An appeal before the election: Flick your brains before voting

The “PiTiK” test captures presyo (prices), trabaho (jobs), and kita (incomes). Historically, in terms of P, the Philippines was at its worst under Marcos, with inflation averaging over 16 percent per year, and extremes of 35 percent in the early 1970s and 50 percent before the Edsa People Power Revolution.

In terms of T, the Philippines was at its best during Marcos’s term, with the unemployment rate averaging 6 percent from 1970 to 1986. After 1986, the country suffered 24 years of nearly 10 percent unemployment rate under Cory Aquino, Ramos, Estrada, and Arroyo.

In terms of K, the Philippines was at its worst during Duterte’s term, with annual gross domestic product contracting by about 10 percent in 2020 due to the pandemic. However, the Philippines suffered its worst two-year contraction of nearly 7 percent in 1984 and 1985, marking the tail end of Marcos’s term. The contraction was due to the debt crisis—which was self-inflicted! However, the average annual GDP growth rate from 1971 to 1986 was 3.6 percent—slightly higher than the 3.4-percent average from 1987 to 1992 during Cory Aquino’s term.

Since the “PiTiK” test results are ambiguous, another test should, perhaps, be considered. The “UTaK” test uses utang (debt), trabaho (jobs), and kita (incomes) as its indicators. In terms of U, as measured by external debt (in 2018 prices), Marcos left office in 1986 with P3.7 trillion of debt. Under Cory Aquino, it was reduced to P3.0 trillion in 1992. Over the next 10 years, external debt increased under Ramos, Estrada, and Arroyo. It stood at P5.7 trillion in 2003. For 12 years thereafter, the debt declined back to P3.7 trillion by the end of Benigno Aquino’s term. Combining with T and K above, the results of the “UTaK” test are just as ambiguous.

Now, suppose that the “PiTiK” and “UTaK” tests are combined such that the variables are examined side by side to reflect some interesting economic tradeoffs. This combined test is called “PiTiK-sa-UTaK.”

In terms of P-U, suppose that prices are stable, but one cannot buy anything because of huge debt. Alternatively, suppose that one is debt-free, but he cannot buy anything because prices are rising rapidly. During Marcos’s term, inflation was at its worst while external debt stood at P3.7 trillion.

In terms of P-T, suppose that prices are stable, but one is jobless. Alternatively, suppose that one is employed, but prices are rising rapidly. During Marcos’s term, T was at its best while P was at its worst.

In terms of P-K, suppose that prices are stable, but one does not have income. Alternatively, suppose that one has income, but it is virtually worthless because prices are rising rapidly. Benigno Aquino’s administration had the best of both worlds. Inflation was 13 percent less than that under Marcos; GDP growth was 3 percent higher than that under Marcos.

In terms of T-U, suppose that one is employed, but he works only to repay debt. Alternatively, suppose that one is debt-free but unemployed. The average annual unemployment rate from 1971 to 1986 under Marcos was lower than that under Benigno Aquino by 1.1 percent. Nevertheless, here is the crucial difference: External debt stood at P3.7 trillion by the end of Marcos’s term after the government borrowed, while it stood at P3.7 trillion by the end of Benigno Aquino’s term after the government paid off its debt!

In terms of T-K, suppose that one is employed, but his income is small. Alternatively, suppose that wages are high, but one cannot find a job. Here is the crucial difference between Marcos and Benigno Aquino: Under Marcos, the unemployment rate was 1 percent lower, but the GDP growth rate was also 3 percent lower.

In terms of K-U, suppose that one has income, but it is not enough to pay off debt. Alternatively, suppose that one is debt-free but does not have income. The debt-to-GDP ratio during Marcos’s term was 85 percent. It was 23 percent during Benigno Aquino’s term. Every P100 borrowed was equivalent to P118 annual income by the end of Marcos’s term. Every P100 borrowed was equivalent to P435 annual income by the end of Benigno Aquino’s term. The latter used the borrowed money to grow the economy more.

Clearly, the economy has improved since the Marcos years—but not enough to quell voters’ discontent. There is still much work to do to spread the benefits of economic growth more widely across regions and sectors.

As “PiTiK-sa-UTaK” connotes, Filipinos should probably flick their brains before voting. Beyond economics, Filipinos should vote for someone who will uphold good governance, human rights, democratic principles, truth, and decency.

Dr. Luis F. Dumlao is Dean of the John Gokongwei School of Management at the Ateneo de Manila University.