Bienvenido S. Oplas, Jr., president of Minimal Government Thinkers, says there is nothing to celebrate after unemployment in the Philippines went down to 10 percent.
This is because neighboring countries “did not even experience double-digit unemployment rates both in the first and second quarters of 2020.”
“Even compared to European countries and North-South American countries that experienced 400+ COVID-19 deaths per million population (CDPMP), the Philippines, with only 36 CDPMP, has an ‘outlier’ unemployment experience,” he said in an article featured in BusinessWorld.
The Philippine Statistics Authority (PSA) has reported that the implementation of the strict nationwide lockdown that ran for 6 months has cost millions of jobs. Last April, the unemployment rate was at 17.7 percent but improved to 10 percent in July.
A survey by the Social Weather Station (SWS) suggested that the unemployment plus the underemployment rate for the month of July was at 45.5 percent, a huge increase from last year’s 20 percent.
Oplas pointed out that the Philippine government, much like the many from other nations, are adept in “wasteful spending.”
“Governments around the world including the Philippines regardless of administrations are known for wasteful spending. They have little or no ability to generate fiscal surplus in periods of no crisis, pay back old debts so that when a real crisis comes, they will have more leeway to borrow again,” he said.
Oplas said that the country’s debt is getting worse, which should be blamed on the current administration.
“In 2016, the budget and borrowings made by the previous Aquino administration saw the outstanding public debt stock at P6 trillion. The next three years, 2017 to 2019, saw a big jump in expenditures and the budget deficit so that public debt has expanded by P1.64 trillion or P547 billion/year on average.”
The bigger the loan, the bigger the debt is going to be, and that is exactly what has happened.
“Big borrowings mean big interest payment: P361 billion in 2019, P421 billion this year, P531 billion in 2021, and P604 billion in 2022.
“The higher excise tax in petroleum products of P6/liter under the TRAIN law of 2017 has brought extra revenues of P30 billion/year to the government yet it sparked inflationary pressures and some political discontent in 2018-2019. But interest payments of P361 billion in 2019 — 12 times that of oil tax hike revenues — has not sparked any serious political discontent because the amount looks “abstract” despite its size.” he added.
He said that there is a problem with the lockdowns and the huge borrowing of money by the government. These two factors don’t seem to do anything to help the public.
“There is a disconnect between two government policies — strict lockdowns that crippled if not killed many SMEs and created millions of new unemployed, versus big spending and borrowings purportedly to revive the crippled and dying businesses.”
“This is similar to a bully who crippled an innocent person then gives him a wheelchair and says that the crippled person should thank the bully for the opportunity to move around via wheelchair,” he said.
Business owners shouldn’t rely on the government for assistance, Oplas just doesn’t see it happening with all the restrictions and guidelines implemented.
“Consumers and entrepreneurs cannot expect meaningful assistance from the government’s higher spending and borrowings. They are the wrong remedies for the wrong policies (strict, indefinite, no timetable lockdowns).”
Oplas believes that entrepreneurship should be promoted and that the government should have less involvement in the private enterprise.
“The “animal spirit” of entrepreneurship and innovation must be unleashed. Government should learn to step back, have less regulation, less taxation (thanks to the CREATE bill), less business intervention and arbitrary policy reversals,” he said.