BUSINESS HEADLINES THIS PAST WEEK...
(Mini Reads followed by Full Reports below)

SWS: FROM 1983 TO 2015 PH POVERTY LEVEL REMAINS THE SAME


MAY 5 ---Urban poor – Homeless families take shelter and go about their daily routine under a bridge in Quezon City (Linus G. Escasndor II)  The number of Filipinos who consider themselves poor remain the same, according to the first quarter Social Weather Stations (SWS) survey. In its new report, the SWS said about 51 percent of Filipinos felt they are poor in the first quarter, unchanged from 52 percent in December survey last year, or equivalent to 11.4 million families. The survey was conducted last March 20-23 among 1,200 respondents, which was first published today by BusinessWorld. Respondents were particularly asked: “Saan po ninyo ilalagay ang inyong pamilya sa kard na ito? (Where would you place your family in this card)?” A show card with the choices “hindi mahirap” (not poor), “sa linya” (on the line), and “mahirap” (poor) is shown. SWS attributed the same survey result to the 12-point decline in poverty rate in Metro Manila (from 43 percent to 31 percent) that was offset by a five-point increase in the Visayas (from 65 percent to 70 percent). Meanwhile, the number of poor households remain almost the same in Mindanao from 60 percent to 62 percent) and the rest of Luzon (from 45 percent to 44 percent). READ MORE...

ALSO: Port congestion continues to affect exports


Socioeconomic Planning Secretary Arsenio M. Balisacan  Merchandise exports may have contracted anew in March as effects of the congestion in Metro Manila ports last year continue to linger, UK-based investment bank Barclays said. However, the bank expects a slight improvement with an estimated 2.4 percent decrease in March from the 3.1 percent contraction in February. “Export contraction to ease as the residual impact of port congestion disruption eases further,” Barclays said in a research note. Official March exports data will be released by the government on Tuesday, May 12. Outbound shipments fell 3.1 percent to $4.513 billion in February from $4.657 billion in the same month last year, Philippine Statistics Authority data showed. The decrease was amid lower exports of woodcrafts and furniture, other mineral products, metal components, electronic equipment and parts, other manufactures, and machinery and transport equipment. Socioeconomic Planning Secretary Arsenio M. Balisacan said last month the decline could be traced to lower demand from the country’s major export markets, Japan and China. READ MORE...

ALSO: More local borrowings push gov’t debt higher to P5.79 T


File photo
The government’s outstanding debt rose 2.8 percent in March as a result of higher borrowings from domestic sources. According to the Bureau of the Treasury, the country’s outstanding debt amounted to P5.79 trillion as of end-March, P160 billion higher than the P5.63 trillion recorded in the same period a year earlier. This also marked an increase of 0.5 percent or P30.59 billion from the end-February figure. Domestic debt stood at P3.85 trillion, accounting for the bigger share of the total debt. The amount was 5.19 percent more than the P3.66 trillion registered the previous year. The government continued to step up domestic borrowings to manage foreign exchange risk and develop the capital market while taking advantage of ample domestic liquidity. Domestic borrowings are conducted primarily through the issuance of government securities such as Treasury bills and bonds. External debt, meanwhile, declined 1.7 percent to P1.93 trillion from P1.97 trillion a year ago. READ MORE...

ALSO: Phl economy remains the ‘exception’ – IMF


STAR/File photo
- The Philippines will continue to be the “exception” in Asia and in the world as its economy is expected to continue its upward growth momentum, the International Monetary Fund (IMF) said. “We see falling potential growth in the world and in Asia in general, but the Philippines is an outlier,” IMF resident representative Shanaka Jayanath Peiris said in a briefing yesterday. Peiris said a big factor is the country’s demographics, as more and more Filipinos join the labor force. Another thing that will drive Philippine potential growth further is the rising investments, he said. IMF’s current estimate of the Philippines’ annual potential growth is at six to 6.5 percent. Peiris said the IMF would update this figure during its Article IV Consultation slated next week. READ MORE...

IMF: Weak exports weigh on Q1 GDP


MAY 8 ---The International Monetary Fund (IMF) estimates first-quarter growth in the Philippine economy gained pace from a year earlier, but slackened from the preceding quarter given weaker exports. In a press briefing on Thursday, IMF Resident Representative Shanaka Jay Peiris said domestic demand fueled by low oil prices likely pushed Philippine gross domestic product (GDP) up in the first quarter of 2015 from 5.6 percent posted in the corresponding period in 2014. “Declining oil prices are generally good. So we think domestic demand was stronger in the first quarter,” Peiris told reporters. However, weaker manufacturing output and exports may have pulled down GDP from a growth rate of 6.9 percent in the last quarter of 2014, he said. “Domestic demand remains strong but the weaker manufacturing and exports story suggests that growth overall is stronger than the first quarter of last year but probably may not be as strong as the fourth quarter of 2014,” Peiris added. Aggregate merchandise exports in the first two months of 2015 dropped 1.8 percent to $8.869 billion from $9.036 billion in the corresponding period of last year. Philippine manufacturing, on the other hand, registered growth of only 3.3 percent in January – its slowest since April 2014 – from 4.4 percent in the same month last year. READ MORE...

ALSO Business commentary: Bottom line
(By Maya Baltazar Herrera -Manila Standard)


MAY 7 (Photo appended by PHNO)---Among the Southeast Asian nations, Singapore is most happy at 24th place, followed by Thailand and Taiwan at 34th and 38th spots, respectively. China placed 84th.The 2015 World Happiness Report ranking the Philippines as 90th among 158 happiest countries From http://unsdsn.org/  The long-awaited match between Manny Pacquiao and Floyd Mayweather was finally held last Sunday, 2 May 2015. The general immediate verdict? Mayweather won the fight but Pacquiao won the audience. In other news this week is research from the Asian Institute of Management Rizalino S. Navarro Policy Center for Competitiveness which points to the persistence of poverty in the country. This follows release of the 2015 World Happiness Report which indicates that the general level of life satisfaction (the WHR measure of happiness) in the country continues to trail significantly below neighboring countries. In the most recent human development report, the Philippines ranked below the average of East Asia and the Pacific, and near neighbors, Thailand and Indonesia, using the human development index. In particular, Philippine life expectancy at birth is 68.7 versus 74.0 for East Asia and the Pacific (74.4 for Thailand and 70.8 for Indonesia). Going by these indicators, the country trails its neighbors in the pursuit of health, wealth, and happiness. READ MORE...

ALSO TIMES EDITORIAL: Growth with job creation


MANILA TIMES EDITORIAL CARTOON: JOBLESS RATE AT ITS LOWEST SINCE 2010 – SWS SURVEY, THAT'S BECAUSE THEY FOUND JOBS ELSE WHERE... April 30, 2015 10:04 pm 
NEWS about the slowest rate of inflation in 20 months has a worrisome angle, because of what it suggests about unemployment. There is an economic concept that shows a historical inverse relationship between inflation and unemployment – the Phillips Curve. Basically, it says that the higher the inflation rate, the lower the unemployment rate. Conversely, the lower the inflation, the higher the joblessness. Earlier, the central bank reported that the inflation rate in April was 2.2 percent. Generally, that is good. Anything below 4 percent is considered zero inflation. Inflation has been consistently low throughout President Aquino’s term thus far – regrettably, though, so has the employment rate. The jobless rate was 7.5 percent in January, the latest figure reported by the Philippine Statistics Authority. That is higher than January 2014, when it was 6.6 percent. Worse, unemployment in the Philippines, according to the International Labor Organization (ILO), is the highest in Southeast Asia. For its part, the Aquino government has a lopsided appreciation of our economic condition, focusing mainly on the GDP growth rate and citing that it is the highest in the region. However, a fast-growing economy with consistently high unemployment suggests that the benefits of economic progress are not evenly distributed. And if the Aquino government is to realize its promise of inclusive growth, then it should refine its economic development programs. READ MORE...


READ FULL MEDIA REPORTS HERE:

SWS: PH poverty level remains unchanged

MANILA, MAY 11, 2015 (MANILA BULLETIN) by Ellalyn De Vera May 5, 2015 (updated) The number of Filipinos who consider themselves poor remain the same, according to the first quarter Social Weather Stations (SWS) survey.

In its new report, the SWS said about 51 percent of Filipinos felt they are poor in the first quarter, unchanged from 52 percent in December survey last year, or equivalent to 11.4 million families.

The survey was conducted last March 20-23 among 1,200 respondents, which was first published today by BusinessWorld.

Respondents were particularly asked: “Saan po ninyo ilalagay ang inyong pamilya sa kard na ito? (Where would you place your family in this card)?” A show card with the choices “hindi mahirap” (not poor), “sa linya” (on the line), and “mahirap” (poor) is shown.

SWS attributed the same survey result to the 12-point decline in poverty rate in Metro Manila (from 43 percent to 31 percent) that was offset by a five-point increase in the Visayas (from 65 percent to 70 percent).

Meanwhile, the number of poor households remain almost the same in Mindanao from 60 percent to 62 percent) and the rest of Luzon (from 45 percent to 44 percent).

READ MORE...
During the same survey period, SWS noted a decrease in the number of Filipino families that claimed they are food-poor at 36 percent, equivalent to 7.9 million families from 41 percent in December, estimated at 9.1 million families.

The question on self-rated food poverty was, “Tungkol naman sa klase ng pagkain ng pamilya ninyo, saan po ninyo ilalagay ang inyong pamilya sa kard na ito (Based on the type of food eaten by your family, where would you place your family in this card)?” A similar show card with the choices “hindi mahirap” (not poor), “sa linya” (on the line), and “mahirap” (poor) is shown to the respondents.

SWS attributed the decline in self-rated food poverty to the nine-point drop in the rest of Luzon (from 37 percent to 28 percent), four-point decline in Metro Manila (from 24 percent to 20 percent), and six-point drop in the Visayas (from 51 percent to 45 percent). It remained the same in Mindanao at 52 percent.


Urban poor – Homeless families take shelter and go about their daily routine under a bridge in Quezon City o (Linus G. Escasndor II)


PHILSTAR

Port congestion continues to affect exports By Kathleen Martin (The Philippine Star) | Updated May 10, 2015 - 12:00am


Socioeconomic Planning Secretary Arsenio M. Balisacan

MANILA, Philippines - Merchandise exports may have contracted anew in March as effects of the congestion in Metro Manila ports last year continue to linger, UK-based investment bank Barclays said.

However, the bank expects a slight improvement with an estimated 2.4 percent decrease in March from the 3.1 percent contraction in February.

“Export contraction to ease as the residual impact of port congestion disruption eases further,” Barclays said in a research note.

Official March exports data will be released by the government on Tuesday, May 12.

Outbound shipments fell 3.1 percent to $4.513 billion in February from $4.657 billion in the same month last year, Philippine Statistics Authority data showed.

The decrease was amid lower exports of woodcrafts and furniture, other mineral products, metal components, electronic equipment and parts, other manufactures, and machinery and transport equipment.

Socioeconomic Planning Secretary Arsenio M. Balisacan said last month the decline could be traced to lower demand from the country’s major export markets, Japan and China.

READ MORE...
During the month, Japan accounted for 20.9 percent of Philippine exports, while the US followed with 16.2 percent. China was the third largest export market in February at 9.9 percent, followed by Hong Kong with 9.4 percent and Singapore with 5.9 percent.

The February figure brought the two-month tally to $8.869 billion, down 1.8 percent from $9.036 billion in the same period last year.

The Philippines saw its outbound shipments increase nine percent to $61.81 billion last year from $56.698 billion in 2013. Electronic exports, which made up more than 40 percent of the shipments last year, went up 8.1 percent to $25.876 billion.

Japan continued to be the main destination of Philippine exports last year, followed by the United States, China, Hong Kong and Singapore.


PHILSTAR

More local borrowings push gov’t debt higher to P5.79 T By Zinnia B. Dela Peña (The Philippine Star) | Updated May 9, 2015 - 12:00am


File photo

MANILA, Philippines - The government’s outstanding debt rose 2.8 percent in March as a result of higher borrowings from domestic sources.

According to the Bureau of the Treasury, the country’s outstanding debt amounted to P5.79 trillion as of end-March, P160 billion higher than the P5.63 trillion recorded in the same period a year earlier. This also marked an increase of 0.5 percent or P30.59 billion from the end-February figure.

Domestic debt stood at P3.85 trillion, accounting for the bigger share of the total debt. The amount was 5.19 percent more than the P3.66 trillion registered the previous year.

The government continued to step up domestic borrowings to manage foreign exchange risk and develop the capital market while taking advantage of ample domestic liquidity.

Domestic borrowings are conducted primarily through the issuance of government securities such as Treasury bills and bonds.

External debt, meanwhile, declined 1.7 percent to P1.93 trillion from P1.97 trillion a year ago.

READ MORE...
Apart from loans extended by multilateral institutions and official aid from foreign governments, the Philippines also borrows overseas through the sale of bonds.

Among the country’s biggest providers of official development assistance are the World Bank, Asian Development Bank and Japan International Cooperation Agency.

Total guaranteed debt amounted to P416 million, down 11.8 percent year on year.

The country’s debt as a proportion of the country’s whole economy declined further last year, reflecting the government’s successful efforts to manage finances and sustain the growth of the economy.

Debt-to-GDP (gross domestic product) ratio improved to 45.4 percent at the end of December 2014 from 49.2 percent the previous year as a result of efficient spending.

The debt-to-GDP ratio, which peaked at 78.1 percent during the 1998 Asian currency crisis, has been on a downward trajectory in the past three years as the government stepped up efforts to manage the country’s debt.


PHILSTAR

Phl economy remains the ‘exception’ – IMF By Kathleen A. Martin (The Philippine Star) | Updated May 8, 2015 - 12:00am


STAR/File photo

MANILA, Philippines - The Philippines will continue to be the “exception” in Asia and in the world as its economy is expected to continue its upward growth momentum, the International Monetary Fund (IMF) said.

“We see falling potential growth in the world and in Asia in general, but the Philippines is an outlier,” IMF resident representative Shanaka Jayanath Peiris said in a briefing yesterday.

Peiris said a big factor is the country’s demographics, as more and more Filipinos join the labor force. Another thing that will drive Philippine potential growth further is the rising investments, he said.

IMF’s current estimate of the Philippines’ annual potential growth is at six to 6.5 percent. Peiris said the IMF would update this figure during its Article IV Consultation slated next week.

READ MORE...
The IMF last month increased its forecast for Philippine economic growth this year to 6.7 percent from an earlier projection of 6.6 percent. The latest estimate is faster than the 6.1 percent expansion recorded last year but still short of the government’s seven- to eight-percent target for 2015.

For next year, the IMF expects economic growth to slow down to 6.3 percent, also below the government’s seven to eight percent target for that period.

The Philippines should remain as Southeast Asia’s growth driver this year until the next, Peiris said, despite a slower first quarter growth versus the fourth quarter of last year.

“Manufacturing and exports are weaker, but domestic demand remains strong. This suggests that growth is overall strong… definitely stronger than first quarter of 2014 but may not be stronger than fourth quarter of 2014,” Peiris said.

Risks to growth this year include the slowdown in activity in Japan and in China, as they are among the biggest trade partners of the Philippines, the IMF official said.

Peiris said the divergence in monetary policies across advanced economies also pose a downside risk to the country and the region in general as they could lead to shifts in interest rates and possibly tighter financial conditions.


MANILA TIMES

IMF: Weak exports weigh on Q1 GDP May 7, 2015 10:16 pm by MAYVELIN U. CARABALLO Reporter

The International Monetary Fund (IMF) estimates first-quarter growth in the Philippine economy gained pace from a year earlier, but slackened from the preceding quarter given weaker exports.

In a press briefing on Thursday, IMF Resident Representative Shanaka Jay Peiris said domestic demand fueled by low oil prices likely pushed Philippine gross domestic product (GDP) up in the first quarter of 2015 from 5.6 percent posted in the corresponding period in 2014.

“Declining oil prices are generally good. So we think domestic demand was stronger in the first quarter,” Peiris told reporters.

However, weaker manufacturing output and exports may have pulled down GDP from a growth rate of 6.9 percent in the last quarter of 2014, he said.

“Domestic demand remains strong but the weaker manufacturing and exports story suggests that growth overall is stronger than the first quarter of last year but probably may not be as strong as the fourth quarter of 2014,” Peiris added.

Aggregate merchandise exports in the first two months of 2015 dropped 1.8 percent to $8.869 billion from $9.036 billion in the corresponding period of last year.

Philippine manufacturing, on the other hand, registered growth of only 3.3 percent in January – its slowest since April 2014 – from 4.4 percent in the same month last year.

READ MORE
In February, factory output grew at a slower pace of 4.4 percent compared with 6 percent growth recorded a year earlier.

‘Full-year growth 6.7%’

For full-year 2015, the IMF expects GDP growth of 6.7 percent “due to lower commodity prices, higher public spending and continued strong private construction and export growth.”

As it stated at the conclusion of its staff mission to the Philippines in March, the IMF remains bullish on the Philippine economy this year but it also urged the government to continue to improve its spending, particularly on infrastructure and human capital.

Despite the rosy projection, the IMF said there were still risks to its baseline outlook from both external and domestic sources.

It said disruptive asset price shifts in financial markets due to asynchronous monetary policies in advanced economies remained a risk, although it noted that the Philippines’ strong fundamentals would provide a cushion.

On the domestic front, preemptive policy moves by the Bangko Sentral ng Pilipinas (BSP) in 2014 have resulted in more moderate liquidity and credit growth, reducing financial stability risks, it said.


MANILA STANDARD

Bottom line By Maya Baltazar Herrera | May. 07, 2015 at 10:55pm


Photo appended by PHNO --Among the Southeast Asian nations, Singapore is most happy at 24th place, followed by Thailand and Taiwan at 34th and 38th spots, respectively. China placed 84th.The 2015 World Happiness Report ranking the Philippines as 90th among 158 happiest countries From http://unsdsn.org/

The long-awaited match between Manny Pacquiao and Floyd Mayweather was finally held last Sunday, 2 May 2015. The general immediate verdict? Mayweather won the fight but Pacquiao won the audience.

In other news this week is research from the Asian Institute of Management Rizalino S. Navarro Policy Center for Competitiveness which points to the persistence of poverty in the country.

This follows release of the 2015 World Happiness Report which indicates that the general level of life satisfaction (the WHR measure of happiness) in the country continues to trail significantly below neighboring countries. In the most recent human development report, the Philippines ranked below the average of East Asia and the Pacific, and near neighbors,

Thailand and Indonesia, using the human development index. In particular, Philippine life expectancy at birth is 68.7 versus 74.0 for East Asia and the Pacific (74.4 for Thailand and 70.8 for Indonesia). Going by these indicators, the country trails its neighbors in the pursuit of health, wealth, and happiness.

READ MORE...
What’s happening here? What’s the real bottom line? And what needs to be done?

Multiplicity

In the hours after the Pacquiao-Mayweather match, pundits commented on the abundance of running and hugging and the relative dearth of boxing. Following a five-year build-up, the actual fight was less than engaging.

As a professional boxer, the goals seem to be simple: win matches, make money. By these measures, Mayweather has been extremely successful. Clearly, however, there are other expectations.

Business is the same. It would be tough to find anyone who will disagree that businesses must make money. However, simply making money is not enough. In fact, many businesses are criticized for focusing too much on profits. The reason for this is that businesses are also expected to behave responsibly. The term often used is corporate citizenship, that expectation that business has a responsibility to society over and beyond paying the correct taxes and abiding by the law of the land.

The popular term triple bottom line refers to the three categories of outcomes businesses are expected to measure themselves by: profit (financial results), people (impact on stakeholders and society in general), and planet (impact on the environment). The expectation is that businesses should not create a negative impact, and, to the extent possible, create a positive impact.

For nations, a growing consensus among policy makers and thought leaders is that nations need to be measured not only against economic progress but also on such matters as social outcomes and the general happiness of citizens. More importantly, policy makers are increasingly being challenged to look beyond the national averages and look to the levels of equity or inequity. Nations now look not only to increasing average well-being but also to preventing misery, chasing not only economic growth but growth that is inclusive.

Inequality

In a piece for Rappler, Ronald Mendoza, executive director of APC, and Katherine Peralta pointed out that, in the 45 years since then Senator Benigno Aquino pointed out the disparity between the top 1 percent of the population and those who lived in poverty, not much has changed.

In 1969, Aquino, then 36, pointed out that 80 percent of households lived in poverty. At that time, 1 percent of families were considered affluent (P25,000 per year) and an even smaller fraction were super affluent, earning more than P100,000 a year (over 6 million in current pesos, with inflation).

Mendoza and Peralta point out that government statisticians calculate that over 14 million families, accounting for 74 percent of families live below threshold income level (P57,000 per annum). About 8 percent of families are classified as food poor.

Mendoza and Peralta point out that inequality, in and of itself, is not necessarily bad. Inequality can be the result of the application of increased effort or creativity. Inequality can inspire individuals to build businesses that benefit many others. The problem arises when there is inequality in the most basic of resources, when there is inequality in opportunity.

To support the claim of inequality in opportunity, Mendoza and Peralta point to health and education disparities between the different regions of the Philippines. They also point to potential for economic inequality stemming from political inequality. They point out that their ongoing monitoring indicates that 8 out of 10 governors in the country belong to dynastic clans. This, of course, is not in and of itself proof of political inequality but is indicative of the ability of certain families to wield long-term influence.

Opportunity and capital

One way to address the concern of addressing those at the bottom of the socio-economic pyramid is to examine the factors that prevent them from fully engaging in economic activity. In a working paper prepared for the AIM RVR Center for Corporate Social Responsibility, we identified the building blocks for inclusive growth: (a) a legal and regulatory environment that provides a legal basis for rights, responsibilities and entitlements; (b) guaranteed basic services; (c) institutionalized safety nets; and (d) access to capacity-building.

The thinking behind these building blocks is that economic participation can occur either from individuals becoming employees or engaging in a profession or from individuals founding businesses. The legal foundation covers both individuals and businesses and includes an affirmation of basic rights, laws against discrimination and appropriate incentives. This, for example, includes a judicious taxation regime.

The next block focuses on individuals. Guaranteed basic services include such things as access to health care, education, safe water and sanitation, housing, and energy. Institutionalized safety nets include social security mechanisms but could also, for example, cover institutionalized safety nets for business bankruptcy.

The last and final building block includes education and training but also covers the wellsprings of enterprise. This includes such things as availability of financing, access to basic resources such as roads and transportation, access to the information highway.

Interestingly, the 2015 WHR points to another critical ingredient: social capital. Social capital, the report points out, is correlated both with happiness as well as with economic development. Stronger social support leads to both wealth and happiness.

A consensus is slowly growing. Not only are the social dimensions important as an outcome, they are also important as a condition. It’s time to pay attention to social capital.


MANILA TIMES EDITORIAL

Growth with job creation May 6, 2015 11:03 pm


MANILA TIMES EDITORIAL CARTOON: JOBLESS RATE AT ITS LOWEST SINCE 2010 – SWS SURVEY, THAT'S BECAUSE THEY FOUND JOBS ELSE WHERE... April 30, 2015 10:04 pm

NEWS about the slowest rate of inflation in 20 months has a worrisome angle, because of what it suggests about unemployment. There is an economic concept that shows a historical inverse relationship between inflation and unemployment – the Phillips Curve. Basically, it says that the higher the inflation rate, the lower the unemployment rate. Conversely, the lower the inflation, the higher the joblessness.

Earlier, the central bank reported that the inflation rate in April was 2.2 percent. Generally, that is good. Anything below 4 percent is considered zero inflation. Inflation has been consistently low throughout President Aquino’s term thus far – regrettably, though, so has the employment rate.


Image appended by PHNO: The Phillips Curve is a relationship between unemployment and inflation discovered by Professor A.W.Phillips. The relationship was based on observations he made of unemployment and changes in wage levels from 1861 to 1957. He found that there appeared to be a trade-off between unemployment and inflation, so that any attempt by governments to reduce unemployment was likely to lead to increased inflation. This relationship was seen by Keynesians as a justification of their policies. Source: bized.co.uk

The jobless rate was 7.5 percent in January, the latest figure reported by the Philippine Statistics Authority. That is higher than January 2014, when it was 6.6 percent. Worse, unemployment in the Philippines, according to the International Labor Organization (ILO), is the highest in Southeast Asia.

For its part, the Aquino government has a lopsided appreciation of our economic condition, focusing mainly on the GDP growth rate and citing that it is the highest in the region. However, a fast-growing economy with consistently high unemployment suggests that the benefits of economic progress are not evenly distributed. And if the Aquino government is to realize its promise of inclusive growth, then it should refine its economic development programs.

READ MORE...
Even though President Aquino is approaching the last year of his term, it is not too late to do something. First, his economic team could ramp up public spending. The Department of Budget and Management (DBM) has not resolved the problem of slow public spending, despite claims it has already done something about it. Government spending is a large component of the aggregate economy. But in recent years, our economy has been led by consumption, which also suggests how remarkable the central bank has been in controlling inflation.

Second, the Aquino government should re-evaluate the Conditional Cash Transfer or CCT. The success of similar programs in other countries suggests that the government should not abandon it. But the CCT’s budget of P62 billion may be poorly targeted, lost to leakages, or both. The mere fact that is has not made a noticeable dent in the poverty rate implies that there is a problem. Policymakers should review it. Also, we have questioned whether dole outs are effective against poverty. It might be better policy to increase spending on programs that immediately create more jobs.

Last, the President should use his remaining political capital to attract more foreign direct investments. To his credit, President Aquino is trying to do that now in his visit to the United States and Canada. He should do more of this.

He should also be mindful about inviting the right kind of investments. If his government is to manage unemployment, the Philippines needs investments in labor-intensive fields. Despite our disadvantages as an investment destination, the country has notable competitive advantages. For instance, Filipinos speak English. Also, the Philippines is a gateway to Asean, a market of about 600 million.

We can track whether President Aquino is on the right path on job creation by monitoring inflation, and of course the unemployment rate itself. He should devote his last year to job creation. It may be unrealistic for him to address all our concerns, but if he can lower joblessness, that would resolve so many problems.


Chief News Editor: Sol Jose Vanzi

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