There were a number of positive economic stories in the Philippines recently as reported in BusinessWorld: “AMRO sees PHL as fastest-growing economy in the region” (Oct. 5), “Marcos removes cap on rice prices” (Oct. 5), “Philippine manufacturing output peaks in August” (Oct. 6), “Jobless rate dips to 3-month low in August” (Oct. 6), “NAIA 9-month passenger traffic surpasses 2022 full-year tally” (Oct. 8), “‘Much better’ growth seen in 2nd half” (Oct. 9), “IMF still sees PHL as one of region’s strongest economies this year” (Oct. 11), “FDI net inflows jump to 3-month high in July” (Oct. 11).
So, despite the Philippines’ slowing GDP growth and high inflation rates in the second and third quarters of 2023, the unemployment rate went down to 4.4% in August. Then the manufacturing purchasing managers’ index (PMI) stayed above 50. The PMI is an indicator of whether market conditions are expanding, staying the same, or contracting as viewed by purchasing managers.
I checked the data for the ASEAN-5 on unemployment rates and manufacturing PMI over the last three years. All five countries — Indonesia, Malaysia, the Philippines, Thailand, and Vietnam — showed declining unemployment, which is good. But when looking at the manufacturing PMI, only Indonesia and the Philippines had an index above 50 as of September. The other three countries have seen declining PMI, below 50, especially Thailand and Malaysia (see Table 1).
Congrats to the economic team, particularly Secretaries Benjamin Diokno of the Finance department, Amenah Pangandaman of the Budget and Management department, and Arsenio Balisacan of the National Economic and Development Authority, for leading the positive business outlook of the country.
THOLOS FORUM 2023Meanwhile, the Tholos Foundation in the US will hold the Tholos Forum 2023 with the theme, “Coalitions, Freedom, Innovation” on Oct. 16 to 18 in Nice, France. Among the topics to be discussed in the conference are digital taxes, harm reduction, the international property rights index (IPRI), climate and energy, US and Germany politics, and country updates from international participants. This writer is one of Tholos International Fellows.
Results of IPRI 2023, which was launched by the Property Rights Alliance (PRA, Washington DC) in late September, will be presented again by Lorenzo Montanari, Executive Director of PRA.
The IPRI is a composite of three sub-indices: legal and political (LP) environment, physical property, and intellectual property protection. Basic data for LP to derive the index come from the World Justice Project and the World Bank’s World Governance Indicators. The Philippines showed a deterioration in its global ranking, from 70th in 2018 to 85th in 2023, pulled down by a low score in LP due to a poor performance in the rule of law and political stability — and/or other countries simply improved (see Table 2).
My suspicion on why the Philippines and other ASEAN countries have low overall scores is that the World Bank’s data on world governance is itself tainted. Nonetheless, various economic and business indicators, like those in Table 1, point to the Philippines having an improving overall business environment.
I will write more about the Tholos Forum next week.
Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers