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Yearend 2009: Economic Shocks, Political Ambitions & Challenges for the People in 2010. On the national economic & political situation IBON Foundation January 15, 2010. Global crisis update. World economy in new period of lower economic activity with false/shallow recoveries - PowerPoint PPT Presentation
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Yearend 2009: Economic Shocks, Political Ambitions & Challenges for the People in 2010
On the national economic & political situation
IBON FoundationJanuary 15, 2010
Global crisis update World economy in new period of
lower economic activity with false/shallow recoveries End of debt-driven growth
Another global slump/renewed economic downturn likely Declining stimulus packages from
2010 New asset bubbles
Chart 1: World Real Gross Domestic Product (GDP) Growth, 1970-2009e (%)
3.0
5.2
6.9
(1.1)(2.0)
(1.0)
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Year
%
Impact on the Philippines Philippines’ “globalized” sectors deeply
affected by economic crisis, economy effectively in recession since 2009
Economy not “resilient” but developmentally inert – “free market” policies since 1980s have: Weakened economy Distorted growth Increased vulnerability to external shocks Worsened joblessness
Gross Domestic Product, by industrial share (% of GDP, 1946-2008)
18.1
32.723.1
49.2
0
10
20
30
40
50
60
1946
1951
1956
1961
1966
1971
1976
1981
1986
1991
1996
2001
2006
Year
% o
f GD
P
AGRI, FISHERY & FORESTRY
INDUSTRY SECTOR Manufacturing
SERVICE SECTOR
Manufacturing as small as in
1950s
Agriculture smallest ever
18.5%
15.5%
1Q-3Q2009p
Chart 2: Exports of Goods and Services (Balance of Payments method), 2000-2008 and Jan-Sep 2009 (%)
8.010.0
2.4
10.6
4.6
18.3
11.9
(15.6)
(26.4)
(1.5)
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
2000
2001
2002
2003
2004
2005
20
06
2007
r/
2008
p/
Jan-S
ep 20
09 p/
Year
%
Chart 3: Net Foreign Direct Investment (FDI, Balance of Payments method), 2000-2008 and Jan-Sep 2009 (US$ million)
2,240
1,5421,269
1,854
688
491195
1,403
2,9162,921
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2000 2001 2002 2003 2004 2005 2006 2007 2008 Jan-Sep2009 p/
Year
US$
mill
ions
Chart 4: Monthly Overseas Filipino Remittance Growth, 2005-October 2009 (%, year-on-year)
37.2
30.0
6.7
0
5
10
15
20
25
30
35
40
Month
%
2008: 1.24 million deployedJan-Nov 2009: 1.29 million deployed
(3,845 per day)
Chart 5: Philippines Real Gross Domestic Product (GDP) Growth, 1999-2008 and 1st-3rd Quarter 2009 (%)
3.4
4.4
3.0
4.34.6
6.2
4.95.3
7.1
3.8
0.70.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1Q-3Q2009
Year
%
Chart 6: Real Gross Domestic Product (GDP) Growth Per Capita, 1999-2008 and 1st-3rd Quarter 2009 (%)
1.2
2.9
2.3
2.8
4.2
2.93.3
5.0
(0.3)
1.8
(1.2)(2.0)
(1.0)
0.0
1.0
2.0
3.0
4.0
5.0
6.0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1Q-3Q2009
Year
%
State of people’s welfare People’s welfare worsened –
Rising joblessness Growing poverty Aggravated by militarization & other
man-made disasters following natural disturbances
Record joblessness (unemployment rates) 2001-08 : 11.2% 2009 : ~11.0%
IBON’s Oct-09 national survey 71% of Filipinos
rate themselves as poor
~ 4.3 M unemployed 35.1 M employed, but poor quality work:
4.2 M “unpaid family workers” 12.2 M “own-account workers” Among “wage & salary workers”
~ 4.7 M “non-regular” (i.e., contractual, casual, probationary, apprentice, seasonal)
~ 11.7 M “no written contracts” (i.e., none, verbal contracts only)
1 out of 3 jobs (12.8 M) part-time work ~ 25.4-32.4 million25.4-32.4 million
jobless or in poor quality work
2009 (IBON estimates on NSO data): labor force ~ 39.4 million
Migration & underdevelopment Unprecedented dependence on
overseas work/remittances a sign of backwardness & underdevt
Limits of overseas work as economic lifeline being reached Adverse affects on welfare of OFWs
and families Creating greater problems for
economy as a whole
Chart 7: Overseas Filipino Worker (OFW) Deployment Growth, 1981-2008 and Jan-Nov 2009 (in %)
18.8
13.3
38.0 37.9
14.7
11.7
(30)
(20)
(10)
0
10
20
30
40
50
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Jan-
Nov
-09
Year
%
Chart: Overseas Remittances, 1980-2008 (US$ million, % of GDP)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Year
US$
mill
ion,
cur
rent
0
2
4
6
8
10
12
% o
f GDP
OFW remittances (US$ million)
As percentage of GDP (% )
1980-90:Slowly rising share of GDP
1990-2004:Rapidly growing
share of GDP
2004-2009:Flat (falling?) share of GDP
Renewed fiscal crisis Descent into fiscal crisis will
accelerate in 2010 – Drastic implications on social
services Portending greater tax burdens Leading to greater instability
Chart 8: National Government (NG) Deficit, 1999-2009e/2010e (PhP billion and % of GDP)
(210.7) (293.3) (390.3)
(5.4)
(3.8)
(4.9)
(450)
(400)
(350)
(300)
(250)
(200)
(150)
(100)
(50)
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Year
PhP
billi
on
(6.0)
(5.0)
(4.0)
(3.0)
(2.0)
(1.0)
0.0
PhP billion
% of GDP
644 B 746 BTotal debt service
Land and livelihoods Deepening rural poverty and
failure of agrarian reform National resurgence in peasant
struggles for land & livelihoods
Hacienda Luisita, Tarlac (Cojuangco-Aquino)
Hacienda Looc, Batangas (Fil-Estate/MSDC)
San Miguel, Bulacan (Villafuerte)
Fort Magsaysay, Nueva Ecija (7th ID, AFP)
San Miguel, Leyte (Veloso) Bago, Negros Occidental etc…
Predatory democracy 2010: country in most advanced
state of political crisis since Marcos dictatorship
GMA’s gambit Charter change untenable
for now, Arroyo efforts shifted to May 2010 elections and laying political groundwork for maneuvering under next admin
Political crisis to new and higher level if 2010 elections don’t achieve minimum of credibility – and especially if Arroyo clique resorts to more extreme measures
Elections and change “Change” an
underlying theme of elections out of extreme dissatisfaction with Arroyo government – but prospects under next administration limited at best (however elections play out)
Testing democracy Elections are
unique in seeing parliamentary Left again seeking to expand influence to the national level and engaging in coalition politics
Change beyond elections
Worsening crises has sharpened public desire for change + driven social/mass movements + revolutionary armed groups
Under current economic and political circumstances, cha-cha is change for the worse even in next administration
Key elements for 2010 optimism: Radical socioeconomic reforms, realizing democracy1. Improved level of political stability by
thwarting ruling Arroyo clique’s maneuvering to stay in power – clean, credible elections
2. Entry of progressives/pro-people candidates into national level politics
3. Reliable process of holding Arroyo clique accountable for transgressions
4. Momentum to democratization process – stop State-sponsored attacks
5. Solid repudiation of obsolete globalization policies causing such economic damage
Key elements for 2010 optimism: Radical socioeconomic reforms, realizing democracy6. Explicit strategy to build domestic
economy and reduce reliance on external sources of growth
7. More equitable distribution of economic gains to the direct producers
8. Addressing fiscal troubles in a pro-people manner
9. Increasing public spending on social services to improve welfare of crisis-battered population
111 Grassroots & people’s movements as building blocks of democracy
Salamat po