The Philippine Statistics Authority reported that our economy posted a remarkable growth rate of 7.1 percent during the third quarter of the year, the first quarter of the Duterte administration. That is happy news. It tells us business and consumer confidence strengthened rather than waned with the entry of a reform-minded leader.
Growing at over 7 percent makes the Philippines the growth leader in all of Asia. It eclipses the growth rates posted by
China, Vietnam, or Indonesia. Becoming the growth leader is not the important thing, however. What is more important is to make this growth rate sustainable and ensure it is inclusive so that it registers in declining poverty rates.
Every administration that serves is, in the end, judged by how much or how little it has done for the national economy. By extension, that is a measure of how much or how little was done to liberate our people from poverty. This is, after all the bottom line. We are not growing the economy for its own sake. We are growing the economy to make our people’s lives better.
The Duterte administration evolved a 10-point economic agenda for the country. This agenda is a bold one. It seeks rapid but inclusive economic growth. It seeks to reduce personal income tax rates while at the same time boosting government revenues to enable an ambitious infra program. It aspires for a modernized agricultural sector to liberate the rural poor.
This agenda sets clear and quantifiable targets. The GDP is targeted to grow at 7 percent or better each year. That growth will be assured by efficient public spending. The poverty rate will be lowered to 15 percent or less by 2022, at the end of the Duterte administration. By that time, we expect to raise our per capita income to the level where China and Malaysia are today.
Growing at 7.1 percent in the third quarter sets our economy on a higher growth plane. This will have to be the minimum pace of growth if we expect to reach high middle-income status in the medium term. President Duterte’s economic team is confident the targets are eminently achievable, provided the other reforms are put in place on schedule.
As the 10-point development agenda indicates, this administration is fully aware that inclusive economic growth does not happen in a vacuum. One cannot simply shove business and monetary levers and expect inclusive economic growth to happen. There are other conditions that need to be provided to abet our remarkable economic performance.
First, there must be complete rule of law and a regime of rules. Without those we fail. This is why the President put priority on the war on drugs and the eradication of corruption. The networks of drug lords have acquired so much wealth and so much influence they could skew our politics. The same may be achieved by other networks of dirty money, such as the syndicates of corruption.
Second, we have to heal the wounds of internecine war and assure domestic peace for the next generation of Filipinos. Over four decades of insurgency did not only drain public resources and dislocate so many. All the fighting also caused the development of many areas to be retarded, adding to the uneven growth among our provinces. The fighting caused farms to be left untilled, families to evacuate from their sources of livelihood, and large numbers to migrate to the cities.
On his first day in office, the President put priority on the war on drugs and on advancing the peace process with both the communist and the Moro rebels. In addition to the rightfulness of achieving lasting peace for our people, a successful peace process will hasten integration and help achieve truly inclusive growth for all.
President Duterte understands that while economic performance might be the final measure on which his administration will be judged, that economic performance cannot be achieved without breaking the backs of the drug cartels and winning the insurgents back to the fold. He fully understands that while it is the economy that ultimately matters, growth will be meaningless unless paired with social peace. The war on drugs is only a small part of the war on poverty.