Irony of 2007

If there is one thing the year 2007 had showcased well, it was the strength of the country’s economic fundamentals. Despite unabated political noise, the important indicators of economic pulse remained stable, to the consternation perhaps of those who may have hoped to benefit from the destabilizing effects of the political noise.

At the end of the day, the second half of 2007 was pockmarked by an undeclared battle between political noises and the economy, with the former apparently putting the latter’s tensile strength to the test. The latter appears to have taken the upper hand.

By all indications, the gross domestic product (GDP) should reach, or even break, the seven-percent mark, beating most predictions. Consumer spending during the remaining days of 2007 should boost that prognosis.

And definitely, the robust spending could only be attributed to an overall atmosphere of confidence. Sans this confidence, people would be holding on to their precious pesos. But at this time, they are more than willing to let go with the expectation that the strength of the economy is such that the money spent can easily be replenished via the economic and livelihood opportunities generated under a positive atmosphere.

The optimism can only be further boosted by projections that the unemployment rate is down to 6.3 percent from 7.3 percent last year, while inflation will stay at 2.7 percent, well within the 1.6 to 3.1 percent predicted for this year.

And if much is being spent by consumers during the holiday season, this is because the inflow of foreign exchange courtesy of our overseas Filipino workers has remained at all-time highs, undeterred by the political noise which would have dissuaded them from sending their earnings home. It would not be surprising if the total remittances of this sector hit $15 billion as forecast by the Bangko Sentral ng Pilipinas.

There is perhaps no better indicator of the atmosphere of confidence on the economy than the bourses. Stock market guru Astro del Castillo of the Association of Stock Analysts of the Philippines recently said that “there is a bit of a Christmas rally going on”.

But rallies have been the rule rather than the exception as far as the performance of the local bourses are concerned. Just last week, the Philippine Stock Exchange index gained 41.02 points or 1.17 percent.

The loudest applause, of course, belongs to the mighty Philippine peso which gained 17 percent this year against the dollar. Inevitably, it has earned the respect as the best-performing currency among all Asian denominations.

It is ironic that the sunshine in the economic landscape should persist despite the avalanche of political controversies that marked the second half of this year.

The political noises began with the re-entry of former Air Force sergeant Vidal Doble into our consciousness. His lackadaisical performance at the Senate sideshow was followed by the louder din of the national broadband network controversy that led to the resignation of then Commission on Elections Chairman Benjamin Abalos, and the sudden prominence of the younger De Venecia, Joey.

Other minor controversies dotted the political landscape culminating in that Pulse Asia survey which alleged that the public had lower esteem for the current dispensation compared to past national leaderships.

Nothing could be more ironic. The view is that the Pulse Asia survey is more the product of politically-conditioned perceptions rather than reality. It should be noted that the survey came in the aftermath of the series of  Senate-spun controversies. And as observers have consistently noted, none of these controversies were brought to their rightful conclusion.

Which was expected. The objective of the noises, it appears, was not to pinpoint accountability but merely to influence perception. And the Pulse Asia survey appears to be the logical next step in the unfolding script. At some point, the effect on perception had to be measured. And that was what the survey did.

The view is that the economic indicators run counter to the Pulse Asia survey. Corruption tends to bankrupt the economy, as history shows. But that does not appear to be the case at present. The economy is robust. Even Senate President Manny Villar, a Palace critic, was constrained to compliment the sunshine atmosphere of the economy in his most recent newspaper column.

The related view is that the issue being amplified by the Asia Pulse survey exists “primarily in the mind”. It was the “necessary consequence” of the novelty and prominent media play-up of the political conflicts. Business and economic performances do not generate similar media attention even if they are closer to reality than the political noise.

But there is one more positive note concerning this irony. The year 2007 has showcased the fact that the country may have finally divorced the economy from the political noise. It used to be that the economic indicators woefully registered downward trends at the slightest hint of a political controversy.

Not anymore. In 2007, the economy and the business community stood their ground. Asia Pulse surveys notwithstanding, there is sunshine in the economic landscape.

No noise could overshadow that reality.

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