“And in the last, in the three quarters of 2007 for which we have had our accounting completed, our economy rose 7.1 percent and this is the fastest growth in more than a decade, in a very, very long time.”

Arroyo allies have repeatedly warned that these “economic gains” will go to waste if the present “political crisis” is not stemmed.

The administration’s claims of economic take-off have been criticized by the Asian Development Bank (ADB), which has argued that the country’s growth is hardly sustainable and is “among the most inequitable” in Southeast Asia.

“While growth has picked up in recent years, with the economy in 2007 posting its highest growth of 7.1 percent in the last three decades, both public and private investments remain sluggish and their share in gross domestic product has continued to decline, raising the question of whether the current economic momentum can be sustained,” the ADB stated in a recent study, Philippines: Critical Development Constraints.

The ADB also stated that “in 2003, about 25 percent of Philippine families and 30 percent of the population were deemed poor and, in 2006, the Gini coefficient of per capita income – at slightly over 0.45 – was among the highest in Southeast Asia.” The Gini coefficient is a measure of inequality of income or wealth distribution.

The ADB’s findings on inequality of income distribution are bolstered by data recently released by the National Statistical Coordination Board (NSCB), which show that the number of poor Filipinos increased by 3.8 million from 2003 to 2006. Even with its low poverty threshold of P41.25 for each individual Filipino – which is much lower than the living wage estimates of the National Wages and Productivity Commission (NWPC) – the rise in poverty rates from 2003 to 2006 is visible.

Based on December 2007 data from the NWPC, the national average family living wage for a family of six stands at P670 ($14.52 at last year’s average exchange rate of $1:P46.15) a day.

The highest regional minimum wage at present is P362 ($8.86 at the March 7 exchange rate of $1:P40.85) for the National Capital Region (NCR), which has a regional daily family living wage of P806 ($19.73). The region with the lowest minimum wage rate is the Autonomous Region in Muslim Mindanao (ARMM), with only P200 ($4.90) even as it has a regional daily family living wage of P1,096 ($26.83).

The ADB also argued that the country’s supposed economic gains are continually threatened by corruption and poor governance – which it cited as among the factors that prevent the Philippines from fully taking off.

In 2007, the Philippines was ranked among the most corrupt nations in the world in the corruption watchdog Transparency International’s Corruption Perception Index. The Philippines ranked 131st among the 180 nations studied – with a 2.5 index score together with Burundi, Honduras, Iran, Libya, Nepal, and Yemen.

The index score refers to the level of corruption as perceived by businesspeople and analysts. It ranges between zero, which is highly corrupt; and 10, which is very clean.

Corruption has been one of the main issues against the Arroyo administration. It has been among several other grounds that subjected the President to no less than three consecutive impeachment complaints, as well as calls for her resignation or removal from office.

In a press briefing last week, ADB chief economist Ifzal Ali cited the lack of “political stability” as one among a convergence of factors behind the Philippines’ failure to fully take off economically.

“It could be caused by external shocks, for example, a downturn in the electronics cycle as the Philippines is so dependent on electronic exports,” he said. “It could happen from not addressing some of the macroeconomic instability which leads to lack of confidence in terms of private investors and it could happen as a result of natural disasters. It could be political instability. It could be a whole gamut of factors that are at play.”

Beneficial to economy

But for economist Sonny Africa, research director of the socio-economic think tank IBON Foundation, the present political climate should not raise fears about the economy. He even argued that with the economy in such a state, the “political crisis” may be beneficial to the economy in the long run.

“The President is making a spurious and self-serving argument to discourage Filipinos from taking the necessary action against her corrupt, illegitimate, repressive and poverty-worsening rule,” Africa said in an interview, referring to Arroyo’s remarks in her Feb. 23 radio interview. “The most important issue regarding the political system is that it is corrupt, captured by narrow and self-serving elite interests, and does not serve the people. It is ‘unstable’ because the people want to change it. Indeed such instability should even be welcomed if it means a people struggling to change a political system that oppresses them so. The President and her cohorts on the other hand want a ‘stable’ political system that preserves their hold on power.”

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