Senior citizens reflect on Philippines' stalled economic growth: 'What went wrong?'

Since the Philippines gained independence in 1946 and Filipinos finally took control of the nation’s path to prosperity, it has always been our cherished dream to join the ranks of affluent nations. From that time on, each succeeding generation has been gauged or measured against the country’s economic status during its time at the helm. After all, the country’s level of development is the sum of all its citizens’ contributions during a specific period. After World War II, the Philippines was widely regarded as one of the Asian countries most likely to become a developed nation. We possessed formidable built-in advantages: 1) abundant natural resources; 2) a strategic location; 3) a high literacy rate; 4) proficiency in English and 5) close ties with the United States, the world’s dominant economic power then. Indeed, the 1950s seemed to vindicate the expectation. The economy grew by 6.5 percent to 7 percent; the currency remained stable; and the country emerged as one of the region’s leading economies, behind only Japan. Filipino workers were readily absorbed by the domestic economy and working abroad was virtually unheard of. Well-off Filipino families even employed foreign yayas (helpers). No wonder many old-timers remember this bygone era as our “Golden Age.” The 1960s somehow tempered the optimism of the previous decade, as economic growth slowed to 5.4 percent, a still respectable level. Back then, our Makati central business district, its skyline dotted with gleaming, modern skyscrapers, was the envy of our Asian neighbors (though today their commercial and business districts dwarf ours). The 1970s heralded the start of our economic underperformance. Ballooning foreign debt and chronic fiscal and budget deficits had started putting a heavy strain on our economy. While we still registered gross domestic product (GDP) growth of 6.4 percent, countries like South Korea, Taiwan, Singapore and Hong Kong surged ahead, posting average growth rates of 8 percent to 10 percent. The 1980s ushered in our worst economic performance thus far, as we reeled from a triple whammy of severe recession, a debt crisis and political turmoil. In contrast, other Association of Southeast Asian Nations members, like Malaysia, Thailand and Indonesia, registered phenomenal growth, catapulting them into tiger-economy status. The decade also signaled the start of China’s economic miracle, with double-digit annual GDP growth that continued unimpeded into the next century. The country’s performance in the succeeding three and a half decades can best be summed up as middling and erratic. Even if we finally attain the coveted high-middle-income status this year, we would still be the laggard, as many of our regional peers had already reached that level—or surpassed it—many years ago. Today’s senior citizens, most of them born in the 1950s and 1960s and already at the twilight of their lives, have more time to reflect on their generation’s economic contribution—or lack thereof. Although some are still active in running the country’s economic engine, many are now retired and idle. The question troubling their minds is: Where did we go wrong? Finger-pointing as to who or what to blame has become a favorite pastime of our seniors. The usual suspects include our more than three centuries of colonization, the inherited Spanish culture, our Christian faith, American interference, our system of government and our corrupt politicians. From the above list, only the last two seem valid. The rest won’t wash because other countries that are now prosperous share the same historical or cultural baggage. What is undeniable is that our leadership and system of governance have fallen severely short. Those two problems are intertwined. Corrupt and unqualified leaders came to power and retained power because the current system is loaded in their favor. The prohibitive cost of election puts qualified but less affluent candidates at a huge disadvantage, allowing wealthy and entrenched political dynasties to remain in power. Yet ordinary citizens cannot escape responsibility for such an outcome. We elected these officials in the first place. That makes it a generational sin. If we have to identify one major reason we failed to keep pace with our neighbors, it would be our inability to attract sufficient foreign direct investment (FDI). For whatever reason, no administration since independence has managed to significantly increase it. Primarily because we have focused too heavily on legislative measures for solutions—enacting new economic laws or amending provisions of the Constitution—instead of fixing administrative problems that discourage investors. These include honoring government contracts, improving inadequate infrastructure, eliminating red tape and corruption, reducing high electricity costs and addressing bureaucratic incompetence. Until we tackle these issues head-on, no amount of economic legislation or constitutional amendment will deliver the FDI we need. Vietnam is a case in point. Despite enduring two decades of continuous warfare, it has overtaken us, attracting historically higher FDI and now receiving more than three times what we do. The remnants of my generation, with diminishing ability to influence our economic trajectory, are relegated to being mere observers in our country’s unfolding saga. We impatiently await the start or completion of big-ticket government projects essential to development: airports, railways, tollways, seaports and other major logistics and distribution infrastructure. Many worry they won’t live long enough to see the projects’ completion and enjoy their benefits. We are quite literally living on borrowed time. But we need not remain passive and apathetic about our country’s future. We are not totally powerless. We can join forces with the youth to demand changes in our system of government and use our votes to elect the leaders we truly deserve. We must utilize our remaining years and accumulated influence to change our country’s direction. Giving up is not an option. INQ The author is member of the Agribusiness Committee of the Management Association of the Philippines. He is also the adviser of the Philippine Disaster Resilience Foundation and is former president of UCPB-CIIF Finance and Development Corp. and UCPB-CIIF Foundation. 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