Philippine Quarterly GDP Growth Dashboard: 1Q 2004 to 1Q 2007

Putting the NSCB's time series data in a graph can help give a clearer picture of the sources of GDP growth during the past thirteen quarters. Using the Expenditure approach, GDP is computed as the sum of Personal Consumption Expenditure (pce), Government Consumption (gc), capital formation (cf) and exports (x) less imports(m). Using the following color codes to assign the quality of growth as follows...


...we can more readily see where the sources of gdp growth for a given quarter is coming from:
GDP Growth: Expenditure Approach (click on image to enlarge)
The above shows that the exceptional (by Philippine standards) growth for the first and second quarters of 2004 was a result of doing well on all categories (especially personal consumption). In comparison, the recently reported 6.9 percent growth is due mostly to government expenditure and a drop in imports (which resulted in a better trade balance). Since government cannot go on spending beyond its means and since imports cannot drop without affecting over-all economic activity (unless replaced with local substitutes), it is clear that we have to do better in the other categories if we are to sustain the pace of economic growth.

Here's another perspective, i.e. in terms of growth per sector...


We can only hope that the 9.1 percent services growth is not a one off spike due to election-related spending and that industry growth will not slow down due to the drop in imports.

Update July-02-07 11:00pm: Yesterday's edition of the Inquirer.net has former Socioeconomic Planning Secretary & National Economic and Development Authority (NEDA) Director-General citing the analysis of his fellow former NEDA Director-General Felipe Medalla that...

" puts to question the very claim that the economy's recent growth has never been better in the last 17 years".

Medalla's analysis, while similar to mine, goes further. He also picks up on the observed slow down in imports that i mentioned above. Specifically, Habito states that...

"In essence, Medalla observes that the recent growth rates of GDP and GNP are made higher by the fact that import growth rates have been much slower than they had been before."

The two candidate factors being considered to account for this lack of import growth are (1) a greater degree of import substitution during the Arroyo years compared to FVR's time, and (2) "the increased dominance of the Services Sector" (which is not as dependent on imports) in the Economy. To clarify this matter, Habito says that the concerned statistical agencies have to go ahead with their...

"planned and long-overdue comprehensive review of their methodologies."

A third possibility which Boo Chanco points out is Peter Wallace's claim that...

"maybe the numbers are mistaking smuggled inputs and goods as domestic...[which] sounds plausible given that there has been no marked increase in domestic productive capacity in recent years."

Of the three possibilities, the third one seems to be in keeping with what we know about the present state of our society so if i were a betting person, i'd place my money on increased smuggling distorting the GDP statistics. Of course, definite conclusions have to await the arrival of credible data which in turn awaits the departure of Gloria Arroyo's confidence-men.

Update Sep-03-2007: Here is an updated dashboard which includes the 2nd Quarter 2007 figures.

*Very Good means that growth rate for a given period is greater than the median growth rate for the periods considered by equal or more than one standard deviation.
**Good means that the growth rate for a given period is equal or greater than the median growth rate for the periods considered.
***Poor means that the growth rate for a given period is less than the median growth rate for the periods considered.
****Very Poor means that growth rate for a given period is less than or equal to one standard deviation below the median growth rate for the periods considered.
*****x-m is exports 'x' less imports 'm' which gives the trade balance for the given quarter.

69 (The Sweet Escape)

Three reasons for embedding the above video:
1. It seems in line with my previous post concerning the 6.9 percent GDP growth rate for the first quarter.
2. The accompanying background music is something i kept hearing on the radio while i was in Europe a few weeks back.
3. It serves as a good lead-in to one of my youtube favorites who posted this funny response to the above.

First Quarter 2007 GDP Growth: Why so Special?

I find the excitement accompanying the recently reported 6.9% year on year GDP growth (for example in blog entries here and here and in this comment here) a bit puzzling. Yes i know it's good news, but what i find odd is the claim that such growth is unprecedented, for example, as reported in the Financial Times article linked above:

"Government economists said the country’s gross domestic product rose by 6.9 per cent from the same quarter last year, the highest rate since 1990 [emphasis mine]..."

One look at the NSCB Statistics (i.e. the 'Time Series' data) shows that we've had better performance as recently as three years ago, i.e. the first and second quarters of 2004 with 7.15% and 7.1% GDP growth respectively (as visualized in the bar graph below).
Year on Year GDP Growth Rate[Source: NSCB]
Unless my understanding is wrong, the above quote should then read:

...the country’s gross domestic product rose by 6.9 per cent from the same quarter last year, the highest rate since 2004...

Any clarifications (from government economists or otherwise) would be greatly appreciated.

Update 1:30pm: Dave Llorito pointed out that the First Quarter GDP growth rate is 6.4% and Second Quarter GDP growth rate is 6.2% for the period 2003 to 2004. This is as reported in the NSCB's press releases here and here. Taking the underlying values from the press releases for First and Second Quarters of 2004 and comparing them to the GDP data populating the Time Series referred to above, the discrepancy can be traced to the difference in reported GDP values as follows:


It would seem that at some point after the original 6.4 and 6.2 percent GDP growth figures were published, a revision to the GDP figures for these quarters was made. By contrast, there is as yet no discrepancy between the GDP figures in the NSCB Press Release and the time series data for both the First Quarter 2006 and 2007. If this is the case, it's still odd that the government economists still use the old data for purposes of comparison. Perhaps i'm still missing something so any explanations on this practice are most welcome.

Update 01-15-2008: Over at Dani Rodrik, economist Arvind Subramanian raises similar questions concerning revisions in GDP Data of other countries.

Lakbayan

My Lakbayan grade is C-

How much of the Philippines have you visited? Find out at Lakbayan!

Created by Eugene Villar.

Musa Dimasidsing: Political Involvement, Maguindanao and the Human Development Index

Kudos to Nick for his efforts in making sure we remember Musa Dimasidsing and his sacrifice. Back in 2005, in a discussion over at mlq3's, i commented that apathy is not exactly a bad thing:

As stated in [Albert] Hirschman’s Exit, Voice & Loyalty on the finding that “citizens do not normally use more than a fraction of their political resources…a degree of apathy was found to have some compensating advantages in as much as it contributes to the stability and flexibility of a political system and provides for ‘reserves’ of political resources which can be thrown into battle in crisis situations.”

It’s of course an ongoing debate whether Filipinos are taking this political slack too far in one direction, but we as a people have shown ourselves to be instinctively pragmatic. That we don’t take it upon ourselves to send even those who are deemed deserving to hell may be good or bad depending a given situation but it’s certainly not a national trait to be ashamed of [emphasis added].

Where i find middle class apathy inexcusable and shortsighted is in its acceptance of inequality. Whatever empathy we manage to express could be better put to use in trying to figure out how Maguindanao HDI’s (which is about 50 ‘countries’* down in ranking compared to Manila) can be improved.

Since writing the above, subsequent events have led me to the conclusion that we Filipinos *do* allow for too much political slack (i.e. apathy) whether it's because of too much stoicism or because we simply don't care enough to get involved. We have to leave it to a resident of our poorest province to step up to the plate. Next to Musa Dimasidsing's example, i guess we really do need to be ashamed.

*In that thread, Manolo Quezon pointed out that among the Philippine provinces, Maguindanao is the lowest ranked in terms of the Human Development Indicators (HDI), with a score comparable to Zimbabwe's.

Senator Trillanes

Congratulations to Senator-elect Antonio Trillanes. The people have invested a lot of hope in you so i'm also hoping that you do not disappoint. (Time to <--retire this pic.) If the headline below is true, then you're off to a good start:

Source:inquirer.net

Norah Jones - Those Sweet Words

Steve Gilliard Jr. 1964-2007

I'm saddened to find out that Steve Gilliard, one of the bloggers whose site i used to visit frequently has passed away. Prior to his hospital confinement, his blogsite was one of those i frequently visited especially for his military and historical analysis related to the US invasion of Iraq (his old blogspot entries can still be accessed here). He was also a proud liberal (in the American context) and one of his legacies is this piece (via Main St. USA):


I Am A Fighting Liberal by Steve Gilliard Jr

You know, I've studied history, I've read about America and you know something, if it weren't for liberals, we'd be living in a dark, evil country, far worse than anything Bush could conjure up. A world where children were told to piss on the side of the road because they weren't fit to pee in a white outhouse, where women had to get back alley abortions and where rape was a joke, unless the alleged criminal was black, whereupon he was hung from a tree and castrated.

What has conservatism given America? A stable social order? A peaceful homelife? Respect for law and order? No. Hell, no. It hasn't given us anything we didn't have and it wants to take away our freedoms.

The Founding Fathers, as flawed as they were, slaveowners and pornographers, smugglers and terrorists, understood one thing, a man's path to God needed no help from the state. Is the religion of these conservatives so fragile that they need the state to prop it up, to tell us how to pray and think? Is that what they stand for? Is that their America?

Conservatism plays on fear and thrives on lies and dishonesty. I grew up with honest, decent conservatives and those people have been replaced by the party of greed. It is one thing to want less government interference and smaller, fiscally responsible government. It is another thing entirely to be a corporate whore, selling out to the highest bidder because the CEO fattens your campaign chest. They are building an America which cannot be sustained. One based on the benefit of the few at the cost of the many. The indifferent boss who hires too few people and works them to death or until they break down sick. Cheap labor capitalism has replaced common sense. "Globalism" which is really guise for exploitation, replaced fair trade, which is nothing like fair for the trapped semi-slaves of the maquliadoras. In the Texas border towns, hundreds of these women have been used as sex slaves and then apparently killed,the FBI powerless to do anything as the criminals sit in Mexico untouched by law.

For the better part of a decade, the conservatives made liberal a dirty word. Well, it isn't. It represents the best and most noble nature of what America stands for: equitable government services, old age pensions, health care, education, fair trials and humane imprisonment. It is the heart and soul of what made American different and better than other countries. Not only an escape from oppression, but the opportunity to thrive in land free of tradition and the repression that can bring. We offered a democracy which didn't enshrine the rich and made them feel they had an obligation to their workers.

Bush and the people around him disdain that. They think, by accident of birth and circumstance, they were meant to rule the world and those who did not agree would suffer.

Liberal does not and has not meant weak until the conservatives said it did. Was Martin Luther King weak? Bobby Kennedy? Gene McCarthy? It was the liberals who remade this country and ended legal segregation and legal sexism. Not the conservatives, who wanted to hold on to the old ways.

It's time to regain the sprit of FDR and Truman and the people around them. People who believed in the public good over private gain. It is time to stop apologizing for being a liberal and be proud to fight for your beliefs. No more shying away or being defined by other people. Liberals believe in a strong defense and punishment for crime. But not preemption and pointless jail sentences. We believe no American should be turned away from a hospital because they are too poor or lack a proper legal defense. We believe that people should make enough from one job to live on, to spend time on raising their family. We believe that individuals and not the state should dictate who gets married and why. The best way to defend marriage is to expand, not restrict it.

It was the liberals who opposed the Nazis while the conservatives were plotting to get their brown shirts or fund Hitler. It was the liberals who warned about Spain and fought there, who joined the RAF to fight the Germans, who brought democracy to Germany and Japan. Let us not forget it was the conservatives who opposed defending America until the Germans sank our ships. They would have done nothing as Britain came under Nazi control. It was they who supported Joe McCarthy and his baseless, drink fueled claims.

Without liberals, there would be no modern America, just a Nazi sattlelite state. Liberals weak on defense? Liberals created America's defense. The conservatives only need vets at election time.

It is time to stop looking for an accomodation with the right. They want none for us. They want to win, at any price. So, you have a choice: be a fighting liberal or sit quietly. I know what I am, what are you?

To Jen and Steve's family, my condolences. - Chuck

Political CompassTM: Economic -3.25, Social -3.13

During my recent visit to Anna de Brux, one of the questions she asked me was whether i was a Socialist. Although anyone who has read my comments or blog posts would immediately understand that i'm left of center, i honestly did not think my set of beliefs would qualify me as one. (Others have labeled me a Stealth Communist, which has a nice ring to it but is nevertheless an inaccurate characterization.)

Fortunately, Dani Rodrik has a timely pointer to the Political Compass^TM site which has a test that helps to locate your ideological coordinates. The x-axis (left/right) shows where you are in the economic spectrum while the y-axis (authoritarian/libertarian) represents your place in the social dimension. My scores are -3.25 (x-axis) and -3.13 (y-axis) respectively which, as shown in the graph, brings me in the neighborhood of Gandhi.*

Of course, this wasn't always the case. Although, i have always been anti-Fascist, i started out in my teens as a free-market capitalist (from watching Milton Friedman's Free to Choose TV show back in the 80's) and then became a Reaganite supply sider (from reading George Gilder's Wealth and Poverty). My ideological journey leftward has taken decades and is something that i did not plan or expect. Who knows what will happen in the future?

Update 06-25-07: Just stumbled upon Torn's Political Compass score (from way back August 2004).

Update 11-21-07: As a response to Anna's invitation, i took the test again and this time my score was -4.25 (for the left/right economic spectrum) & -3.03 (for the authoritarian/libertarian political spectrum). After 5 months, it appears i've become a little more socialist and a tiny bit less democratic.

*Since i did not have the raw scores of the above historical figures, i had to manually scale the graph so my location relative to Gandhi may not be that precise.

Xenophobia in the Land of OFW's?

Also making a comeback in the local blogosphere is the topic of foreigner access to local professions courtesy of Torn & Frayed's post. When i blogged about this topic a few months back, it was in the context of admitting foreign doctors to support our local healthcare needs. At that time, my discussion over at mlq3's blog was mostly with fellow commenter Justice League. It was clear that his initial reaction at that time was from the gut, and is worth quoting in full:

"Regarding Cuban doctors for the Philippines; I can’t put my finger on it but it reads so bad.

I watched the movie “Milan”. I read a comment about the movie somewhere in the net that Filipinos were working as domestic helpers in Italy so the Italians can leave their country to work as domestic helpers elsewhere. I don’t know if that’s true but I’m reminded of that in this issue.

There are actually more than a hundred Indian and Pakistani physicians waiting in the wings for acceptance to practice Medicine here in the Philippines. One of the problems (and I guess there are many) is that there is no reciprocity. If it is to be allowed for one profession (without reciprocity as in not allowing our professionals to work the same in their country) shouldn’t it be allowed for all?

The government is currently thrusting the program of “Medical Tourism” wherein a package of “health” and recreation are being offered to “rich” foreigners.

It is a joint project of at least 2 government departments and aims to get a “slice” of the pie being enjoyed by other SEA countries. It is sold on the idea that it is still cheaper to have medical/surgical workups/management done overseas than in their own countries. In many instances, the foreigners health coverage covers their hospitalization. There is also the benefit of not being on a long queue in their own country. With a recreation tour to boot.

So in a sense the Filipino government is gearing a health care system to be delivered by Filipino doctors to “rich foreigners” while the government is being advocated/or advocates foreign doctors to treat the “non-rich Filipino patients”.

It seems embarassing for Filipino doctors and unfair to both Foreign doctors (esp. if we will ask Cuba for humanitarian assistance for their doctors) and non-rich Filipino patients.

Like I stated, I can’t definitely put my finger on it but it reads so bad!" - Justice League March 5th, 2007, 9:26 pm

Unfortunately, the subsequent discussion was sidelined by matters of law so the topic shifted away from the merits/demerits of the idea itself. It's a pity because it would have been good to get to the bottom of his visceral and (imho) illogical reaction. The emotional part of the reaction is in itself not bad as it could be a sign of some deeper logic but at the moment it remains unexplained.

This type of reaction is not an isolated case since i got more or less the same from Resty Odon last year in his Expectorants blog, although in a post one year later, he eventually acknowledged that hiring Indian doctors may indeed be an inspired (though still ridiculous-sounding) idea.

One valid objection is that inward foreign labor will take jobs away from the locals which is the line of reasoning that fellow commenter Fencesitter told me last year.

"cvj, with all due respect, how can we possibly encourage inward labor from neighboring countries if this country is bereft of respectable job opportunities, which is the reason why most of our countrymen are going abroad." - Fencesitter at January 26th, 2006, 12:38 pm

I responded that the matching of jobs should be at the sectoral level and is a decision that should be made by individual organizations and not at the level of legislation.

"fencesitter, the countries where Filipino OFW’s work in do not have zero unemployment but we are still hired because we are needed. Back home, there is unemployment, but there are also labor shortages in specific sectors. It’s a matter of matching required experience and skills versus available supply, and in this case, the relevant unit for making decisions is at the institutional level, be it a for-profit businesses, quasi-public or public sector organizations.

With India, a real case can be made for synergy between IT talents of both countries. In my work, we’ve brought in specialists from India and in turn i’ve also been assigned to India to do work there as well. In case of China, we can benefit from the infusion of entrepreneurial spirit and closer commercial links with China. We know form our own experience that those who uproot themselves usually do so to actively seek a better life. Having more motivated people working in our islands will have a beneficial knock on effect to the entire system. In the near future, when we become a stable democracy, we will be a destination of choice by the Chinese and other Asian nationals who would seek to escape the restrictions of the mainland.

Among the qualities that the Filipino should cultivate, i hope that xenophobia won’t be one of them. Considering 10% of us are living as guests in some other host country, that would be way too ironic."- cvj at January 26th, 2006, 10:39 pm

As i stated in my last paragraph above, i hope that objections to foreign labor has more to do with a simple misunderstanding of what is truly in our interest as far as matters concerning supply of labor is concerned, rather than an underlying xenophobia among us Pinoys. As Torn has commented along the same lines:

"the world’s largest exporter of labor might want to consider practicing a little reciprocity—for reasons of self interest, if nothing else" - Torn at June 5th, 2007, 8:10 am

Update 06-06-2007 6:19pm: Justice League has posted his response in the comments section as well as over at mlq3's. I accept that his position is indeed logical if his conception of fairness would be used as a framework. However, fairness at the expense of availability of medical care still seems too high a price to pay.

Manolo Quezon's Language Wars (Part 2)

Over at mlq3's, the ongoing debate between English vs. Pilipino as a medium of instruction has resumed. It's interesting to hear the points put forward by both sides, especially DJB (who seems to have backed off a bit from his "We are not Asians the way the ASEAN nations are. We are Little Brown Americans!" declaration and has reclassified us Filipinos to the less disgusting sounding "We are already English-speaking Asiatics. Our culture is Chinese-Malay-Spanish-American. "), Inidoro ni Emille (who i wish would take on a less derivative and more respectable handle worthy of his stature in the blogging world) and especially freewheel, who as a Cebuano (well versed in Sugbuaunon, Hiligaynon at Dabawenyo variants of the Visayan language), makes a compelling anecdotal case for the use of Pilipino.

Aside from the discussions, this thread is worth linking to for its pointers to various studies like the one Baycas referred to i.e.,

"Evaluation of the effects of medium of instruction on the science learning of Hong Kong secondary students: Performance on the science achievement test, Bilingual Research Journal, Summer 2003 by Yip, Din Yan, Tsang, Wing Kwong, Cheung, Sin Pui."

and the one cited by Inidoro i.e.,

"Mathematical Thinking and Learning
2001, Vol. 3, No. 2&3, Pages 201-220
(doi:10.1207/S15327833MTL0302&3_04)".

Another article worth mentioning is the one linked to by Manolo in his subsequent post i.e., Master English–but don’t neglect local languages article by the Business Mirror which cites a 1998 study by the ADB which concludes that:

"The research by the World Bank and the Asian Development Bank (WB-ADB) in 1998 showed that the use of the mother tongue in the first years of school provides the necessary “bridge” for a child to learn a second language.

The WB-ADB study verified that children are less likely to drop out of school when classes are conducted in the home language. Pupils are active, not passive, in class recitation—and conceptualization, especially in mathematics, begins almost from the first day of school."

Brussels, 2007

Took a break from posting last week because of work and my travel to Europe. Last Saturday, i met up with fellow blogger Hillblogger and her husband. After a delicious and filling dinner featuring her husband's roasted lamb and potatoes, we went around the city and saw the Grand Place, which i consider one of the most spectacular looking town squares in Europe and is on the list of UNESCO's World Heritage Sites.

The picture above shows the reclining statue of Everard 't Serclaes, an honored citizen of Brussels from the late Middle Ages. (Rubbing the statue is supposed to bring good luck which accounts for my hand on the statue.)

A few meters from the main square is the world famous Manneken Pis and i was surprised to find that the statue is smaller than it looks from the standard photos.

Among the Brussels (and Belgium)-related facts i learned from Anna and her husband are:

• Belgium is the most heavily wooded among the Western European states, with 40 percent of the area covered by trees.
  
• Thirty percent of Brussel's population is made up of expats working for (and with) the European Union.
  
• Belgium as a State came into existence in the early 19th century as a neutral buffer state between the French and the Germans. History shows that, unlike in the case of the Swiss, this arrangement has not worked in their favor.
  
• Throughout its existence, much of Brussels has been periodically flattened by war (the latest being World War II) which accounts for the relatively young age of its structures as compared with the rest of Europe.
  
• A lot of the older structures have nevertheless been torn down to make way for the EU offices in a manner that would make our Manila mayors happy.
  
• Near the center of Brussels, you can find a statue of Spanish literary characters Don Quixote and Sancho Panza, which may not be all that suprising considering that the area was once under the Spanish Crown. Anna also believes that these characters reflect the disposition of the Belgian people.
  
• The Members of the European Parliament keep their papers in boxes ready for shipping to and from Strasbourg in France, which is the other place where they hold sessions. This less than optimal arrangement is a concession to EU politics.
  

I'm glad to have had the chance to finally meet Anna in person after two years of exchanges in the Blogosphere.