Economic Planning Secretary
2013 Year-End Media Briefing
17 December 2013, 12:30 pm
NEDA Board Room
We are thankful for your presence today as we culminate a year that bannered great milestones our economy has achieved, witnessed man-made and natural disasters, and capped with inspiring stories of support from fellow Filipinos and from many countries across the globe.
Despite these challenges on the domestic front and the uncertainties in the global economy, we remained strong and focused on ensuring that we are taking the right path towards inclusive growth. We are even optimistic that this robust growth will continue next year as we carry on the policies and programs that deliver sustained growth, and fire up new initiatives that will bring our fellowmen in Central Visayas to recovery and reconstruction.
So, allow me to go through some of the high as well as low points 2013 has brought us to.
Exactly a year ago, when we gave our economic prospects for 2013 in a similar gathering, we forecasted that our growth would be 6.0 to 7.0 percent. This, we stressed, would be driven by a more vibrant industry sector, particularly an improved manufacturing sector. Construction, steered by the commencement of major public infrastructure projects and booming private construction, was also expected to grow robustly this year.
We are maintaining this growth target of 6.0 to 7.0 percent this year despite all the devastation brought by the earthquake and typhoon Yolanda in Visayas. Third quarter GDP results show that we are on our fifth consecutive quarter in terms of achieving growth of at least 7.0 percent. This growth was buoyed by the expansion in consumer spending, higher business and consumer confidence, favorable interest rates, stable inflation, strong inflows of overseas Filipinos remittances, high inbound tourism, and an optimistic domestic economic outlook.
These strong macroeconomic fundamentals did not remain unnoticed. As a result, the country has managed to increase its competitiveness rankings and receive investment grade status from credit-rating agencies.
However, our experience of rapid growth is still short. The challenge is to sustain it and improve the economy’s capacity to generate remunerative jobs.
Employment and Poverty
Speaking of jobs, the latest round of Labor Force Survey shows that although employment figures improved a bit in October, there is still a need to sustain efforts that facilitate the substantial creation of decent and quality employment. Also, the recent disasters experienced in Visayas confirm that we need to have a strong disaster risk-management program to mitigate the impact of weather disturbances on employment, particularly in agriculture where almost a third of our workers are.
The problem of quality employment is closely linked with our longstanding problem of high poverty incidence. As the National Statistical Coordination Board (NSCB) reported early this month, there was a slight drop in poverty incidence in 2012 as compared to 2009. Although the decline was slow, we are still taking it as an indication that our fight to reduce poverty remains a work in progress.
These twin problems of poverty and unemployment require more than just five quarters of impressive economic growth. Structural transformation is necessary, that is, to manoeuvre the economy from one that is household consumption-driven, fuelled by remittances, to one that is increasingly investment-led and employment-oriented. Revival of manufacturing and creation of new drivers of growth must be coupled with investment in human capital and innovations and the development of logistics and infrastructure. These will not only drive us to a higher growth trajectory but will also create high-quality employment opportunities and substantially reduce poverty.
Recovery Assistance on Yolanda
The recovery of areas affected by super typhoon Yolanda has also been our major consideration for this year and in the medium term. The completion of Reconstruction Assistance on Yolanda (RAY) plan signals the beginning of a full-blown recovery and reconstruction of the economy, lives and livelihood in the typhoon-affected areas. The intention mainly is to restore the economic and social conditions of these areas at the very least to their pre-typhoon levels and to a higher level of disaster resilience.
RAY provides a framework for implementation, including sequencing of interventions, and key policy assumptions. The implementation strategy that underpins RAY is phased, cumulative, and flexible. It is designed to take rapid action to address critical immediate needs and to develop and implement a full set of recovery and reconstruction interventions over the short to medium term.
Economic Outlook for 2014
Taking into consideration all of these developments in the Philippine economy, including those on the external, monetary, and fiscal fronts, we expect GDP growth to hit the upper limit of our growth target for 2013. Without all these crises, we could have achieved 7.3- to 7.5-percent growth this year. For 2014, we forecast growth to be in the 6.5 to 7.5 percent range.
Although losses in agriculture resulting from Yolanda devastation is expected to reduce growth in the first quarter, reconstruction efforts are presumed to contribute to growth, particularly the rebuilding of shelter and other public and private infrastructure in the affected areas.
Furthermore, the Philippine Development Plan Midterm Update contains our strategies from 2014 to 2016 that aim at sustaining, if not surpassing, our growth performance in the past three years. With spatial and sectoral dimensions as imperatives, the strategies of the Updated Plan include building credible institutions, equalizing development opportunities, completing asset reform implementation, creating new growth drivers, improving resilience to natural disasters, and accelerating infrastructure development.
The recent challenges reminded us that we need to go beyond economic growth. We need to work even harder to ensure that our gains are robust enough to overcome threats and risks, especially those that imperil livelihood and sources of growth.
Again, thank you for coming today and we wish our country a Merry Christmas and a prosperous 2014!