Makati City, Philippines.
Inclusivity is a big word for 2020 which is the opposite of exclusivity. Inclusive growth has always been highlighted by many economists every year when economic projections are being made. This year inclusive growth must again be highlighted; because what is the purpose of progress if only a few will benefit? If we want to achieve the ultimate economic development, we must be reminded that we are one as a nation and that no one must be left behind – we are in one ship.
Last year highlights: 2019 Gross Domestic Product (GDP) hit 5.90%, according to experts Q1 and Q2 GDP growth could have reached more than 6% level if the national budget was released earlier; on one side, 5% GDP level is still a significant growth for the economy; it is still a good indication that we have a vibrant economy in totality (but some experts remain skeptical about the distribution of growth).
Average 2019 inflation drop to 2.5% from 5.13% in 2018; the significant decline in the inflation rate can be attributed to the elastic reaction of the public to price increase and the efforts of the government to curb inflation thru the use of government and monetary policies. While price increase of the market basket has slow down, inflation is still inflation, since 2018 the public has felt that prices have gone up, efforts must be made not only to slow down price increases but also to lower prices by increasing the supply of basic life-sustaining goods and by increasing the efforts against price manipulation (such as hoarding of supply). The basic logic behind curbing prices is that, if you cannot increase the income of the people then you must lower the price of goods so you can give the public more purchasing power; the government must do this if it wants to maintain the stability and order in the society.
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Technology has proven to be a benefit for the mass. Ridesharing apps have helped promote transportation efficiency in the metro. Online stores have provided goods, mostly made in China, at a lower price. The cheap labor and surplus (or excess) goods of China have enabled us to gain access to some conveniences of life at a lower price. With the help of technology, businesses from China are directly selling products to Filipino consumers, slashing the cost of middle man and storage facility.
While imported consumer products and electronics have remained cheap, domestic products which are usually basic goods have seen a price hike. I think this is where we have to be careful, if the price of basic goods continues to increase, these might hurt the public. We have to make sure that the fundamentals are intact. It’s like asking: what is the use of your new imported shoes, phones, and gadgets if you can’t afford to buy food, drink water, pay electricity, rent a house, and access transportation?
While smart-phone ownership and access to technology has been a symbol of equality; almost all Filipino have mobile phone and access to internet data, there are still things here that are difficult to obtain. Acquiring a private car and owning a house is expensive (especially in the metro). Putting your feet in the shoes of the common people, convenient ride-sharing transportation (Grab) is still seen to be expensive compared to jeepney transportation, and the price of renting a decent house (with at least two bedrooms and a safe location) is also high. In this regard, development in public transportation must be sought, through the development of mass transportation such as trains (MRT, LRT, PNR, Subway), which can be a convenient alternative to expensive transportation; access to low-cost decent housing must be further developed as well.
Inline to ease traffic in Metro Manila, some projects are already seeing the light. Between April and June this year, SkyWay Stage 3 project will be open, which is seen to shorten the travel time from Makati to Quezon City (and vice versa) to 20 minutes which usually takes 2 hours because of traffic. According to government authorities, before 2020 ends, NLEX North Harbour Link is seen to operate, which is projected to reduce 70% of trucks passing the main roads of Metro Manila. By 2021, the NLEX-SLEX connector will operate which will connect NLEX North Harbour Link and Skyway Stage 3.
There are also new train line projects expected to operate between 2021 and 2025:
*LRT-1 Cavite Extension
*New PNR Trains
*PNR Station from Tutuban Manila to Malolos Bulacan
*MRT-4 from Quezon City to Tatay Rizal
*The first Metro Manila Subway (biggest railroad project in the Philippines)
Efforts were made last year to push further the modernization of jeepney transportation, which is seen to bring safety and comfort to daily commuters of the metropolis; but some operators are hesitant; individual owners who see the transformation as additional own pocket expense. The modernization attempt is not yet complete, but the goal is to finish it this year. To give way to those who cannot modernize their jeeps by July 2020, authorities have decided not to automatically phased out non-modernize jeeps as long as they passed the Motor Vehicle Inspection System (MVIS). Since the start of the Public Utility Vehicle Modernization Program (PUVMP) in 2017, 2,595 units have been modernized and put into operation out of 220,000 jeepney units operating in the country; equivalent to 1.18% of total jeepneys in the Philippines (based on November 2019 data).
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Tourism is a big part of the Philippines economic growth which comprises 12.7% of GDP or equivalent PHP 2.2 trillion (based on 2018 government data). From January to August 2019, international tourist arrival hit 5.55 million, 14.08% higher compared to the same period in 2018. Efforts to enhance tourism were made last year, such as Boracay rehabilitation. On the development side, there are still a lot of untapped destinations in the Philippines that are waiting to be discovered; and, there are many amusement developments in other countries that can still be adopted here. But more than anything else, the relaxing white beaches in the countryside, the natural geography of different provinces, and hospitality of the Filipinos continue to be the main reason why tourists choose to return.
The recent Taal volcano eruption that caused hundreds of thousands of people to flee their town (in 14km danger zone) has also caused serious damage not only in agriculture but also in the tourism business. According to government officials, 90% of tourism establishments in Tagaytay (a town near Taal volcano) have been affected by the ash fall; the town alone attracts 5.5 million (local and international) tourist visitors, on average, each year.
The spread of coronavirus, which is reported to kill 80 people out 2,744 confirmed cases in mainland China (as of this writing, Jan 27, 2020), can negatively affect tourism. Based on the data, China is the second-largest source of foreign tourism in the Philippines (following South Korea). In the first quarter of 2019, Chinese tourist arrival hit 463,804; 24.87% higher compared same period in 2018.
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With all the significant events happening to our country and to other parts of the globe, it is unusual not to worry about the future of our economy. But be reminded that these events (like the Taal eruption and coronavirus) are small parts of economic activity; there are still huge parts in our daily economic life that are seeing progress (like the PHP 4.1 trillion budget of the Philippine government, which is, if utilized properly could spore development). This year, Philippine Economist maintains an optimistic projection for the Philippines' economic growth; Philippine Economist projects a 6.3% GDP growth for the Philippines economy in the year 2020.
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