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[ANALYSIS] The economic lies in ‘Duterte Legacy’

 

The fake news never ends.

In a surprising, gratuitous, and premature move, the Duterte government recently launched “Duterte Legacy” – an information drive that showcases the administration’s purported gains so far.

The highlight of the launch, at least for me, is an infographic that features some statistics that supposedly paint a picture of progress in the past 3.5 years. The statistics cover areas like infrastructure, crime reduction, and economics.

In this article I want to zero in on the economic statistics in Duterte Legacy. Not only are most of them dubious and misleading, but they also hide the Duterte administration’s policy blunders that tended to bring the country backward rather than forward. 

Inflation record

Let’s start with the 0.8% inflation rate cited in Duterte Legacy, supposedly the “slowest pace since May 2016.”

Inflation, as I have explained a number of times before, refers to the pace by which prices rise over time. Low inflation is generally good: it basically means you can buy more with the same income you have.

Although an inflation of 0.8% sounds low, there are problems with this number as presented by the organizers of Duterte Legacy.

First, it’s unclear how they arrived at it. The infographic claims to be updated as of January 9, 2020, but the last time inflation clocked in at 0.8% inflation was in November 2019. In December 2019 – the latest month with available data – inflation actually inched up to 2.5%.

Second, and more to the point, 0.8% hides the fact that in 2018 we experienced some of the highest inflation rates in almost a decade (Figure 1). This was due to a number of factors – both domestic and international – but in large part attributable to the policies of the Duterte government.

Figure 1.

 

For instance, the 2017 TRAIN law hiked a number of excise taxes including those on petroleum products – at a time when world oil prices were soaring.

The near-depletion of subsidized rice beginning in late 2017 – owing to delayed imports – also led to sky-high rice prices.

Together, these ill-timed events – driven by ill-conceived policies by the Duterte government – stoked inflation and drove millions of Filipinos into needless hardship, according to a number of independent researchers. (READ: How the TRAIN law worsened poverty, inequality

Jobs record

Duterte Legacy also claimed that Build, Build, Build (BBB), the government’s flagship economic project, generated nearly 4.2 million jobs.

This statistic is implausible for a number of reasons.

As of October 2019, there were 4.22 million people employed in the construction industry. Does Duterte Legacy mean to say BBB created nearly as many construction jobs as there currently are?

At best we can say from the Labor Force Surveys there were 719,000 more construction jobs in October 2019 than in July 2016 when Duterte came into office.

But this figure includes both public and private construction jobs, and the total is merely 17% of the net jobs created by BBB as boasted by Duterte Legacy.

Duterte Legacy also touted a 4.5% unemployment rate, the “lowest since 2005.”

In a previous piece, I did mention that last October it wasn’t just unemployment that reached an all-time low, but also underemployment (which comprises those with jobs but who want to earn more income or work more hours).

Impressive as these rates are, they are more the continuation of a long-term decline that started more than a decade ago (Figure 2) – and hardly Duterte’s doing.

Figure 2.

 

I will concede that construction employment did pick up late last year. But you will remember that many BBB projects got stalled when Congress failed to pass the 2019 budget on time, mostly on account of politics. (READ: The pipe dream that is Build, Build, Build)

In other words, the jobs record could be a lot better had it not been for the failings of Duterte’s friends in Congress.

By the way, another infographic online, uploaded on the Duterte Legacy Facebook page, highlights instead the July 2018 unemployment rate of 5.4%, supposedly a record low.

This is a baffling choice, one that betrays the sloppiness of the propagandists behind Duterte Legacy: the latest available unemployment data point last October 2019 is more recent and impressive at just 4.5%.

Poverty record

Finally, Duterte Legacy boldly claimed that 5.9 million Filipinos were “lifted out of poverty.” 

This comes from the latest poverty statistics published by the Philippine Statistics Authority (PSA) last December. According to the PSA there were indeed nearly 6 million fewer poor Filipinos in 2018 than in 2015. The share of our poor population also dropped considerably over this period (Figure 3).

Figure 3.

 

But there’s a problem with how the statistic was framed.

First, it’s a bit of a stretch to say that the Duterte administration was responsible for most of poverty reduction over that period, if at all.

This is a perfect example of the “post hoc fallacy”: just because poverty reportedly dropped after Duterte came to office doesn’t mean he caused such poverty reduction.

Second, poverty is going down likely due of a confluence of policies, both past and present.

Most likely poverty reduction is finally catching up with higher growth trajectory our country has managed to achieve in the past two decades – a trend that started well before Duterte came to power. 

Third, Duterte Legacy hides the fact that some of Duterte’s policies have been unarguably anti-poor.

There’s a new study, for instance, suggesting that the government’s bloody war on drugs could be effectively negating a number of key social protection and anti-poverty programs – most notably 4Ps or Pantawid Pamilyang Pilipino Program. 

Debt of lies

We don’t have space here for other dubious claims in Duterte Legacy. 

But let’s not kid ourselves any further. Duterte’s real legacy – one that future generations will remember him for – is his war on drugs, which has, so far, killed at least 30,000 innocent victims, according to human rights groups. 

Next to that, perhaps Duterte’s other great legacy could be the extent by which his government perpetrated lies and disinformation at an unprecedented scale.

During Duterte’s term, purveyors of fake news were appointed to plum government posts, and Duterte’s mouth itself has been a veritable fount of lies. Duterte Legacy is just the latest episode of this state-funded disinformation drive. 

Ranking officials of the Duterte government will do well to know a memorable quote in HBO’s “Chernobyl” shown last year: “Every lie we tell incurs a debt to the truth. Sooner or later that debt is paid.”

When will Duterte and his minions pay their mounting debt of lies? – Rappler.com

 

The author is a PhD candidate at the UP School of Economics. His views are independent of the views of his affiliations. Follow JC on Twitter (@jcpunongbayan) and Usapang Econ (usapangecon.com).

JC Punongbayan

JC Punongbayan is a PhD candidate and teaching fellow at the UP School of Economics. His views are independent of the views of his affiliations.

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