A view of the 2019 economy

The good news for the economy in 2019 came in May, when S&P Global Ratings gave the Philippines its highest credit rating ever, BBB+. The debt watcher assigned a “stable” outlook to the rating.

As 2019 draws to a close, we take a look at the Philippine economy, how it compared to last year, and its challenges for the ensuing year.

The year 2018 saw the country hit its highest inflation rate in this decade, peaking at 6.7 percent in September and October last year. To control inflation, the Monetary Board increased the interest rate five times during the year.

The price of rice, the staple food of Filipinos, hit an all-time high in 2018. The national average for well-milled rice in the last week of September last year was P49.37 a kilo.

Gross domestic product (GDP) growth in 2018 was 6.2 percent. This is high growth but below the government target of 6.5 to 6.9 percent for the year.

The Social Weather Stations’ (SWS) survey for the fourth quarter of 2018 showed that 50 percent of the families surveyed considered themselves as “mahirap” or poor.

We will be ending the year 2019 in 18 days, and we can already assess how the country’s economy has fared.

The good news for the economy in 2019 came in May, when S&P Global Ratings gave the Philippines its highest credit rating ever, BBB+. The debt watcher assigned a “stable” outlook to the rating, which means it expects to maintain its grade in the next six months to two years.

The inflation rate started to go down as early as January of this year and registered at 1.3 percent for November.

The price of well-milled rice, per Philippine Statistics Authority figures, has gone down to P41.53 per kilo as of the third week of November.

Responding to the decline in the inflation rate, the Monetary Board brought down the key interest rate three times this year.

The GDP growth rate was 6.2 percent in the third quarter of 2019. However, the Asian Development Bank forecasts annual GDP growth to be around 6 percent, slightly lower than that of 2018.

As to the SWS survey for the third quarter of 2019, results found 42 percent of families, estimated at 10.3 million families, considering themselves as poor. This is an improvement from the estimated 11.6 million families in the fourth quarter of 2018.

It is to the credit of the administration that it has passed legislation that will help the economy, with special mention being given to the Agricultural Free Patent Reform Act.

This land patent reform law will give some 2.5 million people full property rights to their land, making such immediately available for trade and investment and ultimately help in hastening development in the agricultural sector. The Foundation for Economic Freedom was recently awarded the Atlas Network’s 2019 Templeton Freedom Award for its advocacy and work in the enactment of the law.

The release of the implementing rules and regulations (IRR) of the Ease of Doing Business and Efficient Government Service Delivery Act and the appointment of a director-general in mid-2019 was also a positive step in seriously cutting red tape in several government agencies and in improving the country’s competitiveness.

We have had basically positive results for the economy in 2019. However, there are certain matters that will have to be addressed to ensure continued economic growth.

The “Build, Build, Build” program, which is a cornerstone program of this administration, has not reached the target and expected levels it was supposed to achieve. Measures will have to be taken in 2020 to speed this up. The election of 2022 will be here before we know it and legal and political issues will definitely impinge on construction and development work.

The results of the recent PISA (Programme for International Student Assessment of the Organization for Economic Cooperation and Development) survey that ranked Filipino children at the bottom of 79 countries in terms of reading, and second to last in math and science, is a cause for grave concern. The country should ensure that its educational system will build a competitive workforce that can face the challenges and seize the opportunities of the future.

Corruption, unfortunately, is still a major issue. This is the real cancer of society and what I believe is the primary obstacle to economic growth. Though the corruption perception index for 2018 climbed up 12 notches, ranking the Philippines 99th out of 180 countries (compared to its 2017 ranking of 111th), the average Filipino businessperson will tell you that there is so much more to be done in this area.

In sum, compared to the previous year, we can say that 2019 has been a relatively good year for the economy. Hopefully, we can have an even better economy in 2020.

Yesterday, 12 December was the feast day of Our Lady of Guadalupe, the patroness of the Philippines. Let us pray this day to Our Lady of Guadalupe to give our country peace and prosperity in the coming year.