THE political noise over the Priority Development Assistance Fund (PDAF) and the Disbursement Acceleration Program (DAP), which have drowned out consumer confidence in the third quarter of this year, has revealed the link between politics and the economy. According to the results of the Bangko Sentral ng Pilipinas’s (BSP) Third Quarter 2014 Consumer Expectation Survey, consumer confidence received a beating because of four factors, one of which was the political noise generated by pork-barrel issues.
The PDAF and the DAP, which have divided even the Executive and Judicial branches of the government, are issues that were on top of the respondents’ minds, indicating their continued concern about them. This just goes to show that the government needs more than President Aquino’s assurance that the disbursements are in line with his daang matuwid (straight path) campaign. The job of communicating the difference between the PDAF and the DAP has apparently failed, which is a major reason for the inclusion of the political noise they caused in the survey.
Other issues that contributed to the negative sentiment expressed by consumers are easy economic hurdles for the government to overcome: the rising prices of basic commodities; higher household expenses; and concerns about income, employment opportunities and the business environment. All three could be lumped together as part of problems that go with the increase in economic activity. Thus, the outlook for inflation, or the rise in prices, remains high, although this is something that the BSP could tame, which is why interest rates on deposits have gone up a bit.
This bearish sentiment mirrors that of consumers in the euro zone and the United Kingdom, but contrasts sharply with the optimistic outlook in Australia, Indonesia, Japan, Taiwan, South Korea and the United States, according to the survey.
The respondents’ expectations for the last quarter, however, are upbeat, citing additional employment, the improvement in peace and order, and the presence of more investors as reasons. These expectations are not shared by those from the low-income group, who continue to have a pessimistic outlook.
However, the political noise generated by that brazen September 1 robbery and abduction on busy Epifanio de los Santos Avenue in broad daylight by persons who turned out to be policemen, which only came to light because someone snapped a photo of it and posted it on social media, could hold hostage the rosy outlook that most consumers have for the fourth quarter. It could also dampen the enthusiasm that’s usually associated with the Christmas season, 13th-month pay and bonuses.
The BSP survey results show that, consumers want to see even just a slight improvement in peace and order. The fact that they only seek a slight improvement shows that they have grown accustomed to the rising incidence in crime, notwithstanding the lower crime-rate statistics that the Philippine National Police is churning out.
The political noise produced by the audacity of that crime, in which three carloads of armed men blocked the path of one car, abducted a businessman carrying P2 million in cash and withdrew money from the man’s automated-teller-machine card after forcing him to tell them the correct personal identification number, is one that cuts across all sectors, and if the government bungles this case, the bearish sentiment could extend into 2015. And that could turn out to be a nightmare, for it could become much noisier than the issues related to the PDAF and the DAP.
It is sad to say that the trajectory of the economy, which has been on the upswing, could be held hostage by political noise, but this is what is happening right now. And whether people admit it or not, the increase in property-related crimes strikes a very important chord with consumers. We hear of taxi drivers victimizing their passengers, of robbers near schools, of pickpockets inside Light Rail Transit Line 1 and Metro Rail Transit Line 3 coaches; of motorcycle-riding men snatching bags and dragging their hapless owners along with them; and of kidnappings and car thefts.
All these crimes can be solved; all it takes is political will. Perhaps, it is time for the government to tell terrified consumers that it has their interests at heart by ensuring that there is an improvement in peace and order. If not, consumer sentiment will go negative, and this will bring the economy down.