For the Philippine economy to attain high-income status and eradicate poverty in the long term, it must sustain its high-growth trajectory for at least two more decades, the National Economic and Development Authority (NEDA) said.
In an economic forum of the Economic Journalists Association of the Philippines (EJAP), NEDA Secretary Arsenio M. Balisacan said that rapid poverty reduction can be achieved by sustaining a high level of economic growth. This outcome can also be facilitated by a reduction in inequality of opportunities and a relatively low level of inflation.
“Expanding the economic pie quickly and sustainably leads to more resources for social services like health and education, better infrastructure like railways, ports, roads, and airports, as well as energy, water, and telecommunication networks. These encourage investment and business activity, create jobs, raise incomes, and improve the Filipino’s quality of life,” Balisacan said.
The NEDA Secretary explained that inequality partly determines how responsive poverty reduction is to economic growth.
“The more unequal an economy is, the more difficult it becomes for its members to participate in expanding opportunities made available by growth. In other words, in a highly unequal society, growth is likely to be exclusive, with the wealthier segments of the population reaping most of the gains,” he said.
Balisacan also emphasized how high inflation can dampen prospects for poverty reduction, especially as different segments of the population exhibit different expenditure patterns for essentials like food.
“I want to add that food inflation, especially, is a primary determinant of poverty simply because food constitutes a more significant proportion of the expenditure of poorer households,” he said.
The economic managers of the Marcos Administration aim to lower poverty incidence from 18.1% of the population in 2021 to a single-digit level by 2028. This target is to be attained by reducing poverty incidence by five percentage points by 2025 and reducing it further by another four percentage points by 2028.
The NEDA Secretary also stated that the most binding constraints to job creation and business investments in the country must be addressed to achieve this target.
“The attainment of the poverty targets depends on income growth and the quality of growth, whether the growth also generates opportunities, particularly employment, for the less well-off individuals and households. Opening more and better-quality jobs sets the pace of household income growth. Job creation is, in turn, dependent upon businesses’ short- and long-term investment decisions. Therefore, it is imperative that we quickly and efficiently address the binding constraints that limit, hamper, or discourage investments and job creation in this country,” he emphasized.
The country’s inadequate infrastructure is seen to be upgraded through Public-Private Partnerships or PPPs. This is intended to boost the competitiveness of domestic industries and encourage more investments in growth drivers such as manufacturing, tourism, IT-BPOs, and the creative sectors.
Held at the Marble Hall of the Ayuntamiento de Manila in Intramuros on August 17, 2022, the EJAP Economic Forum gathered members of the economic team and the media to discuss the Marcos Administration’s priorities and plans for the economy.