Brace yourselves! Ateneo’s Cielito Habito says PH’s economic boom may be over soon
The days of prosperity, which the Philippines enjoyed in the last six years, may be numbered based on current economic trends.
Former socioeconomic planning secretary Cielito Habito has sounded the alarm about a possible slowdown in economic growth, especially in light of rising food prices and unemployment rate.
In his April 7 column for the Philippine Daily Inquirer, Habito, an economics professor at the Ateneo de Manila University, noted that inflation has risen to its highest rate in 28 months: 3.4 percent.
Meanwhile, the unemployment rate has returned to 6.6 percent and the dollar has breached the P50 level.
“There is also the disturbing news that the Philippines’ current account—the balance of current foreign exchange inflows net of current outflows—has turned negative for the first time since 2002,” Habito noted.
Worse, remittances by overseas Filipino workers slowed down from around 7 percent of the gross domestic product in recent years to 5 percent in 2016.
While the increase in the prices of commodities can partly be attributed to the rise in oil prices, Habito said the uptick in food prices due to importation constraints imposed by the government, was also to blame.
Of this, Habito said: “I have long pointed out the folly of unduly shielding our domestic markets at the expense of the consuming public, when there are better ways to assist our domestic producers without wide collateral damage.”
The former Cabinet official said the unemployment rate should be monitored as its rise came even if the number of people actively looking for work has gone down to 60.7 percent from last year’s 63.6 percent.
What do the numbers mean?
“To the weak of heart, these trends signal worse times ahead. Is the oft-cited Philippine economic success story of the last six years unraveling, yet again? Those of us who remember the economic dynamism we witnessed in the 1990s, only to hit another bust in succeeding years, may be getting a sense of déjà vu, of having been here before,” Habito said.
But while people shouldn’t be losing sleep over the latest economic developments, Habito said the country may be headed in deeper trouble if “we ourselves insist on doing the wrong things and cause our own problems.”