Real Change,

or More of the Same?

On the national economic situation
IBON Foundation
January 13, 2011
High hopes in 2010
New
administration
Landslide &
overwhelming
mandate, high
satisfaction
Good
government
Public-Private
Partnerships (PPP)
Conditional Cash
Transfers (CCTs)
Transparency &
accountability
Pro-human rights, pro-peace
Philippines Real GDP Growth by Administration, 1986-1Q-3Q 2010
7.5
(1.0)
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
1
9
8
6
1
9
8
7
1
9
8
8
1
9
8
9
1
9
9
0
1
9
9
1
1
9
9
2
1
9
9
3
1
9
9
4
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
1
Q
-
3
Q

2
0
1
0
Year
%
Aquino 1:
ave. 3.9%
Ramos:
ave. 3.8%
Estrada:
ave. 2.4%
Arroyo:
ave. 4.5%
Generally faster growth
Aquino 2:
~ 7.5%
Growth three ways
3.7
7.8
1Q
(0.5) 1.4
Comparing each quarter with
the one before it (seasonally-
adjusted)
6.5 8.2
Comparing each quarter in
2010 with corresponding
quarter in 2010 (year-on-year)
7.5
Comparing first 9 months of
2010 with first 9 months of 2009
3Q 2Q GDP growth, 2010 (%)
Unemployment Rate, 1956-2010 (%)
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
1
9
5
6
1
9
5
8
1
9
6
0
1
9
6
2
1
9
6
4
1
9
6
6
1
9
6
8
1
9
7
0
1
9
7
2
1
9
7
4
1
9
7
6
1
9
7
8
1
9
8
0
1
9
8
2
1
9
8
4
1
9
8
6
1
9
8
8
1
9
9
0
1
9
9
2
1
9
9
4
1
9
9
6
1
9
9
8
2
0
0
0
2
0
0
2
2
0
0
4
2
0
0
6
2
0
0
8
2
0
1
0
Year
%
Old definition
New definition
Generally rising unemployment
2010 2010: :
4.4 million 4.4 million
unemployed unemployed
+ +
16.5 million 16.5 million
poor quality work poor quality work
(4.2 M unpaid family (4.2 M unpaid family
workers, 12.3 M own workers, 12.3 M own
account workers) account workers)
11.2%
11.2%
Unemplt Unemplt rate rate
( (ave ave. 2001 . 2001- -10) 10)
Unemployment Rate, 1956-2010 (%)
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
1
9
5
6
1
9
5
8
1
9
6
0
1
9
6
2
1
9
6
4
1
9
6
6
1
9
6
8
1
9
7
0
1
9
7
2
1
9
7
4
1
9
7
6
1
9
7
8
1
9
8
0
1
9
8
2
1
9
8
4
1
9
8
6
1
9
8
8
1
9
9
0
1
9
9
2
1
9
9
4
1
9
9
6
1
9
9
8
2
0
0
0
2
0
0
2
2
0
0
4
2
0
0
6
2
0
0
8
2
0
1
0
Year
%
Old definition
New definition
Still forced abroad
4,400 4,400 leaving leaving
daily daily
(1 (1
st st
sem sem 2010) 2010)
8.6 million 8.6 million
overseas Filipinos overseas Filipinos
(2009) (2009)
Philippines Real GDP Growth and Unemployment
by Administration, 1986-2010 (%)
(2.0)
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
1
9
8
6
1
9
8
7
1
9
8
8
1
9
8
9
1
9
9
0
1
9
9
1
1
9
9
2
1
9
9
3
1
9
9
4
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
1
Q
-
3
Q

2
0
1
0
Year
%
Real GDP growth
Unemployment rate
Still deep poverty
& inequality
Out of 92 M population 65 million poor
(70%) ~ PhP104 or less/day
P22, P22,
P35, P35,
P45, P45,
P55, P55,
P67 P67
Daily Daily
income of income of
poorest poorest
half of half of
population population
(2009) (2009)
Combined income
in a year of poorest
11,100,000
families
(~55,400,000+ Filipinos)
Net worth of 25
richest Filipinos
(US$15.2 billion in 2006)
US$21.4
US$21.4
billion billion (2009)
3 decades of globalization
Tariff Reform
Program I (1981)
Tariff Reform
Program II (1991)
Foreign Investments
(1991)
Build-Operate-
Transfer (BOT, 1993)
Removal of forex
controls (1993)
Water transport
(1992)
Telecoms (1993)
Banking (1994)
Shipping (1994)
Asean Free Trade
Area (AFTA, 1992)
Tariff Reform
Program III (1996)
National Water Crisis
Act (1995)
Oil Industry
Deregulation Act
(1996/98)
Airlines (1995)
World Trade
Organization
(WTO, 1995)
Retail trade (2000)
Power/EPIRA (2001)
JPEPA (2008)
ATIGA (2010)
PPPs + CCTs
Tariff Reform
Program I (1981)
Tariff Reform
Program II (1991)
Foreign Investments
(1991)
Build-Operate-
Transfer (BOT, 1993)
Removal of forex
controls (1993)
Water transport
(1992)
Telecoms (1993)
Banking (1994)
Shipping (1994)
Asean Free Trade
Area (AFTA, 1992)
Tariff Reform
Program III (1996)
National Water Crisis
Act (1995)
Oil Industry
Deregulation Act
(1996/98)
Airlines (1995)
World Trade
Organization
(WTO, 1995)
Retail trade (2000)
Power/EPIRA (2001)
JPEPA (2008)
Tariff Reform
Program I (1981)
Tariff Reform
Program II (1991)
Foreign Investments
(1991)
Build-Operate-
Transfer (BOT, 1993)
Removal of forex
controls (1993)
Water transport
(1992)
Telecoms (1993)
Banking (1994)
Shipping (1994)
Asean Free Trade
Area (AFTA, 1992)
Tariff Reform
Program III (1996)
National Water Crisis
Act (1995)
Oil Industry
Deregulation Act
(1996/98)
Airlines (1995)
World Trade
Organization
(WTO, 1995)
Retail trade (2000)
Power/EPIRA (2001)
Tariff Reform
Program I (1981)
Tariff Reform
Program II (1991)
Foreign Investments
(1991)
Build-Operate-
Transfer (BOT, 1993)
Removal of forex
controls (1993)
Water transport
(1992)
Telecoms (1993)
Banking (1994)
Shipping (1994)
Asean Free Trade
Area (AFTA, 1992)
Tariff Reform
Program III (1996)
National Water Crisis
Act (1995)
Oil Industry
Deregulation Act
(1996/98)
Airlines (1995)
World Trade
Organization
(WTO, 1995)
Tariff Reform
Program I (1981)
Tariff Reform
Program II (1991)
Foreign Investments
(1991)
Build-Operate-
Transfer (BOT, 1993)
Removal of forex
controls (1993)
Water transport
(1992)
Telecoms (1993)
Banking (1994)
Shipping (1994)
Asean Free Trade
Area (AFTA, 1992)
Tariff Reform
Program I (1981)
2010 2005 2000 1995 1990 1985
Greater trade & investments
14.6% 7.4%
% of GDP
US$23.6 billion US$3.3 billion
Value
2009 1990
Foreign
investment
46.1% 27.5%
% of GDP
US$40.8 billion US$8.2 billion
Value
Ave. 2000-09 1990
Exports
Economic decline
New but old economic thrusts
(inc. MTPDP 2011-2016)
1. Unrepentant globalization: Foreign investment -
& export - driven pseudo- development
Greater privatization through Public- Private
Partnerships (PPPs)
Ex. health, education, housing, agri-business,
mining, tourism, BPOs, electronics, infrastructure
Guarantee investor profits vs. regulatory risk
Capital/expertise vs. debt/high prices/lost revenues?
No agrarian reform (note: Hacienda Luisita
compromise)
More free trade agreements (FTAs) EU- RP
FTA, TPPA, US- RP FTA
Manila Water Tariffs versus Consumer Price Index,
1989-2010-3Q (PhP/cubic meter)
11.14
4.02
29.98
7.21
33.08
0
5
10
15
20
25
30
35
1
9
8
9
1
9
9
0
1
9
9
1
1
9
9
2
1
9
9
3
1
9
9
4
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
-
3
Q
Year
P
h
P
0
50
100
150
200
250
C
P
I
Pre-Privatization All-in-Tariff
Manila Water All-in-Tariff
Maynilad All-in-Tariff
CPI=2000
360%
increase
650%
increase
2. Poverty- d isguising social protection,
esp. Conditional Cash Transfers (CCTs)
Php21.2 billion CCTs, Kalahi-CIDSS, SEA-K
Expensive, unsustainable, relief without
reform & cover to justify greater imperialist
globalization
Patronage, corruption & counter-insurgency
Est. US$1 billion in CCT debt service for false
poverty alleviation: WB (US$499.6 M) + ADB
(US$508.2 M)
New but old economic thrusts
(inc. MTPDP 2011-2016)
3. Regressive fiscal policy. 2011 budget:
Still prioritizes debt service (P823 B
interest/principal) & high military spending
(P105 B)
Low priority for education (w/ SUC budget
cut) (P272 B) & housing (P6 B)
Reduced budgets for health (P39 B, large
hospital budget cuts) & agri/agrarian reform
(P80 B)
P245 B in lump-sum funds, including various
pork president (P68 B), senator (P300 M),
congress (P70 M + P50 M)
Burdens poor with taxes & decrepit social
services, avoids taxing rich
New but old economic thrusts
(inc. MTPDP 2011-2016)
High hopes in 2011
Struggling against
governance for profit
and for the people
Salamat po
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Policy challenges
7 major tasks
1. Immediate social & economic relief
2. Avert fiscal crisis in a progressive manner
3. Address jobs crisis of record high unemployment, poor
quality work and low earnings
4. Rectify severe inequalities in income, wealth and
assets (including of land)
5. Promote real democracy & human rights
6. Curb pervasive corruption including electoral fraud
7. Restore countrys sovereignty in its international
economic and political affairs
Building economic momentum:
Anti-globalization
1. Cancel Hacienda Luisita SDO and distribute land to
the farmers; real accounting of land distribution
2. Immediate across-the-board nationwide Php125
wage hike
3. Ensure social service budgets of at the very least
P281 B for education, P39 B for health and P13 B for
housing in 2011
4. Repeal RVAT Law; place revenue burden on
wealthy/big corporations
5. Repeal automatic debt appropriation law
6. Deliberate national industrial policy
7. Suspend & review JPEPA & EU-RP PCA
8. Convene multi-stakeholder review of ASEAN
negotiating strategy and deals
9. Convene multi-stakeholder review to identify local
products for tariff protection
Building political momentum:
Pro-democracy & peace
1. Investigate/prosecute former Pres.
Arroyo/allies for electoral fraud, corruption
and serious human rights violations (HRVs)
2. Investigate/prosecute military & police
officials for involvement in serious HRVs;
transmit 1998 ICC Rome Treaty to Senate for
ratification
3. Independent probe of May 10 elections
4. Suspend/review Visiting Forces Agreement
(VFA) with US and, in meantime, expel US
forces
5. Immediately resume formal peace talks with
NDFP and MILF
Release all political prisoners as confidence-
building and goodwill measure