(Part 3)
This piece will cover three topics, so we go straight to them.
First is the growth of the top 40 largest economies.
Here is an update in GDP growth for Q1-Q3 of 2023, taking off from part 2 of this series, “Stabilizing growth of the fastest growing major economy in the world” (Nov. 14). I looked at the top 40 largest countries in terms of GDP size in 2022 at purchasing power parity (PPP) values. Four countries were not included in my analysis — Pakistan and Bangladesh (there is no quarterly data), and the United Arab Emirates and Egypt (which released Q1 data only). So I looked at 36 economies.
The Philippines, with 5.6% growth in Q1-Q3, is now the second-fastest growing economy in the top 40 largest economies in the world next to India. The economies which are contracting are Ireland, Sweden, Germany, and Poland (see Table 1).
Again, kudos to this administration’s economic team, the entrepreneurs and workers of the country, and overseas Filipino workers who kept working despite a worsening global economic environment, despite the negativism and brickbats of the naysayers.
BARMM INCOME AND THE MARAWI BOMBINGThe poorest region in the country in terms of gross regional domestic product (GRDP) is the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM). Last Sunday, Dec. 3, a morning mass was bombed at the Mindanao State University (MSU) gym and four young people were killed and 50 others injured. The photos I saw were gruesome. I felt bad and weak because I kept writing about economic growth in this column and we see heinous crimes and killing like this which have outright negative impact on investor and consumer confidence.
Budget Secretary Amenah F. Pangandaman, whose family comes from Marawi City and who had just returned from a trip to South Korea that morning, immediately made this statement:
“As Chairperson for the National Government of the Inter-governmental Relations Board with the BARMM, this is a great setback to our efforts for lasting peace. As a daughter of Mindanao, it breaks my heart to see my hometown of Marawi as the setting of the explosion. I extend my heartfelt condolences to the families of the victims of the bombing. Rest assured I will be working very hard with the corresponding officials — both from the National Government and BARMM — to ensure peace and security especially in this area of Mindanao is restored.”
I send my condolences to the families of the dead. I still feel weak remembering the photos of the victims. And I feel deep anger at the perpetrators of the crime. Marawi City has not recovered yet from 2017’s “flatten the city”-all-out war between the Islamic militants and the Duterte administration.
The BARMM regional GDP of P280 billion in 2022 is even lower than the regional income of the Cordillera Administrative Region (CAR). Compared to the income of the top four largest regions, it makes only 1/22 of what the National Capital Region (NCR) has, 1/10 of Cavite-Laguna-Batangas-Rizal-Quezon (Calabarzon), 1/8 of Central Luzon, and 1/6 of Central Visayas (see Table 2).
The BARMM in general, and Lanao del Sur including Marawi City in particular, need more peace and order to attract more investors and job creators. With such a low regional economic base, sustained annual growth of 8% or higher is possible — provided that peace and order prevail, the perpetrators of the Marawi bombing are caught, and potential troublemakers in the region are convinced to drop whatever evil plans they have.
EARTHQUAKES AND FREE TRADE IN CONSTRUCTION MATERIALSAlso in Mindanao, a strong earthquake hit last Saturday, killing four people and injuring many others.
The Philippines experiences an average of about 30 earthquakes every day, 365 days a year, although we do not feel most of them and only instruments can detect them because they are weak (intensity 3 or lower), are very brief, or they occur under the sea. Last Sunday alone, the US Geological Survey listed 83 earthquakes in the Philippines with magnitudes of 4.5 to 6.9. If earthquakes with magnitudes of 4.4 or weaker were counted, there may have been 200+ that day alone.
With this high frequency of earth movement in the Philippines, people should build strong houses, buildings, and gyms. People should not scrimp in the use of steel because prices are high. Major construction materials like steel and cement should be cheap, not expensive, through more domestic production plus the abolition or the drastic reduction of import tariffs and other taxes.
Free trade in construction materials is pro-business and pro-poor. Cement and steel protectionism is fatal. Saving more lives and properties should prevail over protectionist corporate and political interests.
See also previous pieces in this column on cement free trade: “Cement tariff and the consumers” (Jan. 31, 2022), and “Inflation, cement importation, and electricity concerns” (June 13, 2022).
Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers.