IN HIS fourth State of the Nation Address yesterday, President Duterte summarized the accomplishments of his three-year-old administration, renewed his pledge of good government, and concluded by promising a more comfortable life for Filipinos.
Arriving an hour late because of bad weather, Duterte kicked off his 93-minute speech by zeroing in on the problems of corruption and illegal drugs, and raising the consideration of the death penalty in some drug cases.
As he came in and out of his prepared text, there was an awkward moment when he confided in the presence of foreign diplomats the delicate details of how he arrived at the controversial decision to allow Chinese to fish in Philippine waters.
We failed to secure a copy of his address for an advancer, so we fell back on Ibon Foundation whose reports give a reasonable balance to administration socio-economic claims. Ibon is a non-stock, non-profit group serving the people through research and education since 1978. Below are excerpts (edited to fit space) from its reports touching on some SONA topics:
•GROWTH, UNEMPLOYMENT, POVERTY – In its pre-SONA forum, the finance department cited three years of “rapid economic expansion,” “the lowest unemployment in 40 years,” “alleviating poverty,” and the Tax Reform for Acceleration and Inclusion (TRAIN) law “benefiting 99 percent of taxpayers.”
Ibon cited, however, Philippine Statistics Authority data showing that gross domestic product growth has been slowing in the 11 quarters since the start of the Duterte administration from 7.1 percent in the third quarter of 2016 to 5.6 percent in the first quarter of 2019. There was a momentary increase to 7.2 percent in the third quarter of 2017, but growth fell rapidly after that.
Ibon said it is deceitful to claim that the 5.1 percent unemployment rate in April 2019 is the lowest in four decades. The finance department knows that the change in the official definition of unemployment in 2005 drastically cut the reported unemployment rate and number of unemployed which makes the April 2019 figure incomparable with the 25 years of data before 2005.
For comparability, computing according to the original definition of unemployment shows that the real unemployment rate in 2018 is 10.1 percent and the real number of unemployed is 4.6 million. These are worse than the already high 9.0 percent unemployment rate and 4 million unemployed in 2016, as computed according to the original definition. In contrast, official figures for 2018 were a grossly underreported 5.3 percent and 2.3 million, respectively.
High unemployment, Ibon said, is a direct result of how only an annual average of 81,000 new jobs have been created since the start of the Duterte administration, from 41 million employed in 2016 to 41.2 million in 2018. This is the worst job generation in the post-Marcos period, it said.
Poverty statistics, meanwhile, show seemingly fewer poor Filipinos only because of government’s very low poverty threshold. The P69.50 daily per capita poverty threshold and P48.60 subsistence or food threshold in the first semester of 2018 are absurdly low and not conceivably enough to meet decent minimum standards for food, shelter, transportation, health care, and education. This leads to a gross underestimation of the real number of poor Filipinos.
•INFLATION — While June inflation has slowed, the prices of basic food items are still higher than prices at the start of the Duterte administration. The wages and incomes of many Filipinos are unable to keep up with the high prices. Ibon said food prices will continue to rise as long as agriculture is neglected and the country depends more on imports.
The Philippine Statistics Authority reported that nationwide inflation slowed to 2.7 percent in June 2019 from 3.2 percent the previous month. Inflation in the National Capital Region eased to 3.0 percent from 3.4 percent, and inflation in areas outside of NCR fell to 2.6 percent from 3.1 percent.
But Ibon said that this lower inflation is not being felt by the public, that food is still generally more expensive than in the same period last year, and especially compared to July 2016 at the start of the Duterte administration.
The wages and incomes of ordinary Filipinos cannot cope with these higher prices. Ibon estimates that the family living wage needed to meet basic needs is P1,008 for a family of five and P1,210 for a family of six in the NCR as of June 2019. The NCR nominal minimum wage of P537 is not enough.
•RECTO BANK RAMMING — The administration’s downplaying of the hit-and-run by a Chinese vessel of a Philippine fishing boat in Recto Bank near Palawan on June 9 shows how it values Chinese funding more than Philippine sovereign rights.
A Chinese vessel rammed and sank the Filipino fishing boat F/B Gem-Ver and left its 22 crew adrift. In his comment after over a week of silence, Duterte dismissed it as a simple “maritime incident” being played up by “stupid politicians” – the same storyline of China.
Ibon said the administration is most likely influenced by its courting massive aid, loans and investments. It is reportedly seeking as much as US$14.3 billion in official development assistance from China to finance 29 “Build, Build, Build” infrastructure projects costing $16.8 billion.
China ODA has already increased by 24,200 percent under Duterte – from $1.5 million in 2016 to $364.9 million in 2018 – to fund flagship infra projects. Loan agreements with China have become controversial for having onerous terms and compromising Philippine sovereignty. The most expensive project to be funded by China is the Philippine National Railway South Long Haul Project worth $3.3 billion.
Foreign direct investments from China increased from $0.4 million in 2016 to $163.4 million in 2018. The administration also got pledges from Chinese firms of around $12.1 billion during the Belt and Road Forum in April 2019, when President Xi Jinping pledged $148 million in grants to boost the Philippine economy.
The administration is careful not to say or do anything that could jeopardize Chinese aid and investments. It is desperate to stimulate the sluggish economy as GDP growth fell to 5.6 percent in the first quarter of 2019 from 6.5 percent in the same period last year.