Sustainable Economic Growth for the Philippines

A recent report reported that the Philippines grew 7.8 percent in the first quarter of 2013, the fastest in Asia. Taken at face value, it was good news indeed. However, careful analysis will reveal that such growth has been achieved before, only to fizzle out for the next few years or so.

The Philippine economic growth has been Asia's least dynamic, in fact, the most sluggish in the last 50 years. For one, China had GDP of 10 percent of higher for more than 30 years straight, India grew at 7 percent or more for than 8 years straight. Closer to its neighborhood, the major economies of Southeast Asia like Thailand, Malaysia, Indonesia and Singapore had GDP levels of more than 7 percent for at least 10 years straight. The Philippines has never grown for higher than 7 percent for even 3 years straight!

The recent GDP numbers for the Philippines is not really surprising, and you need not even be an economist to figure it out. The recent May 13 elections would have been the power behind the surge. In fact, without election related spending, the economy would have barely breached 5%.  Although the aforesaid article mentioned growth levels of the different sectors of the Philippine economy, this does not in any way lend profound insights on the real cause of the stellar numbers (at least for the Philippines) for the first quarter GDP.

Even if it is true, and I really, really want to believe that election related spending was not even a factor (which is already a stretch of the imagination as by tradition and experience, the economy always surges during election time, the growth at best would have been another once in a year phenomenon. Come the second quarter, such feat would most likely not be repeated. Indeed, maintaining a growth level at 7 or higher for at least ten years is like praying for a miracle, this has always eluded the Philippines for the better part of the last 30 years.

A personality based political system, a culture of patronage and corruption, a rote and essentially an American based educational system not adapted, fit and relevant to Philippine conditions and poor infrastructure will ensure that such growth will at best be a spark in dark superstructure. Unless the country can sustain a GDP of at least 7 percent or more for at least 10 years that is inclusive and diversified, the Philippines will remain a wasted potential.

Much has to be done, much has to be changed, and much still seems to be the same repeating again. So again, the first quarter GDP is not much of a surprise - the Philippines has been there, done that - many times before.