Economic growth and political stability

Businessmen and entrepreneurs like me look forward to the presidential elections in 2022 because they will bring a new set of leaders who will guide our nation to further progress. The incoming chief executive will bring with him or her a set of political, economic and social agenda that aims to address the nation’s problems.

The new set of leaders will basically face the same challenges that hounded previous administrations—poverty, housing lack, income disparity, peace and order mainly in the South, traffic congestion and unemployment. The current administration did fairly well in finding solutions to these problems but we all know that it will take any government more than six years to address and overcome all these problems.

For starters, entrepreneurs like me want stable economic policies that will not deviate sharply from the current ones. They should promote investments to generate jobs, and ease the rules of doing business instead of discouraging businessmen. Continuity, for me, is key to governance.

The new administration foremost should improve the plight of millions of poor Filipinos. As I’ve espoused in the past, the new chief executive should alleviate the living conditions of millions of Filipinos living below the poverty line. Giving the unfortunate among us the chance to break the poverty cycle is already an accomplishment. We can do this if we find solutions to augment the earnings of farmers and fishermen in the countryside, create employment opportunities for the jobless, and provide housing to the homeless.

An economy will grow stronger if the government implements a massive infrastructure program that generates employment, stabilizes prices and attracts more domestic and foreign investments. These, in turn, create political stability. No nation will be politically stable if the economy is floundering. The population will be restive if many are unemployed and do not have the means to feed their family.

The current administration managed to keep the economy above waters in the face of the Covid-19 crisis. The economy did not collapse despite the closure of many business establishments, although the quarantines and lockdowns took away many jobs. Throughout the pandemic and amid a wave of rating downgrades worldwide, the Philippines kept its investment grade credit ratings.

Our solid macroeconomic fundamentals have saved us despite the prolonged impact of the global health crisis. The inflation and the exchange rates are fairly stable, while the gross international reserves are near the $110-billion mark. A stable banking system, record-low interest rates and a 7.1-percent economic growth in the third quarter all point to a strong recovery next year.

Following the 12-percent gross domestic product expansion in the second quarter this year, the third quarter growth rate of 7.1 percent is among the highest in Southeast Asia.

I have confidence that the Philippine economy will strongly bounce back next year given our success in containing Covid-19 and the increasing vaccination rate. Consumer spending is back after the economic reopening and I expect an increasing trend with the opening of face-to-face classes.

Tourism, meanwhile, will have strong bounce back after the government decided last week to welcome fully-vaccinated tourists from most countries starting this week, or nearly 20 months after the Philippines closed down its borders to stem the virus infection. Foreign tourists are a boon to the economy. Aside from the foreign exchange they spend on our shores, foreign tourists help host communities by creating jobs and providing income to hotel establishments and small business operations, such as restaurants and souvenir shops.

This development is also a welcome relief for our millions of overseas Filipino workers who have been stranded abroad because of the pandemic. These returning OFWs, too, will spur spending in shopping malls and fast-food establishments, and investments in the real estate sector.

An expanding economy with solid macroeconomic fundamentals is the reward for the country’s next president. As I’ve written in this column before, the next president of the Philippines will have a much easier time than what President Rodrigo Duterte is going through right now. But he or she must still buckle down to work to improve the lot of many Filipinos.

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