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Thursday, January 13, 2011


Erle Frayne D. Argonza

Let me continue with the reflections on my beloved Philippines’ economy. This effort is often part of my self-accepted duties to update myself and my compatriots about the state of the Philippine economy at the start of every year.

Just a week ago, I came across an article writ by one of the stock market columnists in the Philippine Daily Inquirer of PDI, that re-echoed an emerging perception in the international business community concerning the Philippine economy’s being ‘industrialized’ today. Coming from the business community itself, this evaluative perception is replete with many implications for the country. It bodes well for the country in fact.

I wish that the perception will resonate with greater power by the day so that those in academic and ideological circles will rethink their positions about the Philippine ‘mode of production’. As far as the Maoists are concerned, PH will always remain as semi-feudal/semi-colonial, backward, agrarian economy. Some academic circles will re-echo the same old worn out “PH is a service economy, with mixed economy features.”

This analyst still recalls very well the ‘mode of production’ debate that reverberated the halls of the University of the Philippines in the 1980s. I graduated from this university in October 1980, then came back to take up graduate schooling in sociology from Nov. ‘83 to April ‘89, and so I was able to flow with the discussions and debates ensuing. The debate centered largely on whether the Philippines is semi-colonial/semi-feudal (Maoist) or capitalist mode (moderate Marxists, populists, social democrats).

By the mid-90s, the debate was already faltering and dying out. It was a dead debate when the year 2000 rang a sonorous beacon of the new millennium. But if you ask any of the competing ideological blocs today about their perceptions of Philippine reality, you will notice that they will churn out the same lines that they’ve been saying for decades.

As regards the perception that PH economy is a ‘service economy’, the criterion is largely based on what sector—agriculture & forestry? industry? services? –contribute the greatest to the gross domestic product or GDP. Since services contribute 55% to the GDP, then PH is a ‘service economy’.

That evaluative perception has a kindergarten undertone to it, as it relies on simplistic assumptions. Just because the industrial sector, which churns out barely 30% (manufacturing + infrastructure combined) of the GDP, looks diminutive than services, doesn’t merit an economy to be judged as ‘services’ or ‘non-industrial’ economy.

To be fair to those opinion quarters who have their own paradigm that churn out specific evaluative judgements, the term ‘industrializing’ was used to label Philippine development since the 1980s. At one point, PH was included among the NIEs or ‘newly industrializing economies’, and so the reference point was industry more than services.

Let’s go back to the USA in the year 1900 when it was already adjudged as industrialized. Industries began to enable the imperialistic pursuits of the USA then, if you recall your history well. But at that time, agriculture was still employing over 90% of the workforce, and nary an evidence can be shown that industry had out-stripped agriculture at that juncture as the main contributor to the national income (today’s GDP) perentage-wise. Yet the USA was already adjudged as ‘industrial’ at that time!

If the criteria would be largely the (a) prevalence and (b) impact of capital goods or ‘reproducible goods’ industries, then the market players have clear evidences to show such increased prevalence and impact. Save for integrated steel and castings & forging industries, every vital capital goods are already being manufactured in PH today. Unless of course that the ‘services economy’ judges are blind to these developments.

The emerging perception and judgement about PH economy should be impetus enough to cause a re-tooling by the analysts and ‘best practices’ innovators. It would prove beneficial for everyone if coteries of opinion-makers, business executives and capitalists themselves would begin the ball rolling by publishing their emerging perception about the ‘emerging markets’ such as PH to be already ‘industrialized’.

As a related event, I just signaled the young Prof. John Ponsaran, head of the development studies program in the UP Manila, about the emerging perception. I once taught in the UP Manila’s department of social sciences, where development studies is niched, so I know the temper of the faculty there that goes for debating on anything under the sun. I hope the emerging perception will be tackled in that campus.

[Philippines, 08 January 2011]


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Lucio Regalado said...

This position is surely worth many debates. I will follow through on them.

Susan Chan said...

Can't say much about the matter. Though data show that services are on top, now that the issues were raised here I must suspend judgement about Ph development level.