THE Philippine economy hit a historical high of 7.9 percent in the second quarter of 2013, up from 7.7 percent in the first quarter. However, it turned out to be the peak that preceded a slide, from 7 percent in the third quarter and to 6.2 percent in the fourth quarter.
The economy posted a 7.2-percent expansion for the whole of 2013 despite the massive earthquake in Bohol and the destructive Supertyphoon Yolanda (international code name Haiyan) in Eastern Visayas.
It was only the second year in the past 4 years that the country grew by 7 percent or higher. GDP growth was 3.7 percent in 2011 and 6.8 percent in 2012. With the continuing decline in quarterly growth–5.6 percent in the first quarter of 2014, 6.4 percent in the second quarter and 5.3 percent in the third quarter, it is unlikely that the economy will reach even the low end of the government’s growth target of 6.5 to 7.5 percent.
This, in turn, dims the prospects of achieving inclusive growth, which means spreading the benefits of economic gains down to the bottom of the pyramid, simply the poor majority.
Economists estimate that the economy must grow by at least 7 percent continuously for many years in order for its benefits to trickle down the poorest households.
Thus, while the economy continues to expand even amid crises in the global economy, millions are still unable to find jobs, and millions more are underemployed. The absence of the economic trickle-down effect also keeps a fourth of the 100-million population in the poverty trap.
On the other hand, growth—below or above 7 percent—still yields benefits for the rich, such as investors in the stock market, robust industries like real estate, as well as corporate executives.
It’s the normal course of development in a free-market economy like what we have in the Philippines. This year, however, the dynamics of the law of supply and demand, also a basic feature of a free-market economy, will allow a direct flow of benefits to the poor households. They don’t have to wait for a long period of sustained high-growth.
I refer to the continuing decline, which is substantial, of oil prices. Last week, the major players in the domestic oil industry announced a price rollback of at least P1.75 per liter for gasoline and P1.55 per liter for diesel, effective December 14. The total reduction on the prices of gasoline and diesel in 2014, according to the Department of Energy, amounted to P10.74 per liter and P12.13 per liter, respectively.
We all know that gasoline, diesel and other oil products are a major component of almost all industries, and affect both the rich and the poor.
The rich are able to immediately enjoy the benefits of price reduction as they fill the tanks of their limousines and sports utility vehicles, or the vehicle fleets of their factories.
It is time for the poor to share in the benefit pie. I welcome the decision of the Land Transportation Franchising and Regulatory Board (LTFRB) to reduce the minimum jeepney fares in Metro Manila by a peso, or from P8.50 to P7.50, effective December 12. The LTFRB also instructed its regional and provincial offices to reduce fare rates based on the local diesel and gasoline prices in their respective areas.
Other sectors like food manufacturers should follow suit. The government should exert moral suasion to make sure that the positive impact of lower oil prices are shared with the poor.
For many people, inclusive growth and inflation are abstract terms, but prices of food and other goods and services (like transport fare) are the things that most people associate with the economy.
In closing, I wish to invite the public to visit the distinctive Christmas exhibits in some of the projects of Vista Land & Lifescapes Inc. These exhibits should be a happy and memorable bonding experience for students, who are now on vacation, and their families. There are no entrance fees and the exhibits are open to the public.
At the Evia Lifestyle Center in Vista City in Daang Hari, Cavite, a 30-foot high Christmas tree is surrounded by lush landscaping, with a promenade that includes a grand arch, and a beautiful display of lights.
Visitors will also see an assortment of Christmas ornaments spread in the entire lifestyle center. They will feel that they’re transported to The Americana at Brand in Glendale, California from where Vista Land took its inspiration in creating the wonderful showcase.
From the American Christmas scene, take a trip to a “Swiss Alps” winter land, the 100-hectare Crosswinds in Tagaytay, the only pine estate south of Metro Manila with over 20,000 pine trees. The comfortable cold temperature at this time of the year and the scent of pines at Crosswind rival the atmosphere in urbanized Baguio.
The 7-hectare exhibit, dubbed “Christmas Village,” includes Santa Claus’s house, which greets visitors at the gates of Deux Pointe. Visitors can lounge at sidewalk cafes and discover great finds at quaint shops.
Merry Christmas!
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