Bro. Erle Frayne D. Argonza
[Writ 11 April 2008, Quezon City, MetroManila]
Most recently, Philippine economic growth reached impressive levels of 7.3% GDP and 8.4% GNP. GNP is measured by adding the Net Factor Income from Abroad or NFIA, comprising largely of remittances from overseas workers and overseas investments. There is surely cause for elation over these developments.
How far has Philippine development progressed? Quite far, to say the least. In 1946, when the USA granted independence on this ‘far-east’ colony, the Philippines was a backward, agrarian economy that was dependent on manufacturing imports to move on. It was also coming out of its war-torn phase, and had to embark on an ambitious recovery program first as part of its development program.
Today that post-colonial past is now a distant epoch of a long by-gone time. The work-force is dominated by the services sector which also contributes to 55% of the GDP, while industry contributes 30% more or less though a measly 16% of the work-force. Agriculture itself had quite modernized, though it now contributes to just around 15% of GDP and 36% of the work-force.
Urban population had already surpassed the 55% mark by the middle of this decades and is still surging ahead as urbanization makes radical, sweeping changes over vast expanses of rural villages and small towns. Manila, the primate city, is as huge as a mega-polis, contributes 1/3 to the national output and is now a highly reputable 1st World city. Philippine investments have been moving out of the country as part of wealth production overseas, aside from overseas labor, and in long run remittances from investments will exceed those from manpower. The domestic banking sector is so awash with cash, that it can fund the most ambitious development projects conceivable, thus cutting off RP’s dependence on foreign debts.
But RP still has a long way to go before reaching a 1st World status. Using the industry cycle—where an industry progresses from ‘take-off’, to ‘growth’ stage, then to ‘maturity’ stage, then to ‘overdeveloped’ or ‘decay’ stage—experts can easily assess that RP is already at the tail end of the ‘growth stage’. It took so long a time for this to happen, as this stage began in the 1970s yet. The ‘take-off’stage likewise took so long a time to conclude, as it started in 1948 yet, more or less, got bogged down for some time in the 1960s, before moving on to the next phase during the technocratic-militaristic order of the 1970s.
But RP had already moved forward, this had to be recognized most of all. It is now a 2nd World economy, still an ‘emerging market’ though already no longer the backward/agrarian ‘carabao economy’ that it used to be, and no longer rural but predominantly urban. And this news is sufficient cause for euphoric jubilation.
If only the late economist & sociologist Joseph Schumpeter were still alive today, the Philippine experience would make him happy. RP authenticates well his theory of cycles, particularly the long-wave Kondratieff cycle. This cycle contends that long-period growth takes place over a period of 55-60 years, with expansion at the beginning half and contraction at the last half.
RP began its ‘take-off’ in 1946 (alongside the war recovery), and the long-cycle period officially ended in December 2006. Using this theory then, I forecast as early as 1999 yet that RP will experience another period of long-term growth beginning in 2007, and I hit the mark so precisely that I am sure the theory of cycles is as valid as ever. Discounting aside the possible effects of external shocks that we have no control over, our long-term expansion will be till 2036.
Which means that RP will reach ‘maturity’ very soon, around 2015, and then attain ‘over-developed’ or 1st world status by the period 2025-2030. No matter how slow the carabao (water buffalo) may work, it will still deliver results. And RP, which is justly signified by the carabao, had demonstrated this to the world.