WB-IFC: Poverty, structure keeps PHL from inclusive growth

A platform of the Aquino administration is to achieve “inclusive” growth, but an official of the International Finance Corporation (IFC) told an economic forum Monday the Philippines has a long way to go before it can reach this goal.

Inclusive growth means giving “better opportunities for the unskilled labor… The one area where we have unskilled labor is in the agricultural-business sector,” Jesse Ang, the IFC resident representative said during the Philippine Economic Briefing on Monday at the Philippine International Convention Center.

“One of the biggest concerns is that we are not being very inclusive,” Ang said.

“Our structures here in the Philippines have been one where we are very much driven by just a few companies, relatively speaking,” he added.

IFC is the World Bank’s private sector investment arm.

Ang noted poverty reduction efforts in the Philippines pale in comparison with other Asian countries. While Thailand and Malaysia were able to bring it down to single digit levels, “we have not been able to get poverty incidence below 20 percent,” he said.

He also cited Indonesia and Vietnam were able to bring poverty incidence down to around 15 percent.

“Indeed, there’s still much to do,” Ang added.

Consistent GDP growth

Even if the Philippine output grew 5.9 percent in the second quarter – up from 3.6 percent a year earlier – “the level of inequality in this country is very high,” Socioeconomic Planning Secretary Arsenio Balisacan told reporters at the sidelines of the forum.

Economic managers wanted to break away from an exclusive growth to a “growth that spills over even to the unskilled.

“We wanted to break away from that growth na kakaunti, or yung mga elite lamang ang nakikinabang,” Balisacan said.

As to why the Philippines espouses stark social inequality, the Secretary cited the concentration of ownership of economic assets. “Who owns the productive assets? Highly concentrated ang ownership sa industry at sa agriculture,” Balisacan said.

“What we want to see is that Filipinos, particularly the children of the poor, would have better opportunities for themselves when they join the labor force,” he added.

Filipinos would feel real inclusive growth once there GDP consistently grows for sometime, the Philippine official noted. “In two to three decades. Ang nakikita palang natin ngayon iilang taon pa lang – mga two to four years. We’re not there yet,” he said.

“Kailangang itaas pa natin and sustain it for the next 20 years. So by the time you are grandfathers or grandmothers you can say that [the country has] grown, that so much has improved,” Balisacan added. — VS/DVM, GMA News