Explaining Aquinomics

Cielito Habito wrote a very good op-ed on the Inquirer today explaining what Aquinomics is— Aquino’s economic policy is.

“What defines “Aquinomics,” then? One description that comes to mind is “economics of business confidence,” as that has been the driver of the economy under Aquino’s leadership so far. Over the past four quarters, growth in private domestic investment has been consistently surging, based on the quarterly National Income Accounts. This investment surge comes after many years of relative stagnation. Cross-country data from the Asian Development Bank reveal that in 2002-2007, our annual growth in total investment—that is, putting public and private, and foreign and domestic investments together—averaged zero percent. In contrast, our neighbors posted positive investment growth ranging from 3 to 19 percent per year. For most of the past decade, then, our neighbors were leaving us behind in building even greater productive capacity in their respective economies.

What is remarkable about the investment growth we are seeing lately is that it comes in the face of a significant drop in foreign direct investments (FDI). Latest Bangko Sentral ng Pilipinas data report that actual net FDI inflows so far this year are 17 percent lower than in the same period last year, a steep drop by any standard. Similarly, latest data on foreign investment approvals by the different investment bodies taken together (namely the Board of Investments, Philippine Economic Zone Authority, Subic Bay Metropolitan Authority and Clark Development Corporation) report a 53 percent drop from last year. And yet, overall investment has jumped 37 percent, implying that domestic investments must have jumped by much more, far overcoming the foreign investment decline.”

Habito says, in a nutshell, Aquinomics is “economics of fiscal responsibility”.

 

Photo credit: Malacañang Photo Bureau

Cocoy Dayao

Cocoy is the Chief Technology Officer of Lab Rats Technica, a Digital Consulting company that specialises in DevOps, iOS, and Web Apps, E-Commerce sites, Cybersecurity and Social Media consulting. He is a technology enthusiast, political junkie and social observer who enjoys a good cup of coffee, comic books, and tweets as @cocoy on twitter.

Cocoy is also the Managing Director and Editor-in-Chief of the ProPinoy Project.

Cocoy considers himself to be Liberal.

  • Thai anton

    Aqquinomics is Freakonomics.

  • UP nn grad

    The Habito opus echoes the lack of clarity being put out by Malacanang.

    Cited is P2Billion in savings from public works projects without mentioning if the money has been returned to the Treasury, or if the spending is simply delayed (delayed is not the same as “savings” — especially if the contracts are written where Gobyerno incurs penalty-costs when a project is delayed).

  • UP nn grad

    I doubt that Noynoy can guide things so Pilipinas catches up with Thailand by 2016 — but it will be a crying shame if Thailand is even much ahead of Pilipinas when Noynoy leaves office. It will be a shame if, when 2016 arrives, Vietnam has gotten ahead of Pilipinas.

    I think a problem is Noynoy does not set targets for his immediate reports. I mean, Noynoy just appointed Executive Secretary Paquito Ochoa Jr. as chair of the Presidential Anti-Organized Crime Commission (PAOCC). Why not a simple target — like Ochoa to “hire” 50 more dogs for Pilipinas drug enforcement in the next 12 months. Won’t it be great if in 2012 SONA, Presi-Noynoy can point to his administration hiring 50 more dogs for Drug Enforcement? [ And maybe getting 10 more patrol boats — not destroyers or frigates, just regular 10-meter-or-longer patrol boats made of fiberglass-and-wood.]

    Then a real target — like cutting by 15% the number of kidnappings in Mindanao — now that would be a great target for Ochoa.