NEDA ready but waiting for President’s order to draft national economic plan

EXECUTIVES of the National Economic and Development Authority (NEDA) ignored my request for comments on President Benigno Aquino 3rd’s choice of the zero-based budgeting technique and how it will impact on the agency’s work.

But I got a scoop from them: They are ready to draft the new Medium Term Development Plan but will only begin to do so when the President tells them to do so.

This, to me, could mean that the preparation of the plan cannot be done or begun now because the NEDA still does not have a clear picture of the administration’s priorities.

The NEDA people, I think, need the various agencies to finish their self-review, which would then have to be approved by the Budget department and President Aquino, before the final list of priority programs is available for NEDA to organize into a coherent national economic development plan.

For sure, this year’s budget proposals from the government agencies need to conform to the Aquino administration’s priorities.

“The budget will support the priorities of the Aquino administration as enunciated in the inaugural speech and 2010 SONA [State of the Nation Address], particularly programs and projects intended for the poor, those that will attract investments that will create employment opportunities and attain a high economic growth,” Myrna Asuncion, director of NEDA’s national planning and policy staff (NPPS).

The Aquino administration’s economic blueprint will focus on fighting poverty, stopping corruption, attaining a high and sustained economic growth to create employment opportunities, equalize access to development opportunities and provide effective social safety nets.

Asuncion said the NEDA is expecting the President to issue an instruction any time soon to draft the new Medium Term Philippine Development Plan.

“The actual process of drafting a new MTPDP starts when the new President orders it,” Asuncion said.

Benjamin Diokno, former budget secretary of the Estrada administration, had said earlier that the new MTPDP should reflect the priorities of the new administration such as social services, social protection and public infrastructure.

Diokno added that the MTPDP should also show a specific, credible and doable budget deficit reduction program.

“A deficit to GDP [gross domestic product] ratio tapering from the present 4 percent to 2 percent by 2016 appears appropriate,” Diokno said.

In the first five months, the country’s fiscal gap reached P162.1 billion, exceeding the P145.2 billion ceiling for the first semester.

The government’s target is a deficit-to-GDP ratio of 3.6 percent this year.

NEDA’s head, Socio-economic Planning Secretary Cayetano Paderanga, said the general direction of the Aquino administration is to have a high-sustained growth and to provide responsive social safety nets, like the conditional cash transfers (CCT) program.

The CCT Pantawid Pamilyang Pilipino Program (4Ps) provides poor households P500 a month for health and nutrition needs and an additional P300 a child in school, for a maximum of three children a family. This program has been successful in reducing the number of dropouts.

The Aquino administration is targeting an economic growth rate of between 7 and 8 percent next year and every year until 2016.

To attain a sustained economic growth, Paderanga said the government will provide an enabling environment for private sector investment.

Government will work to create a more stable macroeconomic environment that will cause rapid growth of industry.

“We are hoping that the changes we want to make in infrastructure as well as the business processes and investment programming especially in infrastructure needs . . . might lead to a higher growth rate,” Paderanga said.

He added that the government will invest in infrastructure such as electricity, transport, water, irrigation, solid waste management and in other things that will increase industrial activity and production.

The government is targeting to raise investments to a range of 25 percent to 28 percent of GDP for the period 2011 to 2016, from the current 14 percent.

To achieve this, the government will increase spending on public infrastructure and campaign for greater private sector participation.

“We are hoping that with the new administration’s high credibility and trust ratings, we would be able to get more domestic and foreign investors to start looking at our country more intensely,” Paderanga said.

Paderanga added that the government will provide equal access to development opportunities through investing in human capital, especially in education, health and other basic social services. –DARWIN G. AMOJELAR SENIOR REPORTER, Manila Times