The Philippines faces tough challenges of reducing poverty, raising investments in the country and generating quality jobs for its people even as it enjoys impressive economic figures starting last year, the government’s chief socio-economic planner said Friday.
In a forum with foreign correspondents, Arsenio Balisacan said the Philippines aims to bring down its poverty rate of 27 percent as of last year to 16.6 percent by 2015 under the Millennium Development Goal.
The country also hopes to generate more than 1 million quality jobs every year, which can be achieved by increased investments, preferably in manufacturing, aside from increased government spending on infrastructure.
“For this administration, our goal is really to get growth reasonably rapid, (so) that it delivers much more than the rate of the population. At the same time, we are even more concerned about the sustainability of that growth,” Balisacan said.
The Philippines, which has a population of nearly 100 million growing at an annual pace of almost 2 percent, posted the highest growth in Asia during the first quarter of 2013 at 7.8 percent, beating even China’s 7.7 percent.
In 2012, the economy grew by 6.8 percent, a big leap from the 3.6 percent posted in 2011.
However, the country’s unemployment rate rose to 7.5 percent in April this year from 6.9 percent during the same month last year, owing to the weakening of employment in the agriculture sector.
Since the country’s economy depends so much on consumption, Balisacan said there is a conscious effort to diversify it to keep it stable from possible external shocks.
Targeting a stronger manufacturing industry in the coming years to offset the currently healthy services sector, Balisacan said government is trying to beef up foreign and domestic investments.
“We are trying to diversify the economy toward more investment, toward more trade, exports in particular. That’s our own version of rebalancing,” he said.
“We are trying to improve the contribution of industry or manufacturing in the economy. We are the only country in this part of the world where the manufacturing industry is not contributing to employment generation as much as we would have wanted.”
“So, we are going back to reinvigorating our industrial sector, particularly manufacturing, so we can create jobs,” he added.
Recognizing the comparatively low foreign direct investment in the Philippines in recent years, Balisacan said this can be boosted if the Philippines sustains its current “very remarkable growth” in the same way that Indonesia, Thailand and Vietnam consistently attract considerable foreign direct investment owing to their decades-long economic growth.
Foreign direct investment in the Philippines amounted to only $1.9 billion in 2011 and $2 billion in 2012. During the first three months of this year, it was worth $1.3 billion.
“This time, we are moving to a higher growth trajectory and our intention is to sustain that to make sure that we firmly establish the attraction of this country for investments and for the generation of employment,” Balisacan said.
The government is projecting a 6 percent to 7 percent growth rate for this year, 6.5 percent to 7.5 percent for 2014, and 7 percent to 8 percent for both 2015 and 2016. Balisacan said those projections are based on the country’s strong economic fundamentals yet still in consideration of uncertainties in Europe, the United States, China and Japan with which the Philippines has strong economic relations.
He said the government intends to double its current spending on infrastructure by 2016 to 5 percent of gross domestic product, as well as sustain its direct poverty intervention program of conditional cash transfers to identified poor families.
“We are very mindful of where to locate those infrastructure projects, in such a way that we could get the highest returns in terms of employment. We are programming our infrastructure where we identify priority areas or sectors that will be supported by appropriate infrastructures,” Balisacan said, citing tourism as one of such sectors.
Ultimately, he said the goal is to have an economy that offers jobs that deliver people out of poverty, regardless if these are contractual or regular in nature.
“We have calibrated the intervention such that it generates jobs, it addresses poverty reduction in the next three years, while at the same time, laying the foundation for more medium-term, long-term programs. The president does not want bandage solutions to our problems,” Balisacan said. –Kyodo
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