BORACAY, AKLAN—The Philippines is the lead economy to prepare analytical framework papers on structural reform for inclusive growth and the role of structural reform on services to help shape discussions in the forthcoming Structural Reform Ministerial Meeting (SRMM) to be held in Cebu City in September.
Five themes were agreed upon by the Economic Committee during the meeting held on May 16, 2015 at the Shangri-la Hotel in Boracay. These are 1.) Structural Reform for Inclusive Growth; 2.) Structural Reform and Innovation; 3.) Structural Reform and Services; 4.) Tools for Structural Reform; and 5.) New Directions for Structural Reform in APEC.
“The theme on inclusive growth is very much aligned with our national priority as it is the country’s overarching goal based on the Updated Philippine Development Plan 2011-2016. Services on the other hand is one of the country’s key initiatives as we advance the APEC Services Cooperation Framework (ASCF) during this hosting year,” said Assistant Director-General Rosemarie G. Edillon, who sat as the Philippine senior official for the Economic Committee.
In a separate APEC Economic Committee seminar, NEDA highlighted the need for governments and the private sector to do things differently to make growth inclusive as a way to escape the so-called “middle income trap.” The term is used to refer to a situation where an economy is no longer considered in the low-income category but is taking too long to graduate to high-income status.
The Philippines is joined by Peru and Japan in preparing the paper on Structural Reform (SR) for Inclusive Growth, and by Australia and Peru for Structural Reform and Services.
“For the inclusiveness theme, we are presented with the challenge of developing policy frameworks for assessing the impacts of structural reform on inclusive growth and vice versa. Definitely, we need to define inclusive growth and develop statistical tools that will enable us to do the assessments and analysis,” said Edillon.
Meanwhile, the Economic Committee pointed out that trade in services is faced by unique barriers that are in many cases regulatory in nature. If a regulation is too restrictive and prescriptive, then it will hinder innovation.
“These barriers may be addressed through structural reforms that allow people, goods, and resources to flow more easily within and across countries. The ministers could explore how such structural reforms can promote competition, especially within the services industry,” said Edillon.
“Structural reform is really about having policies that facilitate the efficient allocation of resources. In terms of our theme, inclusiveness, one can think of how structural reform can address the constraints to enable a lot more to participate in the growth process, both domestically and globally. For example, the services sector can benefit from less restrictions and improved regulatory regimes, especially that it holds a lot of potential for creating employment,” said Deputy Director-General Emmanuel F. Esguerra, who is the head of the Philippine delegation for the APEC Second Senior Officials’ Meeting (SOM2).
The Philippines also joined the United States and Australia in drafting the paper on the New Directions for Structural Reform in APEC, following the request of the private sector during the Economic Committee-Private Sector Roundtable Discussion on Structural Reform held on May 17, 2015.
“The private sector lobbied that the group working on New Directions have a developing country with them, especially one that has much experience in the agriculture and fisheries sector. Thus, we are happy to join the group and give our inputs in the development of the paper,” said Edillon.
Meanwhile, China, Chinese Taipei, Russia, and New Zealand will work on the theme on innovation, while the United States, Hong Kong, Mexico, and Chinese Taipei will collaborate on the theme Tools for Structural Reform.
Rory Mcleod, chair of the Economic Committee, explained that the approved themes are for the ministers to discuss during the SRMM and the papers will inform their responses.
“With Secretary Balisacan to chair the SRMM in September and keeping in mind the country’s domestic priorities, the Philippines is very well-placed to lead and be heavily involved in the discussions on an APEC post-2015 Structural Reform agenda,” said Esguerra.