Heroes from the farms

Old story, new script.

IN the first half of the year, the country’s gross domestic product (GDP), the value of goods and services produced and traded within the country’s borders, grew by 5.6 percent. The story here is that the Philippine economy remains resilient despite the crippling global prices of crude oil, and has proven capable of staying within the 5-6 percent growth rate band since the last 10 quarters.

The script has slightly changed: from the call centers and telecommunications, the upward push came largely from the farms. That’s encouraging because a farm-based growth is a propeople and propoor growth.

Why propoor? It’s because the farm sector’s high growth rate came from the double-digit growth of palay, corn, banana, fishery and forestry. Producing these stuff are the activities done in the rural areas mostly by poor farmers. Overall, the country’s economic growth remains broad-based, with the industry sector growing 5.1 percent and services 6.1 percent. Exports and the outsourcing industry have contributed significantly. So are the dollars remitted back home by overseas workers.

And how does that growth rate compare with our neighbors in the Pacific? Try this: Indonesia: 5.2 percent; Taiwan, 4.6 percent; Hong Kong, 5.2 percent; South Korea, 5.3 percent; Malaysia (forecast), 5.5 percent; and China, 10.9 percent. Of course, the Philippine economy has proven capable of growing within that range in the last five years. That proves the point that the Philippine economy is no longer “the laggard of Asia.”

To whom are we going to credit this encouraging piece of news? To the farmers, the agribusiness entrepreneurs, and the private sector in general. That’s precisely their accomplishments and not by anyone else. God or nature, of course, provided good climate but it was the farmers who sowed and reaped. So the credit is really theirs. For long, this has been a people’s economy and it seems it will continue this way until the country has produced statesmen who could make things happen for the good of the greater majority. When we could have those statesmen is a big question right now.

The government spin doctors might try their hand at conjuring images showing them responsible for these encouraging numbers. But the national accounts say something else. The government is supposedly expected to put money where its mouth is but in the second quarter, government consumption hardly grew at 0.4 percent and government construction was at 2.1 percent. It means government was not spending enough to push up growth.

Construction in general declined by 2.1 percent and this is because private construction declined by 7.1 percent. This is understandable because the private sector in the construction industry takes its cue from government. It’s nice that Romulo Neri, director-general of the National Economic and Development Authority (Neda), was honest enough to admit this fact and, at Thursday’s press conference on the national accounts, he was crossing his fingers that government agencies could spend more in the next few months to boost the economy further.

What’s preventing the government from spending more money to boost the economy? The government is operating on a reenacted budget which, because of inflation, is necessarily lower than the previous year’s government money. But that’s not even the issue. Government in fact, as Neri admitted, is short of P30 billion in terms of spending performance. Take the National Irrigation Administration as an example. This agency has P20 billion money for irrigation projects alone. It’s almost nine months into the year now and NIA has so far used only P2 billion pesos. It means that the government bureaucracy simply doesn’t have the absorption capacity to handle projects more efficiently. Again, this simply proves the point that the bureaucracy has been more of a hindrance to progress than an agent of growth and development. Should the government really want to get credit for the country’s economic growth, it should start looking within itself.

It will certainly find that a lot of the peaks and valleys in the income accounts may be traced to some policy skew, some inefficient system, or some bureaucrat who’s either very competent or very dull or lazy.

Meanwhile, most people who have been used to carrying the economy on their backs just go their own way regardless of whether government is pushing them up or pullin them down. They’ve been so used to being left to their own devices it really shouldn’t matter so much anymore. And that’s the sad part.

At bottom, true wealth may only be generated when people can look to somewhere, anyone among their leaders, for hope.