Increase in Philippine Q1 GDP by 6.9%..
I’ve been reading comments, positive and otherwise to the recently released report by NEDA about the country’s remarkable Q1 GDP increase. Cielito Habito has already questioned its sustainability by associating it with the US and China economies being our major export buyers. Alex Magno is in his usual upbeat mood but somewhat startled at how these figures came about.
It came not as a surprise for me. It’s been more than a year since E-VAT has been implemented which means we have sufficient funds running the economy. Our political scenario is stable despite the recently concluded midterm elections which seemingly did not shake the economy. Our stock market is upbeat and we have a continuous appreciation of the peso.
How are all of these related to the increased GDP? First let us be reminded that GDP is the sum total of the values of goods and services produced in the country.
Economy is business. The more capital is infused into a business, the more it becomes productive by limiting the restrictions to growth. E-VAT has sufficiently raised government’s capital infused, albeit, to non-income generating projects but aqequately improved the business environment. The Nautical Highway has greatly contributed to the movement of goods and services from Mindanao to Luzon allowing these to reach large markets. Ready markets encourage production especially the perishable agricultural products. Looking intently at the sectors that contributed much to the GDP, you wiull find agriculture leading the race. Everywhere you go around the country, you will find sufficient agricultural products sans fish and marine products.
To me, this is the reason for the GDP outgrowing the GNP. The agriculture sector has bounced back especially with the renewed energy and enthusiasm by the Secretary of Agriculture.
Cielito Habito may be right in his predicament but let us not forget that the Philippine domestic market is big. We need not rely solely on exports to have our economy growing. Satisfying the domestic consumption with fresh locally produced agricultural products will curtail importation thereby saving on the needed dollars. It will also provide additional income to our farmers on one side and cheaper products to consumers on the other.
Strengthening the economy is enough protection against the hollow promises and false accusations of the opposition. It’s good that they are elected in the Senate. Their words will be tested against their performance. By then, the people will know who is making a difference in their lives.
