Are the Fundamentals of the Economy Strong?

Are the Fundamentals of the Economy Strong?

Economics is purportedly the strong point of Pres. Gloria Macapagal-Arroyo’s administration. She has declared that the country is well on its way of achieving “First World” status in the next one to two decades; and the government issued economic statistics to prove her point. But a deeper analysis of the data provided by IBON Foundation, which was likewise sourced from government, reveals that everything is not well with the economy. In fact, IBON Foundation concluded that the economy is on the brink of another fiscal crisis.

Volume VII, No. 24, July 22-28, 2007

During her State of the Nation Address in 2006, Pres. Gloria Macapagal-Arroyo boasted about the growth in the Gross Domestic Product (GDP) growth, which was 5.5 percent during the first quarter of 2006, and the reduction in the fiscal deficit attributable to the bitter pill we had to swallow, namely the RVAT. She also unveiled a grand plan which consisted of ambitious infrastructure projects for the development of “mega-regions.” Just recently, she cut the ribbon in a newly-constructed port in Subic which is supposedly part of this plan. But there has been no significant visible change or impact yet resulting from this grand plan.

This year, Pres. Arroyo would surely boast of the 6.9 percent GDP growth during the first quarter of 2007 which is the fastest in 17 years, the seven-year high P45.62 exchange rate of the peso to the dollar last June 4, 2007, the all-time high in the stock market index reaching 3,665.23 index hits in June 2007, the 14 percent increase in exports amounting to U$47 billion in 2006, and the 194 percent increase in investments from January to April 2007 compared to the same period last year. She will project that the country will reach “First World” status in two decades.

President Arroyo would surely receive plaudits from her allies in Congress; and cabinet officials would declare that the fundamentals of the economy are strong. After all, economics is supposedly the strong point of Mrs. Arroyo.

On the other hand, the opposition would grudgingly admit that the economy is doing well but would criticize the Macapagal-Arroyo administration for not doing enough so that the gains of the economy would trickle down to the poor. They would also wonder out loud where the government will get the funds for the projects that will again be unveiled by Pres. Arroyo.

I just wish that everything is true. Who doesn’t want a strong economy and the opportunity to achieve “First World” status in the future? Who does not want to hope for a better future?

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