By JOHN TRIA
A lot has been said about the 2nd quarter growth figures at 5.5%. This shows that growth has continued, albeit at a slower pace. It is not a “failed economy”, as some of the ill informed would have us believe.
Locally, the budget delay in the previous congress definitely was bad for our growth. All because certain congressmen wanted certain privileges that the President vetoed anyway. It only shows how instrumental government spending is to our growth.
Despite this, we cannot ignore that other countries have far lower rates of growth, and that a global growth slowdown is upon us due to that US led “Trade War.”
The Asian Development Bank has cut its growth forecasts and the World Trade organization warns of slower global growth as a result of this and a messy Brexit that creates a lot of uncertainty in markets.
Business decisions to invest may be held back as businesses try to calibrate their moves such as shifting to “neutral countries” such as Vietnam and the Philippines where tariffs will not be imposed.
In Mindanao we have had several inquiries for firms seeking property to establish manufacturing facilities. Whatever benefit we may gain from new investments may take a year to bear fruit. In the meantime, we need to shore up our growth.
Due to these local and global realities, government spending matters
since our growth has always been inequal. The post EDSA years saw erratic growth which was concentrated mainly in Metro Manila and its peripheries. Regions far from Manila were poorer. Spreading the growth makes it more sustainable. Spending and stimulus is therefore needed.
Government needs to step in to provide the infrastructure and connectivity needed to encourage investment and growth in lagging areas and stimulate growth amid a global downturn which can affect investments.
One thing we can pin our hopes upon is a responsive economic team that has done its best to lower inflation to 2.4%, half of the same period last year, which by itself creates stimulus since we can earn and reinvest more.
Having said that, it matters deeply that we all ought to support efforts to boost our economy no matter who sits in Malacanang. Vital reforms that recently passed need to be implemented, and all hands, even of government critics have to be on deck to ensure that these reforms are delivered.
This call is especially strong for Congress, that will need to act quickly on the 4.1 Trillion peso budget already prepared by the executive branch. This is meant to continue boosting the economy. Our representatives should not fail this time.
The Philippine growth story, the same with that of Malaysia and Thailand, progressed across several administrations. A new political maturity will be needed if we indeed want to grow our economy, cut poverty and achieve a better life for all Filipinos.
Good moves by the DA and DOF
New Agriculture Secretary William Dar Finance has hit the ground running on efforts to help rice farmers. He and Finance Secretary Carlos Dominguez recently directed assistance to assist rice farmers adjust to lower paddy prices following the passage of Republic Act (RA) No. 11203 or the rice tariffication law which has caused rice prices to drop.
This includes unconditional cash assistance for farmers, through the Survival and Recovery (SURE) program of the Agricultural Credit Policy Council (ACPC), which both secretaries sit in.
This adds to the programs and projects mandated under the Rice Competitive Enhancement Fund (RCEF), the annual P10-billion fund established under RA 11203 to be sourced from the Bureau of Custom (BOC)’s collection of tariffs on rice imports by private traders following the enactment of this law. So far, about 6 Billion has been collected this year, on top of the 5 billion pre allocated last year.
This is the first time we are seeing direct cash assistance to farmers. Many are confident that this and other stimulus provided by expanded credit schemes under the Land Bank, will now allow the DA to reach its stated goal of progressively higher agriculture production than last year’s lackluster 1+% growth.
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