Why the Philippines won’t be the next Asian miracle
The country is no longer the ‘sick man of Asia’, which for decades lagged behind its neighbours, top government officials said, noting that the current administration of President Benigno Aquino is now reaping investment-grade ratings for its anti-corruption campaign.
With economic growth one of the fastest rates in the region, at 7.2 per cent last year, reforms are bearing fruit, said the country’s head of the Tourism Department, Cabinet Secretary Ramon Jimenez.
Touting the Philippines as the next Asian miracle, Jimenez said the government has made significant progress in putting the Philippines back on the radar screen of investors and in restoring people’s faith in the government.
‘We believe it is the next Asian miracle. It started with the restoration of our trust in leadership and is now on full gallop because the people of the Philippines have regained their trust in the future,’ Jimenez said at the opening of the two-day WEF at the posh and glittering Makati Shangri-la Hotel in Manila.
As this was happening, protesters braved truncheon-wielding police officers some kilometres from the hotel, to criticize the government’s hype on what is commonly known as Asia’s Davos (in reference to the annual WEF meetings in Switzerland).
‘Labels such as “Asia’s next miracle” and “Asia’s rising star” are all empty advertisements meant to make the Philippines popular to investors,’ said the non-governmental IBON Foundation, which has added its voice to criticisms on the WEF.
‘The recent growth in the Philippine economy is artificial, narrow, debt-driven and unsustainable. It is accompanied by worsening job generation, growing unemployment and exclusionary growth, mainly in the narrow real-estate and construction sectors. These sectors are supported by record-low interest rates, which have made financing for production and for consumption artificially cheap. While it artificially increases economic activity, this situation of cheap financing is only momentary,’ the group said.
Amid the slow recovery in many developed countries, IBON said foreign corporations are looking at potential markets where they could direct their excess capital in speculative areas and take advantage of opportunities to profit. International credit agencies, foreign transnational firms and local big business groups support the Aquino administration and its neoliberal economic direction, and this explains the positive assessments, credit-rating upgrades, and favourable tags given to the country.
A top Filipino businessman, Manuel V Pangilinan, whose group of companies operates toll roads, telecommunications firms, mining pits and power utilities, said while reforms are laudable, the government still needs to address many critical issues necessary for economic growth.
‘Certainly, the soft spot of development is important – reforms, governance and perception of the Philippines – but there are hard parts of development as well. It can’t be all perception,’ said Pangilinan, who wants the government to cut red tape, reduce the cost of power and build more infrastructure.
And for social entrepreneur Cherrie Atilano, who works with Filipino farmers, the much touted Philippine miracle is not trickling down to the grassroots.
‘We cannot really feel it. It’s so hard to feel how 7.2 per cent is mainstreaming into the grassroots. We need to make sure that once you create wealth you don’t leave people behind,’ Atilano said during Thursday’s WEF opening.
Indeed, when the hype is over, the Shangri-La Hotel goes back to its daily grid, the dignitaries fly back to their home countries and the WEF curtains close at the end of the two-day meeting, real issues of poverty, lack of education, deteriorating public health infrastructure and rampant corruption still need to be addressed.
And for these, the Philippines needs a real miracle.