EDITORIAL - Strong growth

The pork barrel scandal eclipsed the positive news the other day: with 7.5 percent GDP growth in the second quarter, the Philippine economy is now the fastest growing in Southeast Asia, matching the much-slowed growth rate of China.

As in the past, the GDP growth was consumer-driven, with some analysts noting that election spending was a major factor in the second quarter. But the services sector, manufacturing and construction also contributed to the growth as well as higher investments in fixed capital. Growth in industry was faster than in the services sector.

These trends indicate that the economy is becoming less reliant on consumer spending and the remittances of overseas Filipino workers, and there is increasing activity in areas that account for sustainable growth. These are the areas that create jobs and pave the way for inclusive growth – something that has eluded the nation despite strong economic performance.

Driving these increased economic activities is high business confidence in the past three years. That confidence, in turn, has been fueled in large part by the focus of the Aquino administration on the campaign against corruption.

This campaign has been shaken by recent corruption scandals such as those on the pork barrel and the Metro Rail Transit 3, particularly because officials or political allies of the administration have been implicated. The daang matuwid administration came to power on a platform of good governance. It cannot afford to let corruption scandals erode the moral authority that is indispensable in delivering on its campaign promise.

In dealing with the scandals, reforms must be implemented quickly and the guilty identified, prosecuted and punished before cynicism takes root even among those who at this point remain generally supportive of the administration. Restoring public trust quickly is necessary if President Aquino wants to sustain strong economic growth and make its benefits trickle down to the masses.