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While a comprehensive assessment is still forthcoming, the following facts and figures provide a quick snapshot of what the Aquino administration has managed to accomplish when compared to previous administrations. The goal here is not to be exhaustive, rather to focus on a few illustrative indicators using a longer perspective covering at least the last 4 to 6 administrations.
It illustrates, for example, that some of the fundamental indicators for economic growth and macroeconomic stability have improved dramatically in the last few years. (And to be fair, some of these trends began to take shape during the Arroyo administration.) Total public debt expressed as a share of GDP is at its lowest level in nearly 25 years.
Corruption perceptions have also improved dramatically, placing the country on its best rating in nearly 15 years. Perhaps this stands as a testament to the many corruption cases that have been rooted out and prosecuted by the country’s Ombudsman, as well as the Open Government Partnership, which builds toward a more transparent and participatory governance framework for the public sector.1
The country’s economic competitiveness rankings, as measured by the World Economic Forum, have also improved to reach its highest level in nearly a decade.
With improving debt and governance indicators, investment analysts have since acknowledged the marked improvement in the country’s economic prospects and credit worthiness. The Philippines attained its first ever investment grade status in March 2013, as part of 11 consecutive credit upgrades by debt-watchers Fitch, S&P and Moody’s between 2011 and 2014.
Perhaps due in large measure to these strong fundamentals, average annual net foreign direct investment inflows have almost tripled compared to the Arroyo administration’s.
Another bright spot is the increased attention to education and health spending. The Aquino administration tops all other recent governments in real public sector spending on education and health services. In addition, the country’s social safety net program—the Pantawid Pamilyang Pilipino Program or 4Ps—now covers almost all 4 million plus poor households in the country. While the program focuses on children and gives them a fighting chance to break free from poverty when they finish at least high school, it does little to directly address the incomes of the present generation of poor workers.
Had the credit upgrades been more inclusive in their benefits to the vast majority of firms, it would have been possible to address this. Progress has not been very even. In an article the AIM Policy Center published with GMA News Online we presented evidence that many smaller firms—comprising about 99 percent of the country’s firms and accounting for almost 65 percent of the country’s employed—are failing to take part in the credit bonanza.
While credit to large conglomerates has flowed quite well, lending to micro, small and medium scale enterprises has barely increased.2 This effectively weakens the “inclusiveness” of the macroeconomic improvements and subsequent growth performance ushered within the last few years.
Unsurprisingly, job creation has been tempered in the last decade, with the exception of higher skilled jobs (such as those in the BPO sector). Productivity in the agricultural sector has also been volatile, hinting at the structural challenges that prevent many farmers from dramatically increasing their incomes. As a result, the country’s impressive growth figures in the last few years have barely made a dent on poverty.
Official poverty statistics reveal that roughly a quarter of the population is stuck in poverty. And according to the SWS, self-rated poverty has only marginally improved when comparing the average during the Arroyo and Aquino administrations. Self-rated hunger has also remained in the range of about 15 to 25 percent in the last decade, declining only very recently to about 12 percent.
Ronald U. Mendoza is the Executive Director of the Asian Institute of Management Policy Center. Jessa Bacani and Monica Melchor are his co-authors in this article.