The National Economic and Development Authority (NEDA) said the Philippines should diversify its sources of growth to ensure the sustainability and inclusivity of economic expansion.
NEDA Secretary Arsenio Balisacan, in an economic forum at the Grand Hyatt Manila in Taguig City on May 22, 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.
Balisacan said while a vigorous services sector may characterize an economy undergoing the usual development pattern, increasing productivity and enhancing the agriculture sector’s competitiveness are critical, given their 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 [high-quality] jobs for the skilled and semi-skilled workforce,” he said.
Balisacan said while regional growth has been favorable, with some regions growing faster than the National Capital Region (NCR) in recent years, the inclusivity of growth from a geographic dimension remained 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 said.
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.
He emphasized the need for enhanced and accessible digital infrastructure, especially in remote areas, low-income households and micro, small and medium enterprises.