ERNESTO M. PERNIA, PhD
Socioeconomic Planning Secretary
2018 Media Appreciation Dinner
December 13, 2018, 7:00 PM
NEDA DIOC, Pasig City
Our dear friends from the media, colleagues from NEDA, ladies and gentlemen, good evening.
Thank you all for coming to our Media Appreciation Dinner. This evening is for all of you who have been with us working hard and soldiering on for our development pursuits. In 2018, we have all witnessed successes and setbacks, hits and misses, big and small. But this holiday season is so much warmer seeing all of you here tonight.
At the onset of this year, we promised to be more open and transparent through our monthly #AskNEDA press briefing. Even though this is a media appreciation dinner, consider this as our ninth and last for this year. For 2019, we hope to continue to be true to our commitment to our media partners and to the public.
Overall, 2018 is not the kind of year that we have initially expected. We had our share of critics. But we also had our development partners who have always been beside us in our efforts to achieve our goals. You know there will always be more than two sides in a story. One group will view the glass as half empty, while the others half full. We choose to be on the latter’s side. But our hope and optimism is strengthened by grounded objectivity and unstoppable determination and hard work.
Despite external and domestic headwinds in 2018, the Philippine economy became stronger and even more resilient than ever.
[SUSTAINED AND UNINTERRUPTED GROWTH]
The economy has been on a roll. It has been growing at least 6 percent for 14 consecutive quarters now. This is the strongest economic growth we have seen since the mid-1970s.
And, I am proud to say that the Philippines’ economic growth is sustained and uninterrupted. While the year-to-date real GDP growth is at 6.3 percent and it is slower than the 6.8 percent growth recorded in the same period last year, the Philippines continues to be among the best performing economies in the region.
But there is still much work to do. Among the factors in the slowing down of the overall economic growth in the first three quarters of 2018 are lower agricultural output and softened household consumption, mainly on the back of accelerated increase in prices, particularly food. This reflects less optimistic consumer sentiment despite strong labor data—which I will discuss in a short while.
The Philippine economy needs to expand by at least 7.0 percent in the fourth quarter to attain the low-end of the 6.5 to 6.9 percent revised GDP growth target for 2018.
This is a tall order but the government remains committed to reaching the revised growth target for the year, which 6.4 to 6.9 percent.
Next, we have all felt the pinch of a faster inflation rate in the past few months. This has been a cause for concern for the whole economic team. And so, we have made sure that we are quick and on point in implementing our anti-inflationary measures. The President issuing Administrative Order 13 was crucial in our efforts to bring down the prices of key agricultural commodities, such as rice, fish, meat, vegetables, and fruits, which have significantly contributed to overall inflation in the past.
We are optimistic that increases in consumer prices have already peaked and we expect inflation to normalize in the medium term.
This confidence also comes from the recent passage of the Rice Tariffication Bill in Congress and its nearing enactment. Rice Tariffication Act is expected to reduce rice prices by up to PhP7.00 per kilo. Notwithstanding, the positive development in the global oil market will also help in tempering consumer prices further over the near term, particularly of energy-related items.
Moreover, NEDA continues to work closely with the entire economic team, especially the BSP, which takes the lead in tightening monetary policy to curb inflationary pressures especially on the demand side. The BSP projects inflation to average at 5.2 percent this year and to ease in 2019 to 3.2 percent.[POLICY]
In terms of policies, NEDA has been on the forefront of several campaigns and advocacies for key reforms that will pave the way for economic growth that is inclusive and leaves no one behind. We anticipate reforms successfully laid out in 2018 to be felt by 2019.
One of these, as mentioned earlier, is the Rice Tariffication Bill. We would like to express our gratitude to our fellow public servants in Congress who heeded our call. Though somewhat slow. We now await the President’s signature before the measure is fully enforced.
Another legislative victory, which hopefully will improve the country’s business climate, is the signing into law of the Ease of Doing Business Act or RA 11032 in May 2018. This measure aims to simplify the requirements and streamlines procedures in starting and opening a business in our country. This hopefully will result in enhanced business competitiveness, lessened bureaucracy, and reduced opportunities for corruption, while more foreign businesses are attracted to invest in the country.
Similarly, the signing of Executive Order No. 65 promulgating the Eleventh Regular Foreign Investment Negative List or RFINL is also a boost to the country’s business competitiveness. Liberalizing more sectors for foreign investment in the country will open the country for new technology and innovation.
With regard to the labor sector, we are also pleased to report that the labor market continues to improve overall.
Unemployment is down to 5.3 percent, which is within the target for the year. Labor force participation of women improved to 47 percent, although it remains behind target. Discouraged jobseekers also declined to 11.5 percent, which was better than the target. Youth Not in Employment nor Education likewise declined to 19.9 percent, well within the target.
However, there were around 826,000 jobs generated in the Fiscal Year 2018, which is slightly below the government’s low-end target.
Youth unemployment continued to remain elevated at 13.3 percent, still higher than the PDP target of 10.4 percent in 2018. The increase in youth unemployment rate to 13.3 percent was mainly due to the 8.9 percent drop in the youth labor force. This is possibly a result of the government’s conditional cash transfer program, as most of the youth who stayed out of the labor force cited schooling as the main reason.[BUILD, BUILD, BUILD]
On infrastructure, the government is making definite progress in its massive infrastructure program, we all know as “Build, Build, Build.” We are certain that the government’s efforts will pay off and we will see improvements in the state of the country’s infrastructure over the medium-term.
Allow me to share that as of end November 2018, 35 out of the 75 infrastructure flagship projects have been approved by the NEDA Investment Coordination Committee or ICC and confirmed by the NEDA Board. These have a total investment requirement of PhP1.54 trillion.
Meanwhile, 31 projects are expected to be approved by the NEDA Board upon the recommendation of the ICC. In terms of project timelines, we expect 31 projects to be completed by 2022. The remaining 44 projects will be completed beyond this administration’s term but may commence implementation during this administration.
Regional development remains the administration’s major thrust. All seventeen regions posted positive economic growth in 2017, with Cordillera Administrative Region recording the highest growth rate, followed by Davao and Central Luzon. Nine regions posted growth higher than NCR’s.
I am also happy to share with you updates on some of NEDA’s accomplishments and initiatives this year.
In September 2018, NEDA was awarded the ISO 9001:2015 Certification for its Quality Management System or QMS for the investment programming service. This means that NEDA demonstrates its ability to consistently provide efficient public service.
Recently, NEDA also adopted a climate change strategy that details agency’s plans to promote sustainable development among agency personnel and its external stakeholders. This is in support of the Global Warming and Climate Change Consciousness Week.
Most importantly, we have the support of Congress in our campaign to institutionalize NEDA as the independent premier economic planning agency of the government. The House Committee on Economic Affairs has recently approved the NEDA Bill. We call on both houses of Congress to immediately pass this measure which we deem crucial in the realization of our ambitions including, AmBisyon Natin 2040.
[OUTLOOK FOR 2019]
Lastly, allow me to share the economic outlook for 2019. If 2018 has not been easy for us, 2019 will not be bereft of challenges as well. The global growth expected to slow down starting next year. The external environment seems to be less supportive of our country’s potential economic growth in 2019.
But the resilience of the Philippine economy in 2018 will likely continue over the medium term. With key reforms scored this year, we expect the performance of the economy to be robust despite domestic and external risks. This will be supported by the “Build, Build, Build” program gaining steam expected next year.
Also, we expect more projects of regional significance to be included in line agency budgets for implementation. This is following the signing of a Joint Memorandum Circular between NEDA and DBM strengthening the link between national planning and budgeting with those of the regions. We expect this move to provide a strong foundation for growth next year.
The Philippines’ hosting of the 30th Southeast Asian Games is also something to look forward to in 2019. We expect a livelier tourism sector next year as a result.
We assure you that we will continue to press reforms in the next years as we have laid out in the PDP. We reiterate our call for the immediate passage of the amendment of the Public Service Act, the Universal Health Care Bill, Coco Levy Bill, and the National Land Use Act.
We urge Congress to pass our budget for 2019 at the soonest possible time. We need this to make sure that we are on track of meeting our development targets.
Finally, allow me to thank my colleagues in government and NEDA, our collaborators in development work, and our development partners for continuing to exert more than what they are asked for.
May our shared vision of a matatag, maginhawa at panatag na buhay para sa lahat, be at the center of our minds, words, and actions.
I wish everyone and your families a Merry Christmas, and a Happy New Year ahead!
Thank you and I hope everyone enjoys the dinner.