ERNESTO M. PERNIA
Socioeconomic Planning Secretary
2016 NEDA Year-end Media Briefing
15 December 2016, 11:00 am
NEDA Board Room, Pasig City
To our friends from the media, colleagues in NEDA, ladies and gentlemen, good morning.
Welcome to the NEDA Year-end Briefing, I am very happy to see you all today as we gather to look back at the year that is coming to a close.
Before anything, I would like to formally introduce you to the new officials of NEDA—Undersecretary Adoracion Navarro and Assistant Secretary Mercedita Sombilla who now head the NEDA Regional Development Office, Assistant Secretary Carlos Bernardo Abad Santos who is our new Assistant Secretary for Policy and Planning, and Undersecretary Jose Miguel Dela Rosa, who unfortunately couldn’t be here today, now heads NEDA’s Central Support Office.
In June this year, President Rodrigo Duterte ushered in a new administration, ready to build on the gains that were initiated by the previous administration, so we want to carry them on because they are good gains. As you know, the Philippines has been a high-performing economy with record-breaking GDP growth rates, declining poverty rates, and improving employment numbers.
I am honored and awed to be serving the country as Socioeconomic Planning Secretary, and to be working with competent individuals comprising the NEDA to sustain the momentum of the economy and address remaining gaps and development challenges.
Shortly after his assumption, President Duterte unveiled his 0-10 point Socioeconomic Agenda. I call this the Alpha and Omega of development, with peace and order as the bedrock. This will guide and focus our economic policies and plans for the next five years. This list of priorities includes maintaining current macroeconomic policies, instituting progressive tax reform, improving the ease of doing business in the country, accelerating infrastructure spending, developing the regions and rural areas, improving social protection, and managing population through promoting and fully implementing reproductive health and responsible parenthood, among others.
Seeing how it promotes inclusive development covering the realms of fiscal, economic, social, cultural and regional development policy, we are thus anchoring the 2017-2022 Philippine Development Plan on this Socioeconomic Agenda and the AmBisyon Natin 2040, the long-term vision of the country, which NEDA had initiated in 2015.
This year has been a good year for the economy. Allow me to briefly walk you through what happened in 2016.
As you very well know, the Philippines remains as one of the fastest-growing economies in Asia today, faster than China, Vietnam, Indonesia, and Malaysia. With a 7.0 percent GDP growth in the first three quarters, we are sure to achieve, if not surpass, our target of 6 to 7 percent growth for the whole of 2016.
On the demand side, household consumption as well as investments in construction, public infrastructure and durable equipment drove economic growth. This was supported by low inflation, low interest rates, better labor market conditions and the steady growth in the remittances of our overseas Filipino workers. Government assistance such as the Pantawid Pamilyang Pilipino Program, or 4Ps, also provided additional boost to consumer demand.
From the supply side, we see the agriculture sector starting to recover, finally breaking five consecutive quarters of decline. Growth in industry, particularly manufacturing, construction and utilities, accelerated. The services sector likewise improved overall, with stronger expansion in trade, finance, real estate, and public administration.
With such good growth performance, we are setting our GDP growth target next year to between 6.5 and 7.5 percent.
As reported recently, we are pleased to see a more measurable decline in poverty in recent years, from 25.2 percent in 2012 to 21.6 percent in 2015. This not only shows that sustained growth is important, but also indicates that the government’s programs, like the Conditional Cash Transfer Program, are gaining traction. To accelerate poverty reduction, we will not cease to fight for the full implementation of the Responsible Parenthood and Reproductive Health or the RPRH Law. We need the law’s implementation so we can take advantage of the demographic window we are in and to make women productive members of the labor force. If this is fully implemented in the next 5 years, we can substantially curb poverty incidence to 13-15 percent by 2022, helping us achieve our poverty reduction target of 1.5 percent per anum.
Also, the Philippine labor market is in better shape, as employment rate as of October 2016 is at 95.3 percent. This means that there 41.7 million Filipinos employed. Unemployment rate also declined to a record low of 4.7 percent. The growth of our economy is truly becoming more inclusive it appears, engaging more and more Filipinos to participate in the labor market.
However, considering that one-third of our labor market remains vulnerable to external shocks, we must continue to work to improve local infrastructure, and link the agriculture sector with industries to help raise the productivity of farmers and increase the value of their products. We will also strengthen linkages among the academe, technical education institutions, and industries to equip students with competencies essential to thrive in today’s competitive work environment and make informed career decisions.
As we all know, infrastructure stands as one of government’s main thrusts. Secretary Diokno is very exuberant about the future, and calls this term as the Golden Age of Infrastructure. President Rodrigo Duterte has made clear that his administration will keep a deliberate focus on developing the regions through connective infrastructure. That is why we are ramping up public infrastructure spending next year, allotting at least 5.0 percent of GDP to go to infrastructure projects, until 2022.
Since June this year, the NEDA Board has already met twice, and has so far approved 17 projects. Among several, these approved projects include Phase I of the Metro Manila Flood Management Project, the EDSA Bus Rapid Transit Project, the Plaridel Bypass Road Project, the New Cebu International Container Port Project, the South Line of the North-South Railway Project, and the New Nayong Pilipino at Entertainment City plus other agricultural and regional development projects. If you look at the 17 approved projects, many of them are projects located outside Metro Manila.
Along this line, one of NEDA’s initiatives to promote and accelerate infrastructure development in the country is the Three-Year Rolling Infrastructure Program, or TRIP. It is a consolidated list of all infrastructure programs of the government, identifying immediate priorities to be undertaken in three-year periods. This is a joint project with the Department of Budget and Management, and it will ensure budget support for projects that are in the pipeline. It will also assure that once an infrastructure program has been planned and rolled out, it will continue to receive funding from the government.
This year, the NEDA also launched the Public Investment Program Online System, or PIPOL, which is an online database for government projects. Included in this database are comprehensive details of government projects, plus their status updates.
Also, last September, USAID officially turned over to NEDA the AidData Project, a web-based mapping tool that monitors the distribution and impact of donor assistance to government programs and projects in the Philippines.
This year, the NEDA Board also approved to streamline ICC review procedures for minor changes in scope, design, cost, and extension of implementation or grant validity of projects. To improve the process, approvals of these projects will now be delegated to the level of the ICC, the Department of Finance, and the NEDA Secretariat, as applicable, based on existing laws, rules and regulations.
Meanwhile, you might have already read about the various state visits the President and his Cabinet conducted this year.
In September, we attended the 71st United Nations General Assembly in New York City. During the UNGA, the Philippine government reaffirmed its commitment to address multidimensional poverty, to implement the Sustainable Development Goals, as well as to protect the rights of migrants.
Late this year too, I along with several Cabinet members accompanied President Duterte on his trips to China, Japan and Peru. It was a very fruitful series of trips as the Philippines has now opened more opportunities for trade and investment to a market of 1.8 billion people across the ASEAN region. This is line with our desire for closer integration in Asia through regional economic rebalancing and diversifying our foreign economic relations.
In fact, during the President’s state visit to China last October, the Philippine government was able to close a US$100 million contract for fruit exports to China, along with the lifting of the Chinese ban on Philippine bananas and mangoes. Russia also committed to import around US$2.5 billion worth of Philippine fruits, grains, and vegetables in the next twelve months.
Our chairmanship of the ASEAN Summit next year will be a perfect opportunity for the Philippine government to forge more partnerships with our neighbor countries.
Outlook for 2017 and Beyond
All things considered, our economy’s continuing strong growth, decreasing poverty, lower unemployment rates, and new foreign investments this year are all good signs of things to come.
Together with a low inflation environment, sustained strong growth will pave the way for continued and faster poverty reduction. We see this momentum continuing next year and hopefully in the years to come.
However, this will have to be supported by sustained and deepened reforms. These include the comprehensive tax reform program being finalized by the Department of Finance, sustained investments in infrastructure, easing of restrictions on foreign investments, reduction of cost of doing business, and strengthening agro-industrial linkages, and of course the full implementation of the RPRH Law.
Moreover, high economic growth will mean nothing if the welfare of the poor and marginalized is not improved. Thus, along with increased investments in human capital to improve access to economic opportunities, we will continue to prioritize agricultural development within the broader framework of rural and regional development.
The NEDA is currently drafting the Philippine Development Plan 2017-2022, which we plan to release by early February next year. This is the first medium-term development plan to be anchored on AmBisyon Natin 2040, which envisions the Philippines as “a prosperous, predominantly middle-class society where no one is poor; where our people will live long and healthy lives, be smart and innovative, and will live in a high-trust society.”
With the overall objective of laying down a strong foundation for inclusive growth, a high-trust society and a knowledge-based economy, the PDP is employing strategies based on the three main pillars of the long term vision. These are “Malasakit” or solidarity and enhancing the social fabric, “Pagbabago” or real transformation that reduces inequality, and“Kaunlaran” or increasing potential growth and sustaining it. It will thus focus on regional development, infrastructure, agriculture development, and culture, all strategies consistent with the long term vision, the administration’s 0-10 Point Socioeconomic Agenda, and the UN’s Sustainable Development Goals.
While we have a long way to go, we are off to a very good start. We hope that the public maintains its trust in government, realizing that real prosperity comes when both the private sector, including the citizenry, and the public sector work hand in hand, despite political differences. After all, as we can glean from AmBisyon Natin 2040, we Filipinos have many things to unite around and these include enabling Filipinos to enjoy matatag, maginhawa at pantag na buhay.
Our motto ought to be, “unity in diversity,” or perhaps “diversity towards unity, toward a common purpose.” I am looking forward to working and walking with you again next year. Let us all enjoy the holidays, and I wish everyone and ourselves a merry and blessed Christmas, and a happy and prosperous new year.