MANILA – While the Philippine economy continues to outperform its peers in emerging Asia, the National Economic and Development Authority (NEDA) emphasized that the country must diversify its sources of growth to ensure the sustainability and inclusivity of economic expansion.
In his address at the BusinessWorld Economic Forum held at the Grand Hyatt Manila yesterday, Wednesday (May 22), NEDA Secretary Arsenio M. Balisacan highlighted the country’s present sources of growth, the challenges that constrain the potential of various sectors, and the government’s initiatives to address such challenges.
“On the demand side, it is apparent that our growth has been mainly domestic consumption-driven, with other expenditure components, particularly investments and exports (external demand), contributing to less than half of GDP growth,” he said.
As for the supply side, Balisacan added: “While a vigorous services sector may characterize an economy undergoing the usual development pattern, increasing productivity and enhancing the agriculture sector’s competitiveness is still critical, given its linkages to other industries. Indeed, success in raising agricultural productivity is vital to sustained and inclusive growth. The same can be said for manufacturing, which has traditionally been a source of stable and well-paying (i.e., high-quality) jobs for the skilled and semi-skilled workforce.”
On the other hand, while regional growth has been favorable, with some regions growing faster, on average, than the National Capital Region (NCR), in recent years, Balisacan pointed out that the inclusivity of growth from a geographic dimension remains a challenge.
“Much of our economic growth over the decades is traceable to the NCR and its neighboring regions. Specifically, NCR contributes around one-fourth, while NCR with Central Luzon to its north and CALABARZON to its south collectively constitute more than half of GDP growth,” Balisacan explained.
The country’s chief socioeconomic planner also acknowledged the country’s persistent and widening digital divide, which was further exacerbated by rapid digitalization during the pandemic years. Thus, he emphasized the need for enhanced and accessible digital infrastructure, especially in remote areas, low-income households, and micro, small, and medium enterprises (Read: Policy Note on Open Access in Data Transmission).
Balisacan outlined the government’s responses to these challenges, which includes adherence to the strategies contained in the Philippine Development Plan (PDP) 2023-2028, the country’s medium-term development blueprint.
The NEDA Secretary presented the government’s initiatives to strengthen the country’s investment ecosystem; aggressively promote partnerships between the public and private sectors, particularly, for the rollout of enabling physical and social infrastructure; and improve the ease of doing business to address the concerns of the business community.
He also underscored the continuous efforts of the Marcos Administration’s Economic Team to advocate for next-generation reforms aimed at transforming the production sectors. These legislative priorities include the Konektadong Pinoy Bill, Enterprise-based Education, the Training Framework Act, the Department of Water Resources Bill, the amendments to the Government Procurement Reform Act, and various tax administration and fiscal reforms.
The government’s continued push for a more enabling investment climate is expected to support the flourishing of various industries, leading to the desired and balanced mix of sectors that will drive and sustain the Philippine economy in the years to come.
“So, what are the growth drivers? We are pushing on all fronts. Opportunities across the entire economy abound: in enabling public infrastructure such as energy, water, and physical and digital connectivity, as well as social infrastructure such as schools, healthcare facilities, and housing. We are working hard to create an environment where investments and jobs can thrive in agribusiness, mining, manufacturing, construction, shipbuilding, tourism, education, health, IT-BPM, and creatives,” Balisacan concluded.
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