Bu-lat-lat (boo-lat-lat) verb: to search, probe, investigate, inquire; to unearth facts
Volume IV, Number 18 June 6 - 12, 2004 Quezon City, Philippines
Claim of High GDP: Sustained Growth?
people cannot be blamed for not sharing the government’s euphoria over the 6.4
percent growth in the gross domestic product (GDP). After all, they cannot feel
such growth, and a close scrutiny of the figures shows that the latest data on
the local output only reflects the kind of economy the country has.
DANILO ARAÑA ARAO
Gloria Macagal-Arroyo said that the first-quarter 6.4 percent growth in the
country’s gross domestic product (GDP) is the strongest since 2001. Following
this, her own spokesperson, Ignacio Bunye, stressed, “(This) can be attributed
to the robust performance by the agricultural sector and strong domestic
Fishery and Forestry indeed grew 7.7 percent. Palay and corn posted growth rates
of 13.1 percent and 13.4 percent, respectively. Bunye claimed that the
administration “vigorously implements the agriculture and fisheries
modernization program which allocates P20 billion annually for various
infrastructure projects like irrigation, farm-to-market roads and post-harvest
the other hand, personal consumption expenditure (PCE) posted a growth rate of
5.9 percent for the first quarter of the year. Romulo Virola, secretary-general
of the National Statistical Coordination Board (NSCB), admitted that heightened
consumer spending was boosted by election-related activities.
to Virola, “(t)hese were reflected in the marked increases in the expenditures
of food, beverages, clothing and footwear and transportation/communication.
Increased remittances of Overseas Filipino Workers (OFWs), improved farm income,
the Filipinos’ insatiable passion for text messaging and the stable prices of
consumer goods and services also contributed to the vigorous growth of PCE.”
in the latest national income accounts data, however, is the negligible growth
rate of Manufacturing. It grew only 4.3 percent during the first quarter, the
lowest among Industry subsectors. This sector’s performance is significant
since a substantial growth rate theoretically reflects more employment
Mining and Quarrying posted the highest growth rate with 21.0 percent followed
by Construction (6.5 percent) and Electricity, Gas & Water (5.4 percent).
double-digit growth rate of Mining and Quarrying is both speculative and
short-term and cannot be effectively sustained without dire repercussions on the
speculative and short-term nature of growth also applies to Agriculture, Fishery
and Forestry as various external factors like the weather and the El Niño can
spell gloom or doom for this sector at any particular time.
as the administration provided funds for agriculture and fisheries
modernization, the liberalization of agriculture much be taken into account
since the current policy environment does not allow direct subsidies to local
farmers. Under the principles of the General Agreement on Tariffs and Trade
(GATT), direct subsidies constitute unfair trade practice since both local and
foreign industry players must be treated equally.
due to “Pasa Load”?
is interesting to note that among the Services subsectors, Transportation,
Communication and Storage, according to the NSCB, “fortified its growth to 9.3
percent in (the first quarter of) 2004, from 8.6 percent in the same period last
NSCB admitted, “Mobile telephone service providers showed substantial gains in
profits with the introduction and consequently, the popularization of the
low-denomination over-the-air reloading scheme. This innovative offering made
mobile phone services more available and affordable to a larger base of
other words, the domestic economy remains cellphone-driven. The mobile telephone
service providers’ effective marketing of the “pasa load
(pass-a-load)” scheme helped in boosting its profits and gave prepaid
subscribers a more convenient way to reload their cellular phones. Through this,
a person can send a certain amount of load to someone in need.
to this scheme, it may be recalled that mobile telephone service providers
introduced SMS-only prepaid cards at lower prices as an alternative to prepaid
cards which cost from P300 to P1,000 (or $5.37 to $17.90 based on an exchange
rate of P55.88 for every US dollar).
remittances and taxes on cellular phones?
was a marked reduction in net factor income from abroad (NFIA) as it grew by
only 3.4 percent during the first quarter of 2004, compared to 16.7 percent
during the same period last year.
remittances comprise a substantial part of NFIA and these only amounted to $1.2
billion from January to February 2004, roughly the same amount in the first two
months of 2003.
raise much-needed revenues, the administration is planning to impose taxes on
cellular-phone text messaging. A government official who requested anonymity was
quoted as saying that “too much texting,” especially of jokes, made the
activity go beyond being a necessity. “Texting” therefore may be subjected
to excise tax, similar to what is imposed on items like alcohol, cigarette,
luxury vehicles and jewelry.
100 million text messages are sent throughout the country daily. If government
were to collect even just P0.10 ($0.002) for every text message, this would
already translate to government revenues of P10 million daily ($178,954.90) or
P3.6 billion ($64,423,765.21) in one year.
the administration is toying with an idea that will draw flak from various
sectors already reflects its desperation to look for funds.
still biggest contributor
the three sectors, Services accounted for the biggest share of 46.0 percent to
total GDP, followed by Industry (32.5 percent) and Agriculture, Fishery and
Forestry (21.5 percent).
is ironic to think that a supposedly agricultural country depends on Services
for the much-needed boost for the economy, a situation that traditional
economists say only happens to a country that has reached post-industrial
As economists get confused in analyzing the economic model that is the Philippines, the Filipino people wonder why there is so much euphoria about economic growth and continue to try to survive in these trying times. Bulatlat.com