As
we were listening to Aquino's 5th
State of the Nation Address, we have to admit that the country is
truly in good state. Every aspect of the nation seems to be
progressing positively, from employment, defense, agriculture,
health, education, justice, and,
economically-speaking. The Philippines is slowly climbing up the
ladder and is becoming globally competitive.
One
accomplishment that PNoy's administration has been boasting is the
economic standing of the country as its GDP rose to 7.9 on the 2nd
quarter of 2013. Also, the Philippines is now on the investment rate which is good and may indicate improvement however on the negative side, the
inflation rate has also risen. As of June 2014, it is 4.4% while the
GDP is at 5.7 % on the 1st
quarter of 2014. While it is shown that the economy is growing, the public is not benefiting from it because of the rising prices.
In addition, the continuous government expenditure, like public transportation and infrastructure should really be for the benefit of the masses not just for a few people. Especially now that the DAP is terminated, it may affect the economy if it will slow down the spending. Resources from DAP as well as from other sources should be properly allocated following the fundamental theorems of welfare economics; one is that every Pareto efficient resource allocation can be attained through a competitive market mechanism, with the appropriate initial redistributions. In this case, a decentralized market system is to be followed.
Aside from the list
of the President’s administration's accomplishments, the future
plans and targets of the remaining years of his term were also
introduced. The
President expresses his further objectives in the Bangsamoro issue,
he has already achieved a part of it, and he will carry on with this
on his 2014 list of goals. By the power bestowed in the President,
Adam Smith’s invisible hand was somehow not working in the process.
The future promises stated in the SONA shows the big role of the
government. Starting from the infrastructure projects which will be
beneficial to his “Bosses” - Filipino Citizens - and a gateway
for the 2015 ASEAN Summit until the energy supply and demand in this
country which is at its highest peak. Keynesian approach may help in
the energy problem of the country. Energy, being part of the
President’s future promises shows what Keynesian economics often
argue that private sector decisions sometimes lead to inefficient
macroeconomic outcomes which require active policy responses by the
public sector. It is known that the energy business in the
Philippines is monopolized by powerful people. Hence, the fiscal
policy actions by government is needed in order to stabilize the
output of energy issues over the business cycle while the monetary
policy actions by the central bank would help the long run process of
the 2015 National Budget. Philippines, having a mixed economy which
Keynesian economics advocates, is predominantly achieved by the
private sector but with a role of government intervention during
recession.
