55th Philippine Economic Society Annual Meeting
Growing Amidst Risk and Uncertainty
November 08, 2017
Ernesto M. Pernia
Secretary of Socioeconomic Panning
This administration’s work mode may be characterized by: (a) continuity from previous administrations of policies, programs and projects, as appropriate and warranted; and (b) raising the sense of urgency, and ratcheting up the tempo of work and determination for faster delivery of results and services long awaited by the citizenry, particularly those at the margin.
To illustrate, regarding policies, we are carrying on the sound macroeconomic policies and the Ambisyon Natin exercise pursued or initiated by the previous administration. And doing more, e.g., the CTRP, vigorously promoting S&T and innovation, and full implementation of the RPRH law toward reaping the demographic dividend sooner. As regards projects, we’re completing unfinished (or unstarted) projects on a 24/7 work regimen, e.g., skyways to NAIA and the entertainment city, Harbor link road to NLEX, Tutuban-Malolos railway, NLEX-SLEX connector road, and Bohol Panglao International Airport.
Such continuity may be reflected at the macro level in sustained economic growth: 6.9% in 2016, and 6.4% and 6.5% in Q1 and Q2, respectively, this year despite post-election effect. We anticipate higher growth rates in the remaining two quarters owing to accelerated public spending, stronger merchandise and service exports, and sharply better agricultural performance. For 2017, we expect growth to fall around the mid-range of our target of 6.5-7.5%. We aim to raise this target to 7-8% for next year and, hopefully, till 2022. (The drivers of growth along with possible risks and uncertainties are discussed in a longer presentation.)
Besides accelerating growth, the economy is undergoing structural transformation. No longer is growth led by consumption, investment is expanding faster on the demand side; on the production side, industry (including manufacturing) is becoming a relatively important driver as well vis-a-vis the service sector. In other words, the sources of growth are more diversified.
Total factor productivity has been the fastest rising in ASEAN, as high 3.3% on average in recent years (2010-2014, based on APO computations) and 1.48% (2010-2016, based on The Conference Board estimates).
The foregoing positive trends — (a) secular uptrend in economic growth (since the early 1980s at 2%); (b) structural transformation of the economy; and (c) the rise in TFR — suggest that economic growth is sustainable, barring, of course, truly destructive/disruptive events.
However, while the macroeconomy appears robust, regional inequality remains and chronic poverty persists. Nothing less than a determined and resolute regional and rural development strategy will redress this egregious inequality. For instance, just three regions — NCR, Calabarzon, and Central Luzon account for nearly 2/3 of GDP; and NCR’s income per capita is 13-fold that of the poorest region, ARMM.
This is the strategic focus of the current administration. How to come to grips with inequality and poverty is a central theme of the Philipine Development Plan (PDP) 2017-2022 that’s anchored on the President’s 0-10 point Socioeconomic Agenda. Among the main policy instruments are physical infrastructure development in regional hubs throughout the county to connect bypassed regions to the mainstream economy; coupled, of course, with investments in human capital. We have a list of 75 game-changing/life-changing projects, as well as 5,600 minor projects throughout the country.
A concrete example of a minor project is the unheralded additional 570-meter two-lane road (cum flood control) from the Q.C. Elliptical Road westward to EDSA, costing Php. 62 million. Inaugurated by the DPWH and NEDA Secretaries just last Friday (11/3/17), this used to be an “estero” occupied by informal settlers who have been properly relocated.
Towards further continuity, PDP 2017-2022 is intended to be the first of four PDPs geared to achieving the long-term vision of Filipinos, now popularly known as Ambisyon Natin, for a “matatag, maginhawa, at panatag na buhay”.
This has become a cliche, which requires another cliche expression, battle cry or appeal. Which is that to achieve our Ambisyon Natin, you’ll agree with me that we need the cooperation of everyone, i.e., all sectors of society, whichever shade of color may be each one’s favorite!
Thank you. Mabuhay tayong lahat. Mabuhay and economiya ng Pilipinas!