The Philippines should diversify its economic drivers and boost investments to create a more robust and resilient economy, according to the National Economic and Development Authority (NEDA).
NEDA said the strategic approach aims to future-proof the Philippine economy against a backdrop of global uncertainty.
NEDA Secretary Arsenio Balisacan said in a presentation to the Economic Journalists Association of the Philippines (EJAP) Mid-year Economic Forum Monday that while the economy consistently demonstrated robust growth, it had relied on household consumption and services to fuel its expansion over the years.
Unlike its regional neighbors such as Vietnam, Thailand and Malaysia, the Philippine economy depended less on two crucial pillars—investments and exports.
“While we continue to buoy consumption and enhance services, we must reinvigorate the other pillars of economic growth—investment and exports, particularly manufacturing and agribusiness—to sustain growth and make it more resilient in the years and decades to come,” Balisacan said.
He said the steady decline of the manufacturing sector’s share in the gross domestic product (GDP) had a detrimental impact on the poverty reduction efforts. He stressed the importance of the export and manufacturing sectors, which offer stable, regular and well-paying jobs for unskilled or semi-skilled workers.
“What this analysis of our economic structure indicates is that our economy’s dependence on one pillar of growth—final consumption on the demand side and services on the supply side—limits its capacity to generate high-quality jobs through investment, access trade-facilitated innovations and modern processes as foundation for productivity growth, and seize opportunities for growth from the rapidly expanding markets beyond the country’s shores,” Balisacan said.
He identified the major reforms and policies that the government has been implementing or pursuing to create an enabling policy and regulatory environment conducive to investments. The country’s economic managers remained optimistic about the country’s prospects as they expect these initiatives to bear fruit in the coming months and years.
Balisacan assured the public that while new challenges and risks emerge, the country’s fundamental development problems are, for the most part, well-understood.
“Thus, you may have noticed that the theme that runs across our presentations remains the same: first, that we have built on the hard-won reforms of past administrations and the key elements are already in place; and second, that the Philippine economy has never been more ready to take off and realize its immense potential across all of these growth drivers,” Balisacan said.
Balisacan underscored the importance of focusing the government’s efforts to sustain the economic momentum and concluded by offering three directions for the tasks ahead.
“We must: one, stick to our plan and vision, even as we are guided by the past; two, strategically recalibrate when circumstances require us to do so; and; three, work hard on the things that will bring about the largest impact with the limited time that we have,” he said.
