A whole gaggle of headlines spoke glowingly of the Philippines: see Forbes.com, the Wall Street Journal, and Money Morning for examples (and why the news seems particularly cheery, can be gleaned from Bloomberg.com‘s contrasting coverage of Thailand). The President was quick to trumpet the news -and just as quick to give dagger looks to the skeptical, see Jove Francisco for an eyewitness account.
My column today is Official figures aren’t carved in stone (many thanks to Community Indicators for linking to, and commenting on, my column); I started with the debate on the origins of the saying, “Lies, Damned Lies and Statistics” and I also pointed to a column by Bloomberg’s William Pesek, to point out the skepticism that tends to greet the President’s announcements of good news, and how it bugs her that people question the numbers.
The numbers, after all, she might insist as a former professor, don’t like. And even if they did, there are enough numbers from different sources, that would still add up to something positive for her. .BusinessWorld’s Misery Index for example, argues that the population is less miserable under the present administration.
I also pointed to Carlos V. Jugo’s blog. His June 24 and June 28 entries in particular, take apart official statistics so people can make sense of them. His June 28 entry, in particular, has this handy-dandy visual, which shows how GDP figures are arrived at (and how each component’s rated by him).
Unfortunately, my attempt to digest the information failed on one account: in a comment, CVJ said I got it wrong:
… unless i’m mistaken, i think what happened was the reversed, i.e. the 6.4 and 6.2 percent growth figures were retrospectively adjusted upwards to 7.15 and 7.10 percent. The former was in the press release while the latter is in the time series tables of NSCB which is why i believe the higher figures are the adjusted ones. Also, from what i saw in the NSCB website (currently down), the adjusted figures for 1Q 2007 GDP growth is 7.1 percent (from the originally reported 6.9 percent).
Noted! I’m happy to say, though that reversing the figures doesn’t invalidate my point. And I’m glad similar points were raised by an expert, Cielito Habito, in his column for today, too. Read his take on the numbers.
Called China’s caddy by an Inquirer editorial, Comelec Chairman Benjamin Abalos continues to provoke controversy. Arbet Loggins@Multiply, says there’s an Abalos in every all; a pretty exhaustive look in A Pinoy Investment Banker’s Homepage.
there is also the continuing question of Jose Ma. Sison and his detential and trial. See my entry Why the Dutch are being harsh, in Inquirer Current. A recent roundup is Philippines wages counterinsurgency on multiple fronts, in the Christian Science Monitor.
A column by Patricia Evangelista looked at the issue of fraternity-related violence was also tackled by Luis Teodoro. See the blog lecture on anti-hazing law by Punzi; an interesting entry over at Sassy Lawyer, too.
Overseas, Sorry, Mr. President, You’re All Out of Troops takes a look at a problem the USA is bound to face in Iraq (see History Unfolding for a fascinating comparison of Presidents Bush and Truman). Also, as Malaysia recently marked its 50th year of independence, Asia Sentinel looks at the issues that confront the country.
Technorati Tags: Blogging, economy, media, philippines, politics, president, war, Washington DC
Excellent article MLQ3; read it first in Uniffors.com; posted my comment there too.
I liked the comment/line of Butch Valdez who was a guest at “Korina Today†earlier this evening when he said that, “FIGURES DON’T LIE. LIARS FIGURE.†That should sum up Gloria’s 7.5% GDP rate. Incredible & unsustainable !
mlq3, here we go again with all this negativity. of course, pgma’s detractors will always find something to dispute about her government’s economic statistics, unless they are disastrous – then they celebrate.
why don’t your people give the figures some time to prove themselves. it took many decades to reach the bottom of the economic barrel since the commonwealth. when pgma assume the presidency, just arresting the malaise and virtual bunkruptcy was already a herculean task. isn’t any degree of improvement a cause to rejoice?
i’ve said this and i say it again: the doomsayers and ‘half-empty-glass’ demagogues will always be there. fortunately for all of us, they end up with smelly rotten eggs on their faces most, if not all the time. apparently however, they could not have enough of it.
As they say the devil is in the details. When it comes to statistical analysis,the devil is in the data gathering.
I have worked in one of the ports before,and at a time I coordinated with the NSO as a rep of the private operator of that port;if the NSOs way of gathering is still the same as in a decade ago,then there is something wrong,they would not wait for the data to be completed,they only come on a particular date in a month,the result GIGO.
I know a lot has changed technologically wise, but if a part of the system remains constant,then it is still garbage in and garbage out.
Look what technology has done to the saying that numbers don’t lie,it was replaced by garbage. Sana di lahat ng ports ganon.
Although, it is true that a lot of spending has been done,including election spending and spending makes the GDP high.
It is to be acknowledged that the service sector like BPO,is to be recognized, but what about infra spending,to jumpstart oour tourism,and infra spending at least to put truth to the promises of more farm to market roads.
maybe if we could learn a thing or two from Indonesia,an archipelago which has more islands than we do.
Can anyone name a tourist resort spot other than Bali?
maybe putting eggs in one basket sometimes work,maybe.
I always have fun watching the body language of Ate Glo in televised press cons.That’s the only part of her that is not deceptive!
I don’t know why people keep falling for the “glowing” pictures painted by the sharemarket considering that share values are based almost entirely on perceptions and don’t give a true picture of the actual value of business assets.
Anybody who’s worked in big corporates knows how CEO’s today manage more towards the short-term ebbs and flows of share prices rather than on the long-term enhancement of the REAL value of REAL assets (which is where their REAL job lies).
There is a strong and PROVEN disjoint between the market value of assets and their TRUE value. Market value is determined mostly by the herd instinct of traders and investors. TRUE value on the other hand is based on a careful evaluation of an asset’s ability to yield SUSTAINABLE income (at acceptable return rates) over the economic life of said asset.
The crash of what were once poster children of the NASDAQ in the late 90’s and early 2000’s (Webvan, Pets.com, et al) — obliterating billions in PERCEIVED value — proved how share prices can massively mislead.
Note also (in the Bloomberg article) how CONSUMPTION is used as a main indicator of economic health rather than PRODUCTION when evaluating Third World economies. There’s a big difference between using consumption (which is driven by confidence/perception) and production (which is underpinned by the TRUE VALUE of an economy’s ASSET BASE) for evaluating economic health. In the Third World, the indicator of choice is often the earlier (consumption), for lack of anything of substance that robustly contributes to TRUE VALUE to measure against.
Celebrating based on perception and confidence level indicators is nothing more than a form of sane technocratic DELUSION. 😉 We should go back to basics and measure economic performance based on what we actually PRODUCE (remember that word?) sustainably.
sober more reasoned analysis you have there benigs. surprise, surprise!
benign0
we produce OFWs like you or maybe you don’t want to fall to that baracket if you are no longer a Filipno and no longer working.
Sustainability of producing such products,you have said it your self,the higher the return the better.
On the long term value of stocks,there was this study that if you keep ther for at least 10 years,no matter what the circumstances,and perceptions,panics and whatnot.. you would find out at it has a rate of 19 % per annum.
Forgot who that guy was,but I don’t buy it,anyways.
You keep on reiterating on what we produce,etc,etc.
Branding,as if it is not a practice to let local brands stay local and have a different touch internationally.
And you do not know the reach of the enterprising pinoy has reached for the past few decades, Mr, Benign0,or maybe you do, just because they are just quiet and just go on minding their own business for the past few decades,and serve their niche markets,does not mean they not doing well.If I may ask does branding still play a role in such enterprises. Yes,it does but not in humongous way you would want it.
Let me take for example,the ventures my famuily got involved in,we tried selling creppes by matching the market leader Breton and going head to head with them in premium prices,but who are we kidding; French creppes are sold in the sidewalks in France,so we tried to go cheap and its too late,the business already mushroomed to have enough players who caught their niche.
And its not all about branding; our creppery was, oops secret…. ,and what beat thenm here are low cost crepperies….
Latly,
and maybe you still look the other way on our success in China.
Jeez KG, what on earth are you talking about?
I would have fallen off my seat laughing had i seen this hilarious scene. I thought GMA should have retorted: “Only the President is authorized to lie!”
Well, let’s give the purported president of this country a break. The figures are credible, Im inclined to believe Tony Abaya’s analysis in his column today.
Nothing wrong about celebrating this one, especially if stronger economic foundation can be established to sustain the growth for at least 20 years.Here’s a toast to your growth. Klink!
But if it means 20 years of more Broadband Deals, 20 years of Benjamin Abalos and his ilk, 20 years of extra judicial killings, 20 years of Fertilizer scams and 20 years of wholesale electoral fraud… sa inyo na yung 7.5% GDP niyo.
It’s not just the economy, stupid.
figures don’t lie they say,go figure.
Quality is percived.
Whwn i say success in China ,I should have said humble begginings and contributions like Liwayway,Metrobank,jollibee,etc.
Those exporters to japan,Europe US,etc.
Eh mababaw lang ako eh,ikaw ang taas ng standards mo, I call it success you calll it pathetic.
Or sometimes when you are in a kind mood, you call it mediocre.
And by the way Benign0.. thank you for your response,sabi sayo mababaw lang ang kaligayahan ko eh.
Sir Benign0,
Medyo malabo nga naman ang dating ko kanina benigs sa unang entry ko..sorry po bara bra..
gawin nating simple….
In third word countries, the economy measured by consumption.
And the first world meeasured by what they produce.
Now,my turn to ask ,why focus only on consumption and peroduction when GDP has the formula of:
GDP = consumption + investment + (government spending) + (exports − imports)
Consumption is just a factor,and because of the circumstances that is our most highlighted indicator.
next question,Why is the stock market still considered a heavy factor after the mini crashes post 97 asian crisis.
Stock market crashes are results of panics,speculations,perceptions and the likes.
Good thing that 97 thing happen and some succeeding mini crashes like that of recent,but what really matters is how is how to provide long term returns,that is why I don’t buy that Filipino study of 19 % return on stocks based on past data,and what fund or wealth manager would take a client who demands such returns.
That is probaly why,the finacial chief also relies on bonds,either corporate bonds and other sureball government securities,and of course mutual funds.
Hoping for your reply on this.
I agree with benignO that it’s production-led growth, not consumption-driven growth, that will lead to sustainable economic development.
It’s very clear that the touted 7.5% GDP growth rate was a result of massive electoral spending (some estimate it to amount to about P101 billion). So, as long as no substantial number of jobs are created and the ordinary man’s life has not markedly improved, any GDP numbers that the administration may trundle out will be meaningless. They will simply remain that: GDP (Gloria’s Delusional Progress).
I forgot to add, 20 years of…*gasp*… Prime Minister Gloria Macapagal Arroyo!
Long live PMGMA!
The sad part of my Ate Glo is that we are so used to her being deceptive to the people that in the rare occasions that she might be telling the truth we don’t believe her.It’s her terrible credibility rating with the people!
Hope she is right this time on the “sustainable”economic growth of the country.
If you put it that way SOM then I have to agree with Benigs too!
I myself even said that almost all or simply a part of laundered money goes to election spending ,from gambling,drug.organized crime,and even corporations and church circulates.Maybe it so happen that this year was the highest.
kawawa nga lang si Pichay and Mike na largest recorded spender nung election,sen Ralph at Chavit pinakamadaming commercials olats pa din.
next year me baranggay elections,pero di naman siguro matatatpatan ang 7.5% GDP dahil wala ngang sustainable growth.
Minsan Benigs,come to think of it,you make sense,huwag mo lang ipagdiinan,marerecognize din naman ang mga points mo
Sorry, if others have to point it out for you para maconvince ako..
“I always have fun watching the body language of Ate Glo in televised press cons.That’s the only part of her that is not deceptive!”
Mav2008, can you explain in detail?
benign0,
The best example of an economist with ‘technocratic delusions’ is GMA. She is trained as a techocrat but she has a lot of delusions like making the Philippines first world by 2010. GMA has the technocratic skills to successfully do the wrong thing. Like this drastic and unilateral trade liberalization that killed many local industries. The-operation-is-successful-but-the-patient- died syndrome is what ails the Philippine economy. GDP is 7.5 but more Filipinos are hungry, homeless and jobless.
domestic production does not consist solely of tangible goods, consumables or non-consumables that the economy produces. the value of the services of ofw’s, local professionals, and laborers in service industries in both public and private sectors are, needless to say, counted.
i don’t think the 7.9% gdp rate is, for the most part, consumption driven. i think consumer spending is largely fueled by tremendous revenue derived from ofw remittances made to ofw families and dependents, as well as direct investments of fil-am retirees in real estate and business ventures. these remittances and investments are a product of the services rendered multiplied million times over. unlike ephemeral stock values, they are “real” wealth created by industry or labor, and therefore the economic growth resulting from it is truly the outcome of “real” production.
Amen, Bencard!
Amen to Bencard as well.
…although it’s 7.5% (not 7.9%) and technically, it’s consumption driven, which is not necessarily an inferior sort of growth that Benign0 portrays it to be (a point that Ca T also made in her blog entry more than a year ago).
yeah cvj. but to maintain that growth, we have to be continuously SPENDING. and any slight belt-tightening would see that growth sputter, then viciously spiral down. it would also help, if those same elites piggy-backing on this money, would stop funneling that money out of the country and into other offshore accounts and investments.
Devils, for the country to keep growing, someone has to continue spending whether it be the government or private individuals or other countries (via our exports). I know it makes sense at an individual level, but at the aggregate level, if everyone starts saving, the economy will collapse. That’s why the distinction that Benign0 makes (where he privileges ‘production’ over ‘consumption’) is a useless one. The relevant distinction is between different kinds of production, e.g. between sectors i.e. agriculture vs. industry vs. services or within the industrial sector – mining vs. manufacturing.
Similarly, his definition of TRUE value based on “a careful evaluation of an asset’s ability to yield SUSTAINABLE income (at acceptable return rates) over the economic life of said asset“, in a free market, is already embodied in the price of an asset where ‘TRUE’, in a fixed sense, does not have any meaning.
I agree with your last sentence. We should be like India where it is not so easy to transfer money overseas.
Amen to Bencard,as well…..BUT
The country displays as an indicator is GDP not GNP.
Where the OFWs remittances is a heavy heavy factor.
Damn those economic indicators!(madami pa yan)
************************
RE:transferring money overseas:may tawag dyan dati:dollar salting, kaya yata nagkaron ng binondo central bank at black market. madami pa din nakalusot.
Speaking of which,what happened to our anti money laudering law…
Our anti money laundering law is as weak as the anti movie,music,piracy law.
Bakit, walang budget?
Agree with Bencard.
… and agree with every word Devil wrote. Capital flight is a killer for any developing nation.
cvj, im not for or agst consumption nor for or agst production. i am merely stating that in a consumption driven economy, for growth to be sustained, we have to keep on consuming. in that sense, you merely said it better than i did. true. if everyone starts saving, the economy would collapse. and that’s bec the economy depends on money going around, not stagnating in private piggy banks.
i think hvrds explained this best some time ago. drawing comparisons bet US and China, the perpetual consumer and producer respectively. Walden Bello also said something abt the problem of overproduction (worldwide) testing the strengths of each country’s economies. he was saying something abt globalization losing steam and countries increasingly returning to protectionism once the ugly head of globalization reared itself.
Devils, i suppose what hvrds meant was that the US is the consumer of China’s exports. So, in effect, what you’re saying is that it’s better for us to produce for foreign markets who would then be our consumers, rather than us consuming what we produce or what we import. So a ‘production-driven’ economy is in effect an ‘export-driven’ one?
cvj, more than goods, we produce manpower (ofw’s) and then we export them. i guess, in that sense, our’s is an ‘export-driven’ economy fueled by production.
i concur with bencard re:ofw:exports
yun sana ang gusto ko sabihin kanina eh nafocus ako ke benigno at nawalan ng sense yung pinagsasabi ko.
We produce and export manpower.
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Walden bello’s assessment that globalization went pfffft,and go back to protectionism,that is what the US is doing protectionism and at the same time advocating globalization with its agri subsidies.
Globalizatization is here to stay.
What happened to the cement producers,and our agri sector when we stubornly “protect”them.
Did our cement technology improved,have we become more”efficient”,same as agri products, if ever we block the entry of chinese or others.
A catch 22,damned if you do and damned if you don’t situation.
In situations like these, refer to every alcohol drink commercial and replace drink with do everything. as in
Drink moderately!
Bencard, i agree with your conceptually equating ofw’s = labor exports as that is useful in some way. But for purposes of the GDP statistics, we are not counted as such probably because the services we render to our foreign employers is no longer domestically produced so it cannot be part of Gross Domestic Product. Instead, the income we remit is included as part of GNP under Net Factor Income from Abroad (NFIA. In the example given by Devils, what counts in the China as ‘Producer’ and USA as ‘Consumer’ comparison are goods that are produced domestically for sale abroad.
To whom it may concern:
Ano ba kayo?
Whenever you compare the Philippines with our SEA neighbors, you rely on figures, and you never go beyond what these figures say. Particularly, you never ascertain if their growths had a trickle-down effect. Yet how come pagdating sa atin, you go beyond the figures!
Di nyo ba alam na kaya tinawag na laggard ang ‘Pinas ay dahil while our rich SEA neighbors had a minimum of 9% annual growth rates for several years running, sa atin ay less than 4% lang. Ang basehan pa rin ay figures!
Like palagi nyong sinasabi, nalampasan na tayo ng Vietnam. Pero ang angat lang ng Vietnam sa atin ay growth rate lamang. (pero if the growth rates remain the same, malalampasan nga tayo, pero in the future pa) GDP and per capita GDP are still way ahead of Vietnam. The Philippine economy is still bigger than Vietnam.