On the surface, 2013 appeared to be another banner year for the Philippine economy. Its growth outpaced the rest of Southeast Asia, earning an investment rank upgrade from Moody’s. That followed similar credit ratings upgrade from Fitch and S&P, amidst a lukewarm global economic mood. And according to the World Economic Forum, the Philippines has jumped from 65th to 59th in the 2013-2014 Global Competitiveness Index.
The World Bank has joined in the caravan of confidence, predicting a 6.9 percent growth in 2013, and 6.5 percent in 2014. The Manila-based Asian Development Bank also issued similar forecast. In comparison, the International Monetary Fund issued a more modest assessment, forecasting a GDP growth of 6 percent in 2013 and 5.5 percent in 2014 .
In the perpetually traffic-congested capital Manila, a real-estate and building boom is taking place, from the high-income district called Bonifacio Global City, to the suburbs of Bulacan. Government statistics show that the economic growth was primarily driven by “robust performance” of the real estate industry. In a separate report the World Bank said the country has added 10,600 real properties in 2013, almost triple the annual average in the last five years.
In the country’s central business district of Makati, high-end brands from Louis Vuitton to Prada continue to expand and make brisk business. Even Rolls Royce is rolling out its first dealership in the country. According to Fast Market Research, household spending is expected to hit US201.39bn in 2013.
Part of the boom is directly linked to dollar remittances from overseas Filipino workers. The country’s central bank said it expects remittances to grow to a record high of $23.6bn in 2014. During the first 10 months of 2013, remittance has already hit $18.54bn, up 6 percent from last year’s record high. Worldwide, the Philippines ranks as the 4th biggest recipient of remittance, next only to India, China and Mexico. And most of the remittance come from Filipinos in the Middle East and the US.
But as the year 2013 draws to a close, the mood in the Philippines is subdued at best, despite all the rosy statistics. And that’s in no small part to the series of natural and man-made disasters that hit the country, foremost of which was Typhoon Haiyan, which left at least 6,000 dead and 1,779 still missing.
Haiyan unleashed a torrent of despair among the populace, exposed the country’s deep-rooted economic inequality, and revealed the national government’s inability to cope with major disasters.
According to the country’s emergency body, 16.08 million people were affected by Haiyan, or a sixth of the country’s estimated 100 million population. The UN said that the super-typhoon, the strongest in recorded history, left 4.4 million homeless and inflicted at least $15bn in damages.
Of lesser economic consequence was the 7.2 magnitude quake in central Philippines, which killed over 200 and totally destroyed 14,500 structures. But it also left at least 40,000 people homeless. Meanwhile, the armed conflict in southern Philippines has killed at least 183 people, displaced 100,000 people, and inflicted billions of pesos to the economy.
The exact toll to the economy remains to be counted, but it already prompted the World Bank to lower its Philippine growth forecast in 2013 and 2014. Still, it said that reconstruction efforts should boost economic growth in 2015.
Amidst all these, fundamental economic problem remains. An estimated 3 million people are unemployed in 2013, and a staggering 23.75 million people live in poverty in 2012. Additionally, over 40 percent of the population is still estimated to live on less than $2 per day, according to the International Labour Organisation. No surprise that as many as 13 million of its citizens are working or living abroad
As Leonor Briones, a former national treasurer, pointed out in one news report , “There are so many leaves that you can’t see the forest anymore”.
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