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December 6, 2012 / emmanintheworld

Public Deception

Rigoberto Tiglao is at again.

In case you do not know, Rigoberto Tiglao is a columnist in the Philippine Daily Inquirer. He often writes opinion pieces against the President Aquino and his administration in issues ranging from the West Philippine Sea dispute with China to the President’s smoking habits.

A frequent reader of the opinion section in the Philippine Daily Inquirer can note the contrast between Tiglao and pro-Aquino columnist Conrado de Quiros. Their differences is interesting to note whenever the Aquino administration is in another controversial issue.

However, what separates De Quiros and Tiglao the most is that De Quiros is willing to criticize the President Aquino when warranted. On the other hand, Tiglao cannot seem to accept whenever President Aquino and his administration does something right. Instead, he twists the issue and frames PNoy’s accomplishments in a negative way.

And of course, that includes the surprisingly good economic performance of the country during the third quarter of 2012.

In his December 6 column, Tiglao said that there is a misunderstanding about the 7.1% Philippine GDP growth rate for the third quarter. He said that we shouldn’t analyze growth rates year-on-year but instead we should look at it in a quarter-on-quarter perspective, as some countries like the United States do.

Tiglao said that if we analyze the GDP quarterly, the Philippines’ total output actually decreased. The total output for the third quarter is only $1.525 trillion, down from the $1.6 trillion output in the second quarter. This is a 4.4% decline of output in a quarter-to-quarter basis, according to Tiglao’s computations.

There are two problems in this analysis: Tiglao didn’t account for seasonality during the year and his claims are just wrong.

What Tiglao forgot to mention is that you simply cannot compare GDP that way. There are patterns in spending and production during the year that affects quarterly GDP greatly. For example, household consumption  in May-June would be higher compared to normal levels because of the start of classes. Spending would also be higher during November-December because of the Christmas season compared to January when families are trying to save whatever income was left from their gift-giving.

This is why countries which compare GDP data on a quarter-on-quarter basis automatically adjusts their numbers when presenting it to the media. Tiglao even mentioned this in his column when he said that the US releases data on a seasonally adjusted annualized rate.

The GDP data presented by the National Economic Development Authority (NEDA) and the National Statistical Coordination Board (NSCB) to the media, however, wasn’t adjusted for seasonality. That’s why the $1.525 trillion and the $1.6 trillion figures that Tiglao used was wrong.

If you really want to compare Philippine GDP data on a quarter-on-quarter basis, a quick look on the NSCB website can satisfy your curiosity. The NSCB already did the math and compiled the data on a table of seasonally-adjusted quarterly GDP data from 1998 to the present.

And contrary to Tiglao’s claim that the economy contracted by 4.4% compared to the last quarter, the economy actually grew by 1.3% when you adjust it seasonally!

After claiming that the economy contracted during the 3Q, Tiglao also  attributed the 7.1% GDP growth to “arithmetic reasons”. He said that the reason why growth rate grew so much is because of the economy started from a low base. And in fairness to him, he’s right.

It is easier to achieve high growth rates if the data that you’re comparing it to is below average. In this case, the disappointing 3.2% GDP growth during 3Q 2011 partly contributed to the high growth rates in 3Q of 2012.

But we still can’t ignore the 7.1% growth rate simply because it came from a low base. The  growth rates for the 1st and 2nd quarters of 2012 also came from a low base but it only reached the 6% level. That means that the Aquino administration did something right during the third quarter to drive up the growth rate to the 7% level.

Tiglao’s twisting of the facts is troubling because it means that he is willing to deceive the public just so that he can convince readers to support his bias.The rules against bias may be looser for opinion writers but they are still responsible to uphold the truth.

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