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7.3% growth an illusion, not sustainable — Diokno By Aytch S. de la Cruz 05/30/2010

Sunday, May 30, 2010

7.3% growth an illusion, not sustainable — Diokno

By Aytch S. de la Cruz
The 7.3 percent growth in the first quarter that Malacañang has trumpeted as a “fitting legacy” on the final days of President Arroyo and attributed to her “effective” policies is a mirage and will not be sustainable, being the result of the low base effect from last year, election spending and the rush to complete Arroyo’s so-called state of the nation address (Sona) projects, former Budget Secretary Benjamin Diokno said.

“Adjusting for low base effects and election spending and the last minute rush to complete large scale projects, the economy probably grew by 3.6 percent rather than 7.3 percent,” Diokno said.

Diokno sees the supposed strong growth as a combination of the significant impact of election spending on some economic activities such as broadcasting media, which went up 31.4 percent during the period from 1.3 percent a year ago, and rental of office spaces that grew 10.9 percent from negative 4.6 percent.

He added the growth in manufacturing is largely base effects and also election induced. 

Growth in petroleum output is explained by the sharp decline in refining last year, he said. This soared to 65.9 percent from a negative 29 percent a year ago. 

Growth in electrical and office equipment can also be explained by higher demand due to the elections, he said.
In contrast, growth that should matter to most Filipinos such as in agricultural output was not realized during the period.

“The 7.3 percent growth in this sense is not sustainable. It is also unevenly distributed,” he said.

The strong growth has a negative impact on the poor, which are mostly in the agricultural and rural sectors. “Palay production shrunk by 11.4 percent, corn output was down 16.8 percent, and sugar production fell by 4.6 percent,” he said.

“What happened to those who rely on agriculture including their families? I expect unemployment, poverty and hunger will increase despite the strong growth. Isn’t that ironic?,” he added.... MORE  

  SourceThe Daily Tribune

URL: http://www.tribuneonline.org/headlines/20100530hed4.html


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