isn’t enough reward, we should throw in a presidential party for good measure. Party, party, party! Teach me how to dougie! awoooOh!!

  2. Jaks, let me ask you then, who paid S&P to come up with a sovereign credit rating for the Philippines? Was it Ford Philippines, PLDT, Jollibee, or Juan dela Cruz? Take your pick or better yet tell us, if you have any idea, who commissioned S&P.
    Assuming that it is on the level – very unlikely though – then you will have to acknowledge that this came about due in part to the economic policies and measures put in place by the previous administration and not solely by what Pnoy’s administration has done. Or to put it bluntly, Pnoy has very little to do with the present credit rating inasmuch as in economics it is widely accepted that there exists a lag time in between the implementation of a particular policy/measure and the time its effects are felt. Pnoy’s turn at the stand will come at the end of his term, he can’t have it bothways.

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