The Good Old Days when Gasoline was Cheaper Under the Late Noynoy Aquino

Millennials' Voice

I would like to clarify first and foremost that this post isn't an attempt to say that the late Benigno Simeon C. Aquino III's legacy was all bad. Some good things happened. However, let me be clear that it's stupid to say, "We don't need economic cha-cha because of the late Noynoy." However, let me clear that I decided to write this because of a Facebook post called Millennials' Voice, which wrote this:

Did you know that during President Noynoy Aquino's time, the price of oil in the world market was high, between $100 and $110 per barrel. But even with those high prices, gasoline and diesel at local pumps in the country were still relatively affordable. 

Under President Duterte, world oil prices went up and down, from a low of $41 to a high of $101 per barrel. The big jump to $101 in 2022 happened because of the war between Russia and Ukraine.  

Now, under the current president, world oil prices have gone up again to around $107 to $108 per barrel.  

The interesting part is that when you compare the Aquino years to today, the world oil prices are almost the same. But back then, Filipinos felt the price hike less and were not as burdened when buying fuel. This shows that when a government is clean, honest, and managed well, it can protect ordinary people from the full impact of global economic problems.

This is problematic when you think about the reality. We need to look at the global market again. I was thinking about how people who kept talking about the PNoy golden age may need to remember the following:

1. The USD to PHP exchange rate was still relatively low. It was from PHP45.11 in 2010, PHP 43.31 in 2011, PHP 42.23 in 2012, PHP 42.45 in 2013, PHP 44.40 in 2014, PHP 45.50 in 2015, and PHP 47.50 in 2016. Barrels of oil were much cheaper back in the day. Noynoy nor any president before or after him could magically turn the knob to make the PHP to USD exchange rate. That means purchasing power was much higher. 
• Sidenote: Do I need to remind people at the Vietnamese Dong (VND), the South Korean Won (SKW), and the Japanese Yen (JPY) have a much lower value than the PHP?
2. The Philippines' bigger bottleneck for oil prices hasn't been the president alone. In the case of the Philippines, let me remind you that we still don't have a local oil production site compared to other countries. This is because unfortunately, there's still many sectors under the 60-40 restrictions (or higher) that could've helped the Philippines have the technology to produce its own gasoline. 
3. Growth rate, while acceptable, isn't always the best gauge of success. One can say the Philippines had a higher growth rate under Noynoy. However, let's just say that a good student got 80% in the first test and got 85% in the next test. The growth rate is 5% only. Now, the bad student got 20% on the first test and got 40% on the second test. The bad student has a growth rate of 20%. But we know who is the better student based on the test results. 
4. The tax rates during Noynoy's time were still under the 1997 tax code. If one can remember the 1997 tax code (I was there too), one might have to read about the Laffer Curve effect. If tax rates are so high, then you couldn't expect universal compliance to be done by the citizens. Also, to say TRAIN law caused the gasoline to increase is stupid. Since when did having a higher tax rate automatically lower down the prices of gasoline? 
5. Gross domestic product isn't exactly the best indicator for a healthy economy, either. Yes, a high GDP can be good, but if it's just jobless growth, a still unbearable tax burden, etc., it doesn't really become the best indicator.

If we need to take a look at this, the World Finance also says this, which may prove that Noynoy wasn't the perfect leader that diehards "paint him out to be":

Coming up short 

Having become such a familiar macroeconomic metric, it is easy to forget that GDP is a relatively modern invention. The framework for monitoring economic growth was created for the US Government by Russian-born economist Simon Kuznets in the aftermath of the Great Depression, before modifications made by British economist John Maynard Keynes turned it into the indicator we know today.

In an independent review of the UK’s economic statistics published in 2016, Sir Charles Bean wrote that GDP is often viewed as a “summary statistic” for the health of the economy. This means it is frequently conflated with wealth or welfare, though it only measures income. “Importantly, GDP… does not reflect economic inequality or sustainability (environmental, financial or [otherwise]),” Bean wrote. What’s more, GDP is not the precise and flawless figure that many believe it to be – it is merely an estimate. “This uncertainty surrounding official measures of GDP is inadequately recognised in public discourse, with commentators frequently attributing spurious precision to the estimates,” Bean continued.

Sarah Arnold, Senior Economist at the New Economics Foundation (NEF), told World Finance that GDP as a measure of economic activity is simply a means to an end: “It has become so synonymous with national success that the rationale for pursuing economic growth in the first place seems to have been long forgotten.”

Putting the flaws highlighted by Bean and Arnold aside, GDP is still an inaccurate measure of prosperity, as it fails to convey much of the value created in the modern world. GDP was developed during the manufacturing age and, as David Pilling, Africa Editor of the Financial Times, wrote in his book The Growth Delusion: Wealth, Poverty and the Wellbeing of Nations: “[GDP] is not bad at accounting for production of bricks, steel bars and bicycles.” Where it struggles, though, is with the service economy, a segment that accounts for a growing proportion of high-income countries’ economies (see Fig 1). “[Try GDP] out on haircuts, psychoanalysis sessions or music downloads and it becomes distinctly fuzzy,” Pilling wrote.

GDP’s preference for tangible goods also means it is insufficient at capturing the value of technology. Where disruptive innovations have made life easier for consumers – allowing them to book their own flights rather than paying a travel agent, for instance – GDP only sees a shrinking economy. “Lots of what tech is doing is destroying what wasn’t needed,” Will Page, Director of Economics at Spotify, told Pilling. “The end result is you’re going to have less of an economy, but higher welfare.”

Countless free online services have moved outside the realm of economic activity measured by GDP, including Google, YouTube and Wikipedia. In the eyes of GDP, innovation – even if it means a better quality of service – is often a detractor of economic growth. Elsewhere, valuable areas of work have always existed outside of the GDP framework, including housework, caring for sick family members or friends, and volunteering. The impact of this work is unaccounted for simply because no money changes hands.

In a 2014 speech, Andrew Haldane, Chief Economist of the Bank of England, said the economic value of volunteering could exceed £50bn ($63.7bn) per year – and that is before tallying up the impact on the volunteers’ wellbeing, which includes reducing stress, improving physical health and learning new skills.

Conclusion: Basically, it's time to think that the correlation between Noynoy and gas prices is really a causation fallacy.