MANILA — The Philippines has started to enter into what is effectively a recession since last year, according to research group IBON Foundation. This is considering not just the steeply dropping growth rates but also the rising joblessness and poverty in the country.
Government officials have argued that the country is not in recession because while growth is slow, it is still positive so the two consecutive quarters of decline or negative growth in real gross domestic product (GDP) conventionally used to indicate recession has not yet happened. But this rule of thumb is particularly inapplicable in the Philippines where growth figures in themselves are a poor indicator of economic development.
GDP growth rates have already drastically fallen from 7.1% in 2007 to 3.8% in 2008 and 0.4% so far in the first quarter of 2009. If at present expected growth has not picked up significantly in the last three quarters of the year, then the country will be facing its worst decline in growth since at least the 1984-1985 period, which preceded the upsurge of protest and the People Power uprising that overthrew the Marcos dictatorship in 1986.
The country’s recent experience shows how economic growth has become increasingly disconnected from the lives and welfare of the majority of Filipinos. For instance GDP growth in 2007 hailed as the fastest in 30 years did not significantly reduce high unemployment or substantially improve incomes.
GDP growth has also supposedly also been steadily rising since the 1.8% growth recorded in 2001 yet joblessness and poverty have still been worsening. Joblessness in the last eight years has remained at record high with 10.7 million Filipinos jobless and underemployed and a real unemployment rate of over 11% in 2008. Even measured by low official poverty threshold, there were 4.7 million poor families or 27.6 million Filipinos poor in 2006 which is an increase of 700,000 families and 3.8 million Filipinos from 2003. IBON’s latest quarterly survey in April 2009 had 7 out of 10 Filipinos rating themselves as poor.
The Philippine economy is grossly distorted and even positive growth rates are accompanied by high and rising unemployment, falling incomes, increasing poverty and deteriorating welfare. All the more will Filipinos suffer from the most likely scenario of severe contraction as they have not benefited from so-called growth in the past. This underscores the need for fundamentally-sound reforms to make the domestic economy vibrant and equitable. (end)
IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.
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When has there been a 7.1% growth rate? I thought highest was 3.4% http://www.tradingeconomics.com/philippines/gdp-growth
Oh really??!!
thank you for the information!!