Waiting eagerly to be impressed

P-Noy declared that we will all be impressed by the GDP numbers for last year. I can understand his enthusiasm but it would be better for the country if he essentially remains unimpressed because even with a growth rate of 6.6 percent for last year, that will still be uneven and enjoyed only by the elite.

I was in a meeting with some business leaders recently and someone mentioned a survey that indicated revenues for neighborhood stores are flat with a downward bias. That could mean a significant loss of purchasing power at the grassroots that’s in line with a still alarming hunger incidence.

While I eagerly wait to be impressed by a really significant progress in our economy, the numbers that should matter most to someone like P-Noy is the hunger rate being monitored by SWS. The SWS survey done over Dec.8-11, 2012, found 16.3 percent or an estimated 3.3 million families experiencing involuntary hunger at least once in the past three months.

 While it is true that there is a decrease in the hunger rate in the latest (Fourth Quarter 2012) Social Weather Survey, the absolute number of people going hungry should still be a cause for concern. For hungry people, a GDP growth rate impressive to P-Noy and most economists means nothing.

The measure of hunger, according to SWS, refers to involuntary suffering measured when respondents answer a survey question that specifies hunger due to lack of anything to eat. The latest hunger rate is almost five points below the 21 percent (est. 4.3 million families) in August 2012, and the lowest since 15.1 percent in June 2011.

But severe hunger, referring to those who experienced it “Often” or “Always” in the last three months, rose from three percent (est. 611,000 families) to 3.6 percent (est. 731,000 families). Since the survey talks of families, multiplying those numbers by five (a conservative number of family members) will present millions of people going hungry.

Of course it is not possible to totally eradicate hunger and poverty in the three years of P-Noy’s watch so far. But it is important that the incidence of hunger is not lost or minimized in the enthusiasm with another number called the GDP growth rate.

Before P-Noy and his economic managers start to celebrate, they must move with a greater sense of urgency on programs that create jobs and bring about more inclusive growth. Only then can we be justified to be a little impressed.

Noted economist Nouriel Roubini outlined the task still at hand during a speech before a select group of local business leaders last Wednesday. The challenges, Roubini said, include low competitiveness due to peso appreciation, possibility of asset bubble, low investment amid high consumption. The Philippines, he said, needs to tilt investment-consumption balance… the opposite of China’s situation. We absolutely need more investment.

More than the GDP number, I am impressed with P-Noy himself. As I wrote in this column some weeks ago, what he has accomplished so far by way of delivering his anti-corruption message is impressive.

Credit P-Noy for seeing to it Ate Glue is arrested and charged. So is the FG facing charges. Her Ombudsman and Chief Justice are out of office and can no longer protect her. P-Noy has successfully tangled with the Catholic Church and the tobacco lobby to produce positive pieces of legislation that languished in the legislature for years. And he has brought China before a UN body on the territorial disputes. All those show guts and leadership we need from our leader.

No wonder the Philippines is now on investors’ radar screen. But as I have been saying here, we need to be more than blips on investor radar screens and we need to get more than praises from economic analysts. We need to break the barrier that keeps investors, local and foreign, from deciding to risk capital here in enterprises that create jobs.

One roadblock to greater investor interest and a more inclusive economic growth is inadequate infrastructure. I am hoping that P-Noy will give infrastructure development a strong push in the next few months so he can leave a concrete legacy before bowing out of office.

NEDA Chief Arsi Balisacan has so diplomatically talked about this continuing failure in infrastructure development. A NEDA report which strongly bears Arsi’s influence declared that “State agencies should further accelerate their strategies to achieve targets in the transportation sector by 2016.” This is according to NEDA’S newly released Socioeconomic Report (SER): 2010-2012.

During the recent celebration of NEDA’s 40th anniversary, P-Noy said data would show that the Philippine economy was growing. That is true. NEDA’s Arsi Balisacan confirmed that “We forecast growth in 2013 to be between six percent and seven percent and in 2014 between 6.5 percent and 7.5 percent.”

But Arsi also said the government hopes to see a “more vibrant industry sector,” as the world economy recovers in 2013 and 2014. Arsi had been saying all along exactly what Roubini is also saying that the economy must become more diversified to complement consumption with exports and investment.

Arsi gets to the crux of the matter: “We have a lot of problems in infrastructure from transport to power, ports, airports. We are paying very strong attention to all these infrastructure issues. This year and next year, there’s a strong focus on infrastructure development.”

Line agencies have long pointed to NEDA as the bottleneck in the execution of infrastructure projects. Nothing gets done without NEDA’s okay and NEDA requires studies upon studies before giving their imprimatur to project proposals. Arsi has announced that he has streamlined the approval process and NEDA can no longer be blamed for delays in project implementation.

To me, it now seems that the main infrastructure agencies, DOTC and DPWH should bear the blame for delays and misguided projects. DOTC is so confused about their projects plus the fear of its past secretaries to sign deals so that nothing is getting done.

DPWH on the other hand seems to give the sense that they are running out of projects and they just want to spend money without any real thinking on whether some projects are worth doing. They took down a usable bridge in Iloilo and built a new one too big for the road it serves. They want a massive rehab of EDSA that’s not needed and will only make things worse in Metro Manila’s main artery.

EDSA’s driving surface is far from world class but it is not that bad either. The blockings they are doing on weekends should just about cover what needs to be done. I am reminded of how they once tore up Ortigas Avenue, even portions that are perfectly usable, because they had to use up a grant or something.

The problem with EDSA is not the road surface but the traffic flow… too many buses. A massive rehabilitation that will limit the number of usable lanes will only make things worse.

Then too, DPWH should focus on getting the private sector proponents to accelerate work on the NLEX-SLEX connector road projects. Those two projects would help reduce the volume of traffic now on EDSA.

Also, DPWH and PPP should get work started on C-6, the road that will connect SLEX to NLEX via the Laguna de Bay shoreline through Taytay to Bulacan. That new road will also reduce the volume of traffic now stuck on C-5 and EDSA.

I am sure that a major rehab of EDSA now will do more harm than good with more people cursing government daily as they battle impossible traffic jams. 

Going back to P-Noy and economic growth, it is good to know that “inclusive growth” is on top of his mind. It is also easy to see the logic of his thinking: “This is why we are continuing our efforts to level the playing field, to weed out corruption, and to step up our competitiveness in the global market. This is why we continue to invest in our human capital through education, health, and social services.”

What P-Noy needs is a good enforcer to make sure the major infrastructure projects get done fast. Arsi as NEDA Chief is logical for the job but he is too soft spoken to be an effective enforcer. Maybe Rene Almendras can take on this job.

Unless there is someone constantly asking the line agencies about progress in their projects, nothing much will be done… and we could well disappear from the radar screens of investors again. I am afraid we will wait to be impressed only to be disappointed again.

Stock market

For those of you who missed the bull run in the stock market and hopelessly waiting for a correction to move in… here’s something to remember:

The only way to make killing on the stock market is to shoot your broker.

Boo Chanco’s e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco