By Francis Allan L. Angelo
The National Economic and Development Authority (NEDA) emphasized the need for the Philippines to diversify its sources of economic growth to ensure long-term sustainability and inclusivity.
During the BusinessWorld Economic Forum held at the Grand Hyatt Manila on May 22, NEDA Secretary Arsenio M. Balisacan highlighted the current economic landscape and the government’s strategies to address key challenges.
ECONOMIC CHALLENGES AND STRATEGIES
Balisacan noted that while the Philippine economy continues to outperform its peers in emerging Asia, it remains heavily reliant on domestic consumption.
“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.
On the supply side, Balisacan emphasized the importance of boosting productivity in the agriculture and manufacturing sectors.
“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 jobs for the skilled and semi-skilled workforce,” he added.
REGIONAL AND DIGITAL DISPARITIES
Balisacan also pointed out regional disparities, with much of the economic growth concentrated in the National Capital Region (NCR) and its neighboring regions.
“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,” he explained.
Additionally, the widening digital divide poses a significant challenge. The rapid digitalization during the pandemic has exacerbated inequalities, particularly affecting remote areas, low-income households, and micro, small, and medium enterprises. Balisacan stressed the need for enhanced and accessible digital infrastructure to bridge this gap.
GOVERNMENT INITIATIVES
The government is addressing these challenges through the Philippine Development Plan (PDP) 2023-2028, a medium-term development blueprint. Key initiatives include:
-Strengthening the Investment Ecosystem: Promoting partnerships between the public and private sectors for infrastructure development and improving the ease of doing business.
-Legislative Reforms: Advocating for reforms such as the Konektadong Pinoy Bill, Enterprise-based Education, the Training Framework Act, the Department of Water Resources Bill, amendments to the Government Procurement Reform Act, and various tax and fiscal reforms.
Balisacan concluded, “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.”
