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Hallucinating in Manila

By Manila Times - 7 months ago

WAS it mushroom uppers? Fentanyl? Or some wonder drug that made one blissfully unhinged from the real world, one so new and potent and fresh off the drug labs that it is still out of the PDEA list?

Concerned citizens are asking those questions after a congressman vested with a halo of numeracy and economic sense (at least that is the general perception among colleagues in the talent-starved, IQ-deficient House of Representatives) dropped an improbable number: 14 percent. That, he claimed, would be the immediate rise in the gross domestic product (GDP) once the so-called restrictive provisions in the Constitution are amended and archived for good.

Was he in a state of drug-induced hallucination?

That big a GDP surge, even with trickle-down economics being questionable and called "bunk" by Pope Francis, will deliver tangible benefits to the impoverished, struggling masses below, in any country and in any economic setting. Let us count the 14 percent's would-be impact on the Philippine economy: a few thousand jobs above the slave-wage pay, tens of thousands of openings for food servers and supermarket baggers, more construction work, more janitorial work, additional jobs for criminology graduates who failed the police exams but are willing to work as security guards. Jobs created across all economic sectors that the 14-percent growth would induce. Other than the massive job generation, there are a thousand ways a 14-percent growth would have a positive imprint on the national economy. But the impact on job creation will stand out because this is precisely the kind of growth in which the gains are broadly shared and widely dispersed.

The achievement of a 14-percent GDP growth, given the polity's obsession with GDP growth, would, in fact, merit a celebration grander than Independence Day. The punditry will write endless commentariat-cum-hagiography. The president, who will preside over a 14-percent growth, will receive petitions to stay in office for life, and the national opposition to term extensions will vanish.

The only problem is a 14-percent growth, induced by a constitutional amendment, has no basis in the real world. If you look at our economic history, we are more likely to suffer from an epic meltdown, like that 9.5-percent contraction in 2020 (some said it was 10 percent or more), than post a 14-percent wondrous growth rate. Growth over the past several years has been built not on the back of an impressive industrial foundry but on two acronyms: OFWs and BPOs.

The only time in contemporary global history that a 14-percent growth was achieved by a major economy was in 2007 by China (the actual figure was 14.2 percent), at a time when China was the undisputed "factory to the world" and without rival in industrial and manufacturing prowess. It was the time young and exuberant workers made their way into the industrial heartlands from the rural areas to do their part in the making of the world's greatest industrial giant. It was the same year that economists across all continents were making bold predictions that in 10 years, or 2030 at the very least, China would overtake the sputtering, lethargic US as the biggest global economy. It was the time when much of the world was in awe of Jack Ma and his Alibaba.

Things soon started to settle down from that peak growth year. The average growth from 1979, the start of Deng's market reforms and the integration of China into the global economy, to 2018 was an impressive 9.5-percent growth. Still, it fell short of a double-digit rise.

Today, the US remains the biggest, a $27-trillion economy that posted the most impressive growth among the G7 economies last year, while China's growth has stalled, with an imploding real estate sector personified by Evergrande. India and Vietnam have been the prime destinations of Western tech giants relocating their production and assembly sites from China. The GDP of China barely squeaked by 5 percent last year, but even that figure is suspect to many foreign growth trackers.

And what specific areas of impressive growth would be the basis of that wondrous 14-percent growth? The congressman, probably still groggy from his purple haze, said, "Basta, amend the Constitution, and it will come."

I do not know what acting National Irrigation Administration (NIA) head Eduardo Guillen consumed, but he was either hallucinating or was in dreamland when he recently stated with real conviction that the country may achieve rice self-sufficiency by 2028, the end of President Marcos' term. Did he even take a cursory look at the basic data on rice economics?

At the close of 2023, the official data on rice imports for that year was 3.6 million metric tons (MT), which made us either the top or second rice importer in the world. That official figure excluded rice smuggled in via our porous borders. Since 2019, rice imports have averaged more than 3 million MT, even with the massive undervaluation, and occasional misdeclaration, at the ports of arrival. This year, rice imports are projected to be in the 3.8 million MT level.

The 20 million MT output for palay was just 1.5 percent higher than in 2022 and just 0.5 percent higher than in 2021. The small gains in palay production over the past several years have not even caught up with population growth.

President Marcos recently went to Vietnam to guarantee that within the next five years, Vietnam, which supplies about 80 percent of local rice imports, will continue supplying us with rice. The government of Mr. Marcos has also been securing rice supply deals with any country open to that proposition just to prevent embarrassing rounds of rice shortages. In China, the promise of President Xi Jinping to put China-produced rice "in every bowl" remains a wish list despite China's sophisticated agronomy.

How can an agriculture department presiding over a failed and broken institution overcome its incompetence and lethargy and reverse the endless cycle of massive rice imports in four short years? How, Mr. Guillen?

Mr. Guillen now joins the growing list of incumbent government officials telling improbable stories about rice-related miracles, from the possibility of rice being retailed at P20 per kilogram at some future date to miracle palay production and the undying yarn that we will join the short list of rice-exporting countries soon enough.

The "worst are full of passionate intensity," says a line from Yeats' "The Second Coming." Fueled by intakes that cause the mind to hallucinate and spin improbably tales.

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