Has all that political noise weaken our economic growth?


By: John Carlo Tria

WITH THE launch of big ticket Ayala land projects in Davao and Cebu last week, the question is therefore begged: have business prospects improved in the Philippine south?

We take a critical look at the previous assertion and fear of some that it will create a lot of political noise and instability that drives away business.

While some reported an initial slowdown in business activities in June right after the Martial Law declaration, news from hotels and restaurants in Davao in particular report that immediately in July business picked up, peaking during the Kadayawan festival last week.

Hotels were fully booked and restaurants packed. Moreover, new conventions and corporate events already fill venues until March.

This brings us to whether political noise is an effective damper to growth.

True, the past year has been politically tumultuous. But let’s look at the Gross Domestic Product Growth rate over the last three quarters.

From 7.1% post election, which is expected due to all of that election spending, it went to a realistic 6.4 and back up to 6.5%. This time, it was on the back of increased agricultural output and manufacturing growth. These figures are all within forecasts of the government and ratings agencies.

More importantly, these figures show solid growth that boosts local incomes to farmers and workers.

Thus, despite a change in government, growth remains high. Who said last year that we’d end up like a crashed Venezuela? They’d better check their figures and forecasts.

As far as forecasts show, ratings agencies and multilateral donors have kept their forecasts strong. Credit Suisse have in particular raised their forecast from June.

What will really bring in the growth are economic fundamentals anchored on renewed and ramped up infrastructure spending.

This will boost employment and create conditions for continuous investment where in incentives and credit ratings alone have proven inadequate when compared to neighboring Indonesia, Malaysia and even Vietnam.

These figures and infra spending we will need to monitor, and clamor for, if needed.

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