GDP growth is not a sign of improvement in the condition of the people

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The Ibon Foundation scoffed at the Marcos regime’s boast that the gross domestic product or GDP grew by 5.7% for the first quarter of 2024. This is not a sign of improvement in the condition of the people because it did not create new jobs, according to group. The regime’s economic officials tout the GDP “growth” as “the fastest in the region” and “a source of optimism and pride.”

The truth is, this GDP is lower compared to previous years. In fact, it is reverting to its previous downward slide before the Covid-19 pandemic hit, according to Ibon. The current GDP rate is lower compared to 8.1% in 2022 as well as to the 6.4% in the first quarter 2023. Worse, this year’s growth has been accompanied by shrinking employment, compared to the last quarters of 2023 and 2022.

The Ibon Foundation says the number of employed Filipinos fell by 1.3 million from the last quarter of 2023. This does not include the large section or 40% who are openly working in the informal economy, and an additional 16-18 million workers who are in unregulated informal establishments.

“Slow economic growth and job creation are rooted in weak economic foundations,” according to Ibon. The local manufacturing sector was at its weakest in the past 75 years at the beginning of the year, and the share of agriculture in GDP was the smallest during the same period, it said. Even the service sector, which accounts for the largest share of the country’s employment, shrank.

“This shows that the over-dependence of the economy on services is unsustainable,” according to Ibon.

The slowdown in economic growth can also be seen in the weak spending of Filipino families due to steep rising prices and their stagnant wages and income, he said. The 6.4% household final consumption expenditure (HFCE) in the first quarter of 2023 is higher than the 4.5% in the first quarter of 2024.

“The low income of Filipino families clearly cannot keep up with the high cost of living,” it said. On average, the daily minimum wage in the country is only ₱441, or 1/3 of the average living wage of ₱1,208 for a family of five, according to the group.

AB: GDP growth is not a sign of improvement in the condition of the people