Yearend 2009: Economic Shocks, Political Ambitions & Challenges for the People in 2010

1. Yearend 2009: Economic Shocks, Political Ambitions & Challenges for the People in 2010 On the national economic & political situation IBON Foundation January 15, 2010

2. Global crisis update • World economy in new period of lower economic activity with false/shallow recoveries • End of debt-driven growth • Another global slump/renewed economic downturn likely • Declining stimulus packages from 2010 • New asset bubbles

4. Impact on the Philippines • Philippines’ “globalized” sectors deeply affected by economic crisis, economy effectively in recession since 2009 • Economy not “resilient” but developmentally inert – “free market” policies since 1980s have: • Weakened economy • Distorted growth • Increased vulnerability to external shocks • Worsened joblessness

5. Manufacturing as small as in 1950s 18.5% 15.5% Agriculture smallest ever 1Q-3Q2009p

8. 2008: 1.24 million deployed Jan-Nov 2009: 1.29 million deployed (3,845 per day)

12. State of people’s welfare • People’s welfare worsened – • Rising joblessness • Growing poverty • Aggravated by militarization & other man-made disasters following natural disturbances

13. Record joblessness (unemployment rates) • 2001-08 : 11.2% • 2009 : ~11.0% • IBON’s Oct-09 national survey • 71% of Filipinos rate themselves as poor

14. 2009 (IBON estimates on NSO data): labor force ~ 39.4 million • ~ 4.3 M unemployed • 35.1 M employed, but poor quality work: • 4.2 M “unpaid family workers” • 12.2 M “own-account workers” • Among “wage & salary workers” • ~ 4.7 M “non-regular” (i.e., contractual, casual, probationary, apprentice, seasonal) • ~ 11.7 M “no written contracts” (i.e., none, verbal contracts only) • 1 out of 3 jobs (12.8 M) part-time work • ~ 25.4-32.4 millionjobless or in poor quality work

15. Migration & underdevelopment • Unprecedented dependence on overseas work/remittances a sign of backwardness & underdevt • Limits of overseas work as economic lifeline being reached • Adverse affects on welfare of OFWs and families • Creating greater problems for economy as a whole

17. 2004-2009:Flat (falling?) share of GDP 1990-2004:Rapidly growing share of GDP 1980-90:Slowly rising share of GDP

18. Renewed fiscal crisis • Descent into fiscal crisis will accelerate in 2010 – • Drastic implications on social services • Portending greater tax burdens • Leading to greater instability

19. Total debt service 644 B 746 B

20. Land and livelihoods • Deepening rural poverty and failure of agrarian reform • National resurgence in peasant struggles for land & livelihoods

21. Hacienda Luisita, Tarlac (Cojuangco-Aquino) • Hacienda Looc, Batangas (Fil-Estate/MSDC) • San Miguel, Bulacan (Villafuerte) • Fort Magsaysay, Nueva Ecija (7th ID, AFP) • San Miguel, Leyte (Veloso) • Bago, Negros Occidental • etc…

22. Predatory democracy • 2010: country in most advanced state of political crisis since Marcos dictatorship

23. GMA’s gambit • Charter change untenable for now, Arroyo efforts shifted to May 2010 elections and laying political groundwork for maneuvering under next admin • Political crisis to new and higher level if 2010 elections don’t achieve minimum of credibility – and especially if Arroyo clique resorts to more extreme measures

24. Elections and change • “Change” an underlying theme of elections out of extreme dissatisfaction with Arroyo government – but prospects under next administration limited at best (however elections play out)

25. Testing democracy • Elections are unique in seeing parliamentary Left again seeking to expand influence to the national level and engaging in coalition politics

26. Change beyond elections • Worsening crises has sharpened public desire for change + driven social/mass movements + revolutionary armed groups • Under current economic and political circumstances, cha-cha is change for the worse even in next administration

27. Key elements for 2010 optimism: Radical socioeconomic reforms, realizing democracy • Improved level of political stability by thwarting ruling Arroyo clique’s maneuvering to stay in power – clean, credible elections • Entry of progressives/pro-people candidates into national level politics • Reliable process of holding Arroyo clique accountablefor transgressions • Momentum to democratization process – stop State-sponsored attacks • Solid repudiation of obsolete globalization policies causing such economic damage

28. Key elements for 2010 optimism: Radical socioeconomic reforms, realizing democracy • Explicit strategy to build domestic economy and reduce reliance on external sources of growth • More equitable distribution of economic gains to the direct producers • Addressing fiscal troubles in a pro-people manner • Increasing public spending on social services to improve welfare of crisis-battered population •  Grassroots & people’s movements as building blocks of democracy

29. Salamat po