The 6-percent expansion of the country’s economy in the second quarter may be on a par with the economic performance of other Asean countries, but this does not automatically translate to higher incomes and more jobs.
Economists, such as University of Asia and the Pacific School of Economics Dean Cid Terosa, issued the statement after the Philippine Statistics Authority released the National Accounts of the Philippines on Thursday.
“I don’t think it means much to ordinary Filipinos. The GDP does not totally translate to income and jobs because it does not account for who gets what,” Terosa told the BusinessMirror.
In terms of alleviating the impact of rising prices on household incomes and consumption, however, Terosa said a high economic growth may help Filipinos cope with inflation.
However, Terosa said, this can only happen if Filipino households are part of sectors that are considered drivers of economic growth. Those that are part of industries that are regarded as growth drivers will see their incomes and productivity increase, making them more resilient to price shocks.
Local economist Calixto V. Chikiamco said enabling the poor to access the benefits of high economic growth means making it more inclusive.
This means growth should translate to better jobs; raise agricultural productivity, where a third of the country’s poor are; and competition to help temper price hikes.
‘Don’t blame farmers’
Raul Q. Montemayor, national business manager and program officer of the Federation of
Free Farmers (FFF), said “it is hard to reconcile the increase in food prices with higher outputs of agriculture products.”
“Proposals to rely more on imports for food supply will discourage local production,” Montemayor told the BusinessMirror. “Relying on imports to curb inflation is a lazy solution and will imperil the long-term prospects of the agriculture sector.”
Montemayor said to ensure food prices are stable and farm-sector growth is sustainable the government should help farmers to “become more efficient and productive.”
“They are placing the burden of inflation arising from TRAIN on the backs of small farmers,” he said.
The FFF official made the statement after Socioeconomic Planning Secretary Ernesto M. Pernia said in a news briefing that he is “gravely concerned” about the “almost stagnant” output of the agriculture sector.
“This supports our premise that the main reason behind the high inflation is the gross deficiency in the domestic production of food, which was not augmented by imported goods, especially rice,” Pernia said.
Belt-tightening
Despite the minimum-wage hikes in several regions, labor groups said on Thursday that workers are now tightening their belts amid the rising of cost of living.
“Even with the increase and their wages, many [workers] are still careful when it comes to spending because of the increase in their expenditure,” Partido Manggagawa Chairman Renato Magtubo told the BusinessMirror an ambush interview after the Senate hearing on contractualization on Thursday.
As of this month, the National Wages and Productivity Commission reported there are currently 10 regions, which have already issued and implemented new wage rates in their respective regions for 2018.
Magtubo noted the wage increase in the said regions maybe only enough to offset the surge in inflation in the second quarter, which already reached 5.7 percent.
Federation of Free Workers Vice President Julius Cainglet agreed with Magtubo and pointed out this should serve a signal for employers to further raise the wages
of workers.
“Employers should give wages that approximate the living wage and not just the minimum wage,” Cainglet said.
“Workers, with their meager wages, have not benefitted or felt this growth, what with the continuous increase in the prices of basic commodities, record inflation and the ill effects of the TRAIN [Tax Reform for Acceleration and Inclusion] law,” he added.
Aside from the spending habits of workers, Magtubo said another factor, which could have contributed to the decline in GDP, is the surge in fuel prices.
“The increase in price of petrol may have raised the price of production of companies discouraging them from producing more,” Magtubo said.
The labor leader expressed concern that some employers may use the drop in the GDP to scrimp on the provision of benefits to labor unions during collective bargaining agreements (CBA).
He said organized labor should be wary of such tactic and continue to insist in using a more historical approach in looking at the finances of the company during a CBA.
“In a CBA, we usually look at the financial statements of company in the last three years, then projection [on the earnings of companies] in the next five years,” Magtubo said.
With a report from Jasper Y. Arcalas and Bernadette D. Nicolas
Image credits: Nonie Reyes