Thought leaders from government, the academe and industry examined the Philippine economic outlook for 2019 in the Pilipinas Conference organized by independent think tank Stratbase ADR Institute in Makati City.
Dindo Manhit, president of Stratbase ADRi said: “A balance between strategic engagement and strategic retreat is imperative for managing the economy and steering the country’s development. In short, state-market synergy is key to address the primordial concern of a developing nation like the Philippines.”
“Poverty reduction and labor expansion should be prioritized to demonstrate the presence of inclusive growth. The volatile growth of the manufacturing sector in relation with the service sector reveals an indeterminate improvement for labor. In turn, poverty reduction cannot simply be addressed through dole-outs. Reducing poverty undeniably necessitates both political and economic reforms”, Manhit said.
Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo said in his keynote speech “reforms have helped propelled the economy to an impressive streak of 79 consecutive quarters of uninterrupted growth.”
“That means 19 years and three quarters since the first quarter of 1999. Moreover, the structural reforms have been translated into higher potential output for the economy,” he said.
“Our estimates show that potential output growth has been rising, averaging 6 percent for the period 2010 to 2017. So the talk about the large output gap is without basis. Our output gap is either a small positive or a small negative. So, the issues about overheating is quite misplaced,” Guinigundo said.
Calixto Chikiamco, president of Foundation for Economic Freedom said that the country failed to achieve its target of reducing poverty incidence to 17.2 percent by 2015 and instead hit 21.5 percent.
“The slowdown in overseas Filipino workers remittance growth, innovations to business process outsourcing sector, import growth far outpacing export growth, and declining Government International Reserves are among the challenges of rising current account and trade deficit,” Chikiamco said.
Dr. Raul Fabella, professor emeritus at the University of the Philippines School of Economics compared economic growth as the “new normal versus old normal” and said that the Philippines experienced an average GDP growth rate of 4.8 percent in the past 8 years and only 4 percent in the last three decades where growth of services exceeded that of manufacturing.
He observed that in the second year of Duterte administration, growth in manufacturing slowed down and hoped that this won’t persist as manufacturing is relatively linked to poverty reduction.
“Inclusion as poverty reduction fares better when manufacturing growth exceeds services growth in low-income countries,” Fabella said.
George Barcelon, chairman of Philippine Chamber of Commerce and Industry said: “Government must be consistent of the law in order to entice conglomerates. Basically, improving infrastructure and providing a blueprint to go outside of Metro Manila, for example, the New Clark City.”
“What the country needs is to uplift the SMEs. Ease of doing business, power facilities can help SMEs to propel the growth of countries. Government should focus on both education and skills training, which is crucial for economic growth and what causes us for being uncompetitive,” Barcelon said.
