Consumers Domain
By Ian Seruelo

Trickle down

"Anyone can escape into sleep, we are all geniuses when we dream, the butcher's the poet's equal there."—E.M. Cioran

GDP grew by 6.1 % last year.   And so it was declared. President Arroyo was elated proclaiming that the country's wealth will trickle down to the poor soon.   What quick logic! Since when did GDP growth translate to trickling down of wealth to the poor?

When GDP goes down and the economy performs badly, it is the poor who suffers most and ends up shouldering the heaviest burden.   That is a fact and has been validated by several experiences.   Remember the Asian financial crisis last 1997?

And don't forget that the previous year when the President announced that the country is in a fiscal crisis, the package of reforms proposed by Malacañang are mostly additional burden to the poor.   That's why President Arroyo is now pushing hard for the increase in VAT to 12%.

Now, if the economy performs “well” (i.e. according to government standards) and the GDP indicator is up, can anybody stand up and assert that the poor will be the ones to reap its rewards?

Trickle down! Whew what a callous term.   Can you just imagine what this concept actually suggests? Well in some respects President Arroyo and all those bright economists could be right. Hmmm….trickle down indeed…    

This means that in times of a robust increase in wealth created, the poor shall not expect much from it but simply – yes, you got that right – trickle downs!   A drop in a bucket. A small drip that could hardly satisfy the minutest of all thirst.   

In spite of the increase in productivity and profitability in economic activities, the poor shall only count on trickle downs. And don't even think that those trickle downs will be automatic lest you will branded as unreasonable by those technocrats and so-called economists. Remember, even the President said such trickle downs will not be felt now or immediately but “soon”.

For the past five years our annual GDP grew from 3 to 5 percent.   Now I ask you – has the condition of the poor improved? Did we see a meaningful improvement in the figures of poverty?   Indeed, the trickle downs are so insignificant; it failed to make a consequential dent on the lives of the ordinary Filipinos.

Now, President Arroyo and her economic managers are so proud of the figure as if it's something we Filipinos should be celebrating about.    

With and despite this GDP growth, the administration is trying all its best to have the VAT increased from 10 to 12%.   Now this is beginning to really puzzle me.   Is President Arroyo now saying that the GDP growth means an improvement in the lives of the poor Filipinos and at the same time there is a great need to milk us some more for additional taxes?

Is this the government's way of redistributing wealth? Painting rosy pictures of GDP growths and imaginary progress while trying to bleed our pockets dry with more taxes plus higher power, fuel rates, higher cost of education and health care and wasteful spending for debt payments…

The way I see it, it is high time that we, consumers and taxpayers should bring this issue out in the streets and bring this government to its senses.   Can President Arroyo not see that a strong volcano is about to erupt?    

(For comments and suggestions please email ianseruelo@yahoo.com or send text message to 0919-3486337.)