EDITORIAL - Waiting for inclusive growth

On the heels of 6.6 percent GDP growth last year, the economy grew by 7.8 percent in the first three months of 2013, according to the National Statistical Coordination Board. The growth rate, higher than the government expected, surpassed even China’s 7.7 percent for the same period, making the Philippine economy the fastest growing in Asia.

It’s the latest piece of good news for the country, whose credit standing was recently upgraded to investment grade by two international rating agencies. Much of the good news emanates from confidence generated by the focus of the Aquino administration on good governance. The confidence must be sustained and reinforced to bring in job-generating investments. This should help the administration confront the major challenge of making the masses enjoy the fruits of economic growth.

There was no trickle-down effect even in the previous administration, when GDP grew by a robust 7.2 percent in 2007. Growth slowed to 4.2 percent in 2008 and plunged to 1.1 percent in 2009. It jumped back to 7.6 percent in 2010, but election spending could have stimulated the growth.

Meanwhile, official statistics show that the poverty level has remained largely unchanged from 2006 until early 2012. Official data and studies show that the country has one of the highest income disparities in the region, with the bulk of wealth controlled by a miniscule fraction of the population.

The contribution of the business process outsourcing industry to the economic growth pie has been growing exponentially. For many years now, however, GDP growth has been largely consumption-driven, riding on the backs of remittances from Filipinos working overseas because they don’t have better employment alternatives in their own land. The growth in the first quarter of this year has been no different.

Rosy economic figures and consistently high business confidence have also failed to translate into substantial foreign direct investment, with neighboring countries still getting significantly higher levels of job-generating FDI. World Bank Country Director Motoo Konishi recently said the Philippines is no longer the sick man of East Asia but its rising tiger. The latest GDP growth rate bolsters his assessment and is welcome news. The challenge for the administration is to make sure the benefits of growth will be enjoyed not just by a privileged few but by all Filipinos.