The Economics of Discontent

Statistics reflect continued hardship in the country. If the government fails to make the quality of life better for poor Filipinos, these may end up as quantifiable evidence for civil unrest.

BY DANILO ARAÑA ARAO
Bulatlat.com

Angelo Reyes’ resignation as defense secretary last Aug. 29 overshadowed the government’s euphoria over the 3.2 percent growth in the gross domestic product (GDP) during the second quarter of the year. The ongoing word war between Sen. Panfilo Lacson and the Arroyo administration over the alleged corruption of President Gloria Macapagal-Arroyo’s husband, Mike Arroyo, did not help any to project the so-called strength of the Philippine economy amid ominous times.

Last week, Romulo Virola, secretary general of the National Statistical Coordination Board (NSCB), said “(n)otwithstanding the SARS epidemic, the war in Iraq and the peace and order problem in our country, the Philippine economy remained resilient as it continued to grow, albeit at a slower pace, in the second quarter.”

Compared to same period last year, the local output or GDP grew by 4.5 percent. Coincidentally, the same growth rate was registered in the first quarter of 2003. GDP refers to the total value of goods and services created within a particular country.

Interestingly, economists interviewed by Reuters did not share the government’s euphoria. According to a Reuters report (Aug. 28), “the economy faces stern challenges in coming months amid growing political uncertainty after last month's failed mutiny and allegations of corruption against President Arroyo's husband.”

As there is no clear sign that the political offensive against the administration will stop, the economic crisis is likely to worsen and will become the basis for widening discontent.

Bases of discontent

The traditional opposition camp is expected to intensify its accusations against administration officials as the May 2004 national and local elections are just eight months away. As a result, political tensions are likely to heighten, along with the possibility of yet another uprising.

As the political drama unfolds, the economic instability brought about by adherence to globalization gets sidetracked, to the point where people are already acclimatized to the state of affairs.

For instance, the reported decrease in the number of deployed overseas Filipino workers (OFWs) was largely ignored even if the implications are dire for a government that depends on external sources to overcome the ballooning budget deficit and foreign debt.

Data from the labor department showed that only 577,952 registered Filipino workers were deployed from Jan. 1 to Aug. 20 compared to 608,525 in the same period in 2002.  On the average, the number of Filipino workers sent abroad every day fell from an average of 2,000 in 2002 to only 1,887 this year.

The government claimed that the fear of Severe Acute Respiratory Syndrome (SARS), the Iraq war and a wage cut imposed by the Hong Kong government on its foreign workers in April were the reasons for the reduced deployment of OFWs.

There are currently seven million Filipinos working abroad, and they remit about $8 billion yearly. The government targets one million Filipinos to be deployed overseas this year mainly as a major source for dollar remittances.

The low deployment of OFWs could affect remittances in the long run, however. No less than the Bangko Sentral ng Pilipinas (Central Bank of the Philippines) stressed that in the past, “the increase in OFW remittances reflected in part the increase in the number of Filipinos leaving to work abroad.” 

This is a situation that government cannot afford given the precarious state of, among others, the country’s deficits in the balance of payments (BOP) and budget, as well as the foreign debt.

As of the first quarter of 2003, the BOP deficit stands at $502 million, and it is expected that it will reach $1.13 billion by yearend. The BOP refers to the amount of dollars the country has, computed by deducting the outflow from the inflow of dollars. 

On the other hand, the budget deficit amounted to P210.74 billion in 2002 and is projected at P178 billion to P185 billion by the end of 2003. This simply means that just like in the past, the government’s revenues are not enough to meet the expenditures.

As if these are not enough, the foreign debt is pegged at $53.87 billion as of 2002.

These are just a few indicators to show the ominous signs of the times and the intensification of the social crisis if continued dependence on external sources like OFW remittances remains.

Nitty gritty

As far as wages and cost of living are concerned, poor Filipinos continue to be financially distressed.

The minimum wage in Metro Manila currently amounts to only P280 (or $5.09, based on an exchange rate of P55.02 per US dollar). The prescribed family living wage in the same region, however, is P558 ($10.14) as of June 2003.

The family living wage is the amount of money a family of six needs to fulfill food and non-food requirements, as well as provide for 10 percent savings.

In other regions, the minimum wage ranges from P140 or $2.54 (Autonomous Region in Muslim Mindanao or ARMM) to P237 or $4.31 (Southern Tagalog). The family living wage as of June 2003, on the other hand, ranges from P366 or $6.65 (Eastern Visayas) to P716 or $13.01 (ARMM).

These are glaring statistics of hardship in the country. If the government fails to make the quality of life better for poor Filipinos, these may end up as quantifiable evidence for civil unrest. Bulatlat.com

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