Arsenio M. Balisacan, PhD
National Economic and Development Authority
#AskNEDA Media Briefing
December 19, 2022
Astoria Plaza, Pasig City | 10:00 AM
Friends from the media,
Fellow NEDA officials and colleagues,
Ladies and gentlemen, good morning.
First, to the media members, I thank you for attending this briefing. I am very grateful for your support to the National Economic and Development Authority (NEDA) this 2022. Let us continue working together to keep the Filipino public well-informed of the policy issues affecting our country as we pursue our socioeconomic goals.
The past year saw our economy steadily recover from the impact of the COVID-19 pandemic. After two years of restricting movement and commercial activity, the country successfully reopened our economy while effectively rolling out the public vaccination program to mitigate risks of infection and death. Five successive quarters of negative gross domestic product (GDP) growth beginning in the first quarter of 2020 were followed by six consecutive quarters of robust expansion (at least 7.0%) from the second quarter of 2021 to the third quarter of this year. In 2022, recall that we have thus far been able to attain an average GDP growth of 7.7%, which puts us on track to meet the annual 6.5% to 7.5% growth target.
The country’s employment situation improved as unemployment fell to 4.5% in October 2022 from 7.4% in October 2021. In addition, the underemployment rate decreased to 14.2% from 16.1% during this period. In particular, we observed significant gains in the construction and services sectors where the impact of mobility restrictions was felt hardest.
Thus, we see that consumption on the demand side and services on the supply side continue to fuel our economy’s growth. The lifting of restrictions on establishments for food and leisure, transportation facilities and tourist destinations, and educational institutions supported strong spending and broadened employment opportunities.
The improvement of our employment figures is especially critical as we continue to combat high inflation, which presently stood at 8.0% in November of this year, bringing us to a year-to-date headline inflation rate of 5.6% at the national level. We have provided targeted assistance to our population’s poor and vulnerable sectors to help them cope with rising prices of basic needs such as food and transportation. Enabling income-generating employment opportunities is a more sustainable manner of mitigating the effects of inflation, which is why the reopening of our economy was and continues to remain a critical strategy for our recovery.
High inflation has been and may continue to be driven by a confluence of factors that we monitor and address. These include:
- The continuing external geopolitical conflicts raising the prices of oil and fertilizers;
- Lower local food production due to the reduction of our supplies owing to African swine fever (ASF), avian influenza, and typhoons;
- The depreciation of the peso increasing the cost of our food and energy imports;
- Non-tariff barriers preventing timely importation whenever local production falls short of consumption; and
- Second-round effects due to fare increases and wage hikes.
The lingering uncertainties and challenges, which include monetary tightening worldwide, have caused slowdowns and are expected to result in recessions among developed countries and slower growth for emerging economies such as the Philippines.
Mindful of these challenges, the NEDA, the country’s premier socioeconomic planning body, has ensured the timely completion of the Philippine Development Plan (PDP) 2023-2028 this year. The NEDA Board, led by President Marcos, approved the Plan in last Friday’s meeting with the Cabinet. We thank those who participated in the extensive consultation process we initiated in the past several months. The inputs from various sectors, including the youth, local planners, legislative staff, and the private sector, have been invaluable in putting together a coherent and well-designed plan that will bring us closer to our collective long-term vision, the AmBisyon Natin 2040.
The timely adoption of the PDP as the country’s development roadmap shall ensure the alignment of government resources, programs, projects, and activities along with the identified strategies that will enable us to achieve our desired socioeconomic objectives. In light of our limited fiscal space, I cannot overemphasize how critical coordination is to obtain the maximum impact from our policies.
Later, you will see the specifics of the PDP’s defining features. Broadly, the Plan fleshes out the details of the Marcos Administration’s 8-point Socioeconomic Agenda by laying out policies, programs, and legislative priorities for the next few years.
The Plan will address short-term issues such as protecting people’s purchasing power, mitigating the socioeconomic scarring in human capital, and ensuring that vulnerable population segments are provided targeted assistance. Meanwhile, we will address binding constraints to growth and inclusion in the medium term. In particular, the PDP focuses on strategies upgrading our mobility and connectivity infrastructure, securing energy and water supplies for industries, and creating an enabling regulatory environment for the participation and expansion of the private sector as an engine of growth, high-quality job creation, and innovation.
Ultimately, the Plan’s goal is to reinvigorate job creation and accelerate poverty reduction by steering the economy back to its high-growth path and, more importantly, effect economic transformation toward a prosperous, inclusive, and resilient society. The NEDA will work closely with the implementing agencies, the Legislature, and other stakeholders to ensure the Plan’s successful implementation.
Along with the crafting of the 8-Point Socioeconomic Agenda and the formulation of the PDP, the NEDA and its attached agencies have also achieved the following accomplishments in 2022:
- We facilitated the timely organization of nearly all the Regional Development Councils or RDCs to ensure stronger policy alignment at the national and regional levels;
- We amended the implementing rules and regulations of the Build-Operate-Transfer (BOT) Law to create a more enabling regulatory environment for public-private partnerships (PPPs);
- We convened the Legislative-Executive Development Advisory Council (LEDAC), which adopted 32 priority bills as part of the Common Legislative Agenda (CLA); and
- We continue to implement the Philippine Identification System (PhilSys) through the generation of physical and electronic copies of the National ID.
Looking ahead to 2023, we aim to:
- Steer and coordinate the implementation of the PDP 2023-2028 while finalizing the Regional Development Plans, the Public Investment Program (PIP) for 2023-2028, and the Three-year Rolling Infrastructure Plan (TRIP) for FY 2024-2026;
- Monitor the implementation of these plans by conducting socioeconomic surveys and coordinating with the responsible agencies in generating the 2023 Socioeconomic Report and Regional Development Reports for 2022;
- Pursue major national projects, including PPPs in critical infrastructure, and ensure their programmatic appraisal through the NEDA Board’s Investment Coordination Committee (ICC);
- Complete the registration of 92 million Filipinos to the PhilSys;
- Push for the passage of the remaining 30 bills in the LEDAC CLA;
- Issue the National Innovation Agenda and Strategy Document 2022-2032 to jumpstart and guide our country’s initiatives to improve its innovation ecosystem; and
- Conduct a comprehensive review that will lead to adopting a five-year Most-Favored Nation (MFN) Tariff Structure.
Despite the headwinds we face, the Economic Team of the Marcos Administration remains confident of our prospects in the near term. A robust domestic economy, propelled by sustained consumption and investment, will be key to attaining the 6.0% to 7.0% growth target for 2023. We aim to accompany this expansion with headline and food inflation rates of 2.5% to 4.5% and an unemployment rate of 5.3% to 6.4%. We expect poverty incidence to fall to about 16.2% in 2023 from its 2021 level of 18.1%.
Together, we must build on and sustain our hard-won gains as a nation. This imperative comes as we aim to recover and secure our position among the most dynamic economies of Asia and the world. Filled with hope for the coming year, we assure you of our unwavering commitment to stay the course and tirelessly work toward attaining our vision of a matatag, maginhawa, at panatag na buhay for all Filipinos.
On that note, let me greet all of you, happy holidays, and I wish you all a prosperous new year!
Thank you, and good morning.