YOU cannot blame President Duterte’s economic managers for exulting about last year’s economic results and taking credit for it, particularly the second half when the imprint was unmistakably that of this administration, and without any grey area mixed with and diluted by the fiscal policy of the previous administration.
What can be gleaned so far from fiscal policy is that the economic managers are employing Keynesian tactics to stimulate the economy, the central tenet of which is that government intervention can either stimulate or stabilize the economy, as the case may be. Keynesian economics is the brainchild of British economist John Maynard Keynes (1883–1946), deemed as the founding father of modern macroeconomics. His landmark work A Treatise on Money established dynamism in viewing the economy and transformed economics into a study of how incomes and expenditures flow.
Now, is that good or bad for the 104 million or so Filipinos?
The unequivocal answer is: So far, so good.
“The Duterte administration’s decision to end years of public under-investment and switch to higher deficit-spending mode has translated into more money spent on infrastructure; on education, health, skills training and other forms of human capital development; and on social protection for the poorest of the poor,” Finance Secretary Carlos Dominguez III was quoted as saying in a statement released by the Department of Finance on Friday.
That is government intervention in Keynes’ view, with fiscal spending as a component of the economy, or deficit spending as Dominguez put it. In other words, the more money the administration lets loose into the economy, the more the economy grows.
What can arrest economic development at this point is obviously corruption, like the Big C that is well-entrenched in the public sector, be it the uniformed services or the civilian component which must be purged totally for the administration to fulfill “its commitment to start spending big on three priority areas to sustain high growth, attract investments and create jobs, accelerate poverty reduction and transform the Philippines into an upper middle-income economy by 2022.”
That is why President Rodrigo Duterte must be persistent in weeding out corrupt government officials, a promise that must be fulfilled come hell or high water to free the economy from the shackles of the bad elements, the pretenders who peddle themselves as public servants in sheep’s clothing that have invaded and besmirched the good name of government service at the expense of the majority of Filipinos who simply want to enjoy the fruits of their labor by having a house of their own and being able to travel where they want to with the peace of mind that goes with a safe and secure environment.
The Filipino dream embodied in Ambisyon Natin is a noble undertaking of this administration, and high economic output of goods and services is the way to achieve that dream. The prelude to the program is simple: “In 2040, we will all enjoy a stable and comfortable lifestyle, secure in the knowledge that we have enough for our daily needs and unexpected expenses, that we can plan and prepare for our own and our children’s future. Our family lives together in a place of our own, and we have the freedom to go where we desire, protected and enabled by a clean, efficient, and fair government.”
As Keynes noted, the output of goods and services comes from consumption, investment, government purchases or fiscal spending and net exports. Certainly, the government can influence the four components of gross domestic product (GDP), but it has full control of only one, and that is fiscal spending.
We all know the story of how the economy grew by 6.8 percent last year, one of the fastest growing economies in Asia, from 5.9 percent in 2015. And, yes, fiscal spending allowed the economy to grow that much as measured by the GDP.
There is no need to complicate matters at this point. The way is simple enough: let loose more of the national budget for the benefit of the Filipinos, not to line the pockets of corrupt government officials in both civilian and uniformed services. The nation’s budget is anyway funded by the taxes paid by the people. They deserve to get the most out of the equation.
THE MANILA TIMES