Arsenio M. Balisacan, PhD
National Economic and Development Authority
Saturday News Forum
Dapo Restaurant, Quezon City
17 December 2022 | 10:00 AM
Members of the media,
Ladies and gentlemen, good morning.
Yesterday, the President, together with members of the National Economic and Development Authority (NEDA) Board and the whole Cabinet, met to discuss and act on two critical items: the approval of the Philippine Development Plan (PDP) 2023-2028 and the endorsement to the President of the Executive Order which extends the temporary reduction of tariff rates on swine meat, corn, rice, and coal.
The NEDA Board, chaired by the President, has approved the proposed Philippine Development Plan (PDP) 2023-2028 and has instructed the NEDA to proceed with its finalization. As the country’s development roadmap, the PDP elaborates on the strategies that shall guide the country’s economic and social policies and programs, including legislative priorities, for the next six years. It also contains annual sectoral targets, which we will monitor, to ensure proper plan implementation.
To recall, some of these socioeconomic targets include:
- Annual real GDP growth of 6.0%-7.0% in 2023 and 6.5%-8.0% from 2024 to 2028;
- Headline inflation and food inflation of 2.5%-4.5% in 2023 and 2.0%-4.0% from 2024 to 2028;
- Reduction of unemployment to 4.0%-5.0% in 2028 from an average of 5.4% in 2022 while increasing the share of wage and salaried workers in private establishments from 49.6% on average in 2022 to 53.0%-55.0% in 2028;
- National government debt stock to GDP ratio reduced to 48.0%-53.0% in 2028 from 63.7% in 2022; and
- Poverty incidence reduced from 18.1% in 2021 to a single-digit level of 8.8%-9.0% in 2028.
Through a whole-of-government and whole-of-society approach, the NEDA, together with other government agencies and stakeholders, has ensured that the Plan is anchored to the AmBisyon Natin 2040, the country’s long-term vision, with the 8-Point Socioeconomic Agenda of the Marcos Administration serving as the unifying framework for the next six years.
Ready for implementation, the Plan aims to transform our production and social sectors and create an enabling landscape through our institutions and environment. Cross-cutting strategies will facilitate this transformation. These strategies include:
- Digitalization of government processes and public services;
- Improving the local and global connectivity of our markets and the integration of leading and lagging regions;
- Servicification or building ICT, creatives, tourism, and logistics ecosystems around manufacturing clusters;
- Building a dynamic innovation ecosystem;
- Harnessing the private sector’s resources, technologies, and potential for scale economies through public-private partnerships (PPPs); and
- Ensuring the effective devolution of critical social services to local governments.
We shall deliver the final version of the PDP 2023-2028 by the end of this year and officially launch it to the public in January 2023.
Our economy remains robust, supported by strong domestic demand and an upbeat labor market. Recall that our third quarter GDP growth was 7.6%, while the unemployment rate fell to 4.5% in October 2022. However, the Marcos Administration remains vigilant over the consequences of global headwinds as we head into the new year. Persistent inflation – recorded at 8.0% in November 2022 – remains a challenge because of its adverse effects on the purchasing power of households, especially the poor. The key to tempering these effects is to ensure food security in the short and long term through timely importation and addressing long-standing supply-side constraints in agriculture value chains.
In this regard, the Executive Order on the extension of reduced tariffs on the subject commodities of meat of swine, corn, rice, and coal, was also endorsed by the NEDA Board yesterday. The extension will provide relief to poor and vulnerable segments of the Filipino population whose welfare is reduced because of high inflation. Through this policy, we shall augment our domestic food supplies, diversify our sources of food staples, and temper inflationary pressures arising from supply constraints and rising international prices of production inputs due to external conflict. The extension of the tariff reduction for pork, corn, and rice is up to 31 December 2023, while that for coal goes beyond this date and will be subject to review every semester.
Amidst a subdued global economic outlook in 2023, we anticipate favorable economic conditions for the Philippines in the near term. These include the expected reopening of China’s economy, moderating global oil prices, easing of aggressive monetary policy tightening, and sustained remittance inflows. We are determined to steer the Philippine economy to meet the 6.0% to 7.0% economic growth target for 2023, as set by the NEDA Board’s Development Budget Coordination Committee or DBCC. With the government strategies and interventions outlined in the PDP, we are confident our socioeconomic targets are achievable.
To address the constraints to growth and inclusion identified by the PDP, we will need to ramp up investment. In the past six months, the Marcos Administration has worked hard to address the private sector’s concerns through key policy and regulatory reforms and securing commitments from domestic and international investors, especially in critical infrastructure which has long been identified as a significant binding constraint to growth. With the implementation of the amended economic liberalization laws and the policy thrust for public-private partnerships, we can expect to generate more quality jobs that will help us achieve inclusive growth – that is, growth that sustainably and rapidly reduces poverty.
Investments in key infrastructure projects will be supported by innovative finance. With sufficient governance safeguards to ensure the fund’s sustainability and responsible management, the proposed Maharlika Investment Fund will help support our country’s infrastructure development. This support includes investments in logistics and transportation networks critical to supply chains, especially for the agriculture and manufacturing sectors.
With the Marcos Administration’s Economic Team members, I reiterate my strong support for creating the Maharlika Investment Fund as a complementary vehicle to help us attain the objective of rapid but inclusive and sustainable economic development. Such an objective underpins the Philippine Development Plan (PDP) 2023-2028 and the AmBisyon Natin 2040. We commit to working with our Legislature to put in place the necessary features of, and conditions for, a successful investment fund that will best serve the interest of the Filipino people.
I remain confident of the country’s solid economic position. The Economic Team is steadfast in our commitment to sustain our hard-won gains as a country. This thrust entails not just the continuity of reforms but the progressive achievement of our development ambitions as our nation reaches greater heights. We will continue to shepherd our country to full recovery and inclusive economic and social transformation.
Thank you, and I look forward to answering your questions.
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