Not the golden age of the PH economy – Manila Bulletin

Today marks the 49th anniversary of the declaration of martial law by former President Ferdinand Marcos, who ruled the nation with an iron fist from September 21, 1972 until his overthrow on February 25, 1986. In the media social, its supporters claimed that the Philippines was the “richest country in Asia” during the Marcos era which they saw as the “golden age” of our economy.

But World Bank economic data for Marcos’ 20-year reign from 1965 to 1985 showed the opposite. In terms of gross domestic product (GDP) during this period, Japan had the highest average GDP while the United Arab Emirates recorded the highest average GDP per capita. Based on these two indicators, our ranking was far from the top 10 among the 48 countries that make up the Asian continent.

In fact, the Philippines was not even the richest country in Southeast Asia during those two decades. Before Marcos won the presidency in November 1965, our GDP per capita was the third highest in the ASEAN region, after Singapore and Malaysia. By the time it was ousted by the Filipino people during the EDSA revolution in February 1986, our GDP per capita had fallen to fifth place behind Singapore, Malaysia, Thailand and Indonesia.

The results of an economic analysis carried out by Professor Emmanuel de Dios of the University of the Philippines (UP) showed that our GDP per capita only increased by 3.4% for the decade 1970-1980. In contrast, our ASEAN neighbors have shown much higher growth rates during the same decade: 7.7% for Singapore, 5.7% for Indonesia, 5.3% for Malaysia and 5 , 1% for Thailand.

A more recent study by UP economists JC Punongbayan and Kevin Mandrilla came to the following conclusions about the Marcos era: two decades of development have been lost; the plan borrowed too much too quickly; the manufacturing sector has been neglected; working conditions deteriorated rapidly; and the Philippines became “the sick man of Asia”.

Using data from the Philippine Statistics Authority, Punongbayan and Mandrilla came to the conclusion that “it took the country a whole generation to recover from the poor performance of the economic policies and management of the Marcos regime.” From 1977 to 1982, the country’s total external debt rose from $ 8.2 billion to $ 24.4 billion, leading to an eight-fold increase in interest payments as a percentage of national income. “This reckless debt management erupted into a full-fledged crisis in 1983,” they said.

Moreover, the crony capitalism adopted by Marcos was a brake on the growth of private enterprise in favor of the interests of the cronies – which led to stagnation of manufacturing and prevented the Philippines from participating in the so-called ” miracle of East Asia ”over the following decades. . As a result, our economy has lost so much ground compared to neighboring countries and catching up with them has remained a big challenge until today.

The per capita income of Filipinos has fallen sharply during these “lost decades of development” which, according to the two economists, bear witness to a “really dark era in our economic history”. They found that “even with these data alone, it is difficult to understand why many people cling to the idea that the Marcos regime, taken as a whole, brought about the golden age of the Philippine economy. “.

And now we’ve become the sick man of Asia again with the cycle of over-indebtedness and debt-driven growth rearing its ugly head again. This time, it has been exacerbated by the current COVID-19 crisis and the alleged plunder of pandemic funds – a double whammy for an economy struggling to recover after five consecutive quarters of negative growth.

J. Albert Gamboa is a life member of the Financial Executives Institute of the Philippines (FINEX). He is editor-in-chief of the quarterly magazine FINEX Digest and the monthly newsletter FINEX Focus. The views expressed here do not necessarily reflect the views of these institutions and the Manila Bulletin.