No patriot-Filipino would wish the nation did not prosper. What is good for the nation will eventually be good for all.

But the "stunning" 6.9% GDP growth rate of the country for the First Quarter 2007, unfortunately, may not be sustained throughout the year. We wish it would be so that our GDP will at long last be among the region's best (for good) behind China's 11% and Vietnam and India's 7% GDP growth rates.

Our research and analysis do not seem to favor such patriotic fervor.

First, the movers came from government "pump-priming," called pre-election spending (for obvious beneficiaries) as public construction and government consumption showed hefty increases of +17% and 13% respectively. The elections are now over, so?

Exports which only displayed a +3% growth in 2006 suddenly overdid itself with a remarkable +10% in the First Quarter. But that is not going to have an encore performance, hereon.

Because with the strong peso now at P45:US$1, 70 export firms have shut down retrenching 30% of the jobs plus 30,000 jobs lost in the export industry. Indirectly, this caused 20,000 export subcontractors to stop operations, alongside 1,000 firms reporting another 300,000 in perished jobs.

The other problem with our GDP composition is that it is consumption-driven - from the US$10-billion remittances sent by our 11 million OFWs finding their way into home building, cars, appliances and luxury goods. Unfortunately, from last year, the peso has slid from P55 to P45 to a dollar, a 20% reduction of remittances. Theoretically, all things, equal, the peso equivalent would have been reduced from US$10-billion to only US$8-billion, representing the 20% peso rise. What will drive the economy now?

Unemployment remains a problem because there are not enough new investments that create jobs, the growth being consumption not investment-led. Fixed investments only grew by a small 2.7% and even a mere half a percent in capital formation. The poor attractiveness of RP as an investment haven is confirmed by the fact that investments only represent 15% of GDP while other regional nations report 25% of GDP.

Comparing even the sizes of those nations' GDPs to RP, the ratio makes the investment portfolio of the country even more miniscule in comparative absolute terms.

The much-touted Philippine Stock Exchange surge - the best in 80 years - is not a barometer of sustained growth. According to former FINEX president Edwin Fernandez, a Government ran by usurpers and pretenders will attract "opportunistic" hot money - aimed at quick profits and liquidity. They are not the kind that hungers for returns on the long haul - and will disappear to shores unknown at the sneeze of another Trillanes in the horizon. The kind of investments that would have created jobs.

The unemployment problem is not solved by the most powerful driver of the economy: the Service sector. This accounted for 4.4% of the total 6.9% of the First Quarter growth rate. The "problem" with that is that the persons who are given employment are the highly paid call center employees, medical transcriptionists, accountants, lawyers and software engineers. Nothing wrong with that basically.

However, it would have been more "socially beneficial" if the employment had been given to more low-waged factory and farm workers which would have reduced the unemployment figure more than as it is concentrated today in high-waged urban-based "service workers" cited above.

Additionally, the rise of the peso should have normally encouraged investment in long term machines and capacity which we still are not seeing because investors are hedging for a number of reasons - chiefly political and corruption issues.

NEDA Director Romulo Neri of Bohol had been very candid about this by stating that "social trust (of government) and economic growth have a correlation in the long run" and that "businessmen have not put a firewall between politics and economics."

Simply put, corruption in high and low places (the most corrupt Asian nation, remember?) discourages real economic growth spurred by investments. Second, economic decisions are closely affected by political bickering on issues of legitimacy and treatment of dissent and counter-consciousness.

Finally, there are international factors which, in fairness, are out of the Government's control.

First, until we shed our dependence on oil, the rising prices of international fuel will be brought to beat on the country's performance. Added to this worry is the expected slowdown in two of our major trading partners: China and the USA.

The USA showed a very anemic .05% (less than 1%) GDP growth recently, the lowest in the last four years. This dramatic slowdown will affect the Asia Giant China which sells 21% of her exports to the USA.

Since the Philippines sells its merchandise exports to China (20%) and USA (16%), it is more likely the Philippines will catch colds now that both countries are figuratively sneezing.

Finally, unless the 2004 GMA legitimacy issue and the 2007 election brouhaha are put to rest, those will compound what are economic givens that make us issue a rather less than optimistic view that the touted 6.9% First Quarter GDP Growth rate is a "flash in the pan" - one quarter of fame for the nation.

Oh how we ardently wish that growth was more permanent.

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