Philippine Development Forum - Paderanga (as Delivered)

8/11/2019 Philippine Development Forum - Paderanga (as Delivered)

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Development partners, representatives from civil society and co-workers

in government, good morning. I will be presenting the key strategies

outlined in the countrys Philippine Development Plan for 2011 to 2016.


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I will go through first the Philippine economic performance, look at the constraints,

and talk some key program and strategies in the Philippine Development Plan.


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As a background, the countrys economic growth performance has been

moderate and uneven and well below the postwar growth rates of

several high performing Asian economies. With population still

increasing at more than 2 percent per year, real per-capita incomes

have risen only by about 20 percent from 1981 to 2009. In

comparison, per capita income increased four-fold in Malaysia, and five-

fold in Thailand. In addition, absolute mass poverty was basically

eradicated in these countries.


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The persistently weak economic performance means corresponding

high unemployment rates and many Filipinos living below the poverty

line. Moreover, the economic gains have not been broadly shared as

shown by the high inequality ratios.


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Growth, in short was not inclusive, because it failed to create enough

jobs and reduce poverty for the majority of Filipinos.


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Why is inclusive growth elusive? There are deterrents to inclusive

growth.


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First is INADEQUATE INVESTMENT. The Philippines poor investment

record helps explain the lack of productive opportunities in the country.

Investment is less than savings, even at very low interest rates.

Inadequate infrastructure and glaring gaps in governance

are some of the critical factors affecting capital accumulation and

technological progress.

An inefficient transport network and unreliable and costly power supply

have been identified as the most significant infrastructure constraints.

Weak institutions and governance failures hindered investments. The

country continues to suffer from a reputation of having an inefficientbureaucracy, excessive red tape, and widespread corruption. In the

2011 Doing Business ranking, for example, the Philippines placed 156

out of 183 countries.


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Second is JOBLESS GROWTH. The countrys unemployment rates

have remained high, averaging 10 percent in 19902005 and 7.5

percent in 2006-2010 compared to China, Malaysia and Thailands 4

percent or below during the same period.

Labor market fragmentation, limited information about employment and

skill availability, along with complex labor laws and regulations resulted

in high unemployment and underemployment.

The low employment intensity of economic growth also resulted in

economic activity along dual lines --- between a large-scale, capital-

intensive, and highly organized sector, and a small-scale, labor-intensive, informal sector, with a sparse middle section. This has stifled

the expansion of firms and reinforced the concentration of firms in the

first group.


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Fourth is LOW GAINS FROM TRADE. The Philippine export

performance in terms of share to GDP is not as vibrant compared to

other emerging economies in East Asia.


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Recognizing these constraining factors, the new administrations

envisions a country that has achieved inclusive growth, which is

characterized as high, sustained and broad-based. This is enunciated in

the 16-point agenda of PresidentAquinos Social Contract with the

Filipino People.


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To achieve inclusive growth, the governments efforts shall focus on

three broad strategies that will effectively address poverty and create

massive employment opportunities.

First is ATTAINING A HIGH AND SUSTAINED ECONOMIC GROWTH

Second is EQUALIZING ACCESS TO DEVELOPMENT

OPPORTUNITIES

And third is IMPLEMENTING EFFECTIVE AND RESPONSIVE SOCIAL

SAFETY NETS


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High and sustained economic growth will provide productive and decent

employment opportunities.

For 2011 to 2016, we are targeting a higher annual growth of 7.0 to 8.0

percent.At these growth rates and given the right policies, economic gains will

translate into higher per capita income and effectively reduce poverty.


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And thirdly, responsive social safety nets will catch those who are left

behind by the character of a high sustained growth. Likewise, in

recognizing the devastating effects of climate change in the future,

social safety nets that support and capacitate vulnerable sectors are

necessary to address poverty.


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These broad directions will be fleshed out in the 2011-2016 Philippine

Development Plan, and the Medium-Term Public Investment Program.


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We will implement a more responsive Philippine Development Plan

(PDP) and we look forward to our development partners to continuously

support our priorities by aligning to our development strategies.


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There are ten chapters in the Plan that lay out strategies, policies and programs

to attain inclusive growth within the medium-term. These are the following:

The first one, of course, is the introductory chapter that provides the general

framework.

Chapter 2 is Macroeconomic Policy, which aims to flesh out policies towards

ensuring macroeconomic stability. This requires addressing the narrow fiscal

space and being able to get on a sustainable revenue-and-spending path.

Chapter 3 is on Competitive Industry and Services Sectors. It identifies the

strategies that will raise the levels of investment and entrepreneurship,

especially among micro, small and medium enterprises.

Chapter 4 is on Competitive and Sustainable Agriculture and Fisheries. It aimsto raise productivity and incomes in the sector, among others.

Chapter 5Accelerating Infrastructure Development aims to provide safe,

efficient, adequate, reliable, cost-effective, and sustainable physical

infrastructure. The government will engage in PublicPrivate Partnerships

(PPPs) through more responsive guidelines and policies and attractive terms

for the private sector.


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Chapter 6 - Towards a Dynamic and Resilient Financial System. Itidentifies strategies that could properly address the challenges thatcontinually beset the Philippine financial system.

Chapter 7 is on Good Governance and the Rule of Law. It highlights theneed for effective and honest governance through effective publicservice, zero tolerance for graft and corruption, and strong respect forthe law.

Chapter 8 is on Social Development. It primarily aims to improve thelives of all Filipinos through equitable access to adequate and qualitysocial services and assets.

Chapter 9, on Peace and Security, proposes strategies for the peace

process and national security.

The final chapter, Chapter 10, is on Conservation, Protection andRehabilitation of Environment and Natural Resources towardsSustainable Development. It proposes policy initiatives for theenvironment in the context of emerging issues such as global warmingand climate change.


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Broadly, these chapters are focused on the following key programs and

strategies

First, BOOSTING INDUSTRY COMPETITIVENESS TO GENERATE

MORE EMPLOYMENT.

This strategy aims to improve the ability of Philippine industries to be

competitive in a sustainable manner. The provision of vital infrastructure

and expansion of logistics chains, combined with a reversal change in

the governance regime, is bound to elicit a strong positive response

across all classes of entrepreneurs and financiers.

Work arrangement mutually agreed upon shall also be introduced.


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Employment creation will also be pursued indirectly by supporting

activities that utilize the countrys comparative advantage in more labor-

intensive activities. These activities typically involve products and

services that are more competitive in the world market.

Likewise, exports can be an important means of obtaining technological

know-how. These technological externalities generate positive spillover

effects to other sectors in the economy, which redound to faster

accumulation and innovation, and therefore accelerated growth.


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The second key strategy is to IMPROVE ACCESS TO FINANCING.

A reliable and efficient financing is important to address the evolving

needs of a diverse public.

The government shall prioritize defining a clear credit policy framework

and its corresponding credit delivery strategy.

Public financing programs for MSMEs, cooperatives and others will be

strengthened.


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Wider self-employment opportunities shall be afforded by providing

credit-access to the poor through microcredit provision that is integrated

in a business-service package.

Likewise, savings generation will be facilitated through the use ofalternative products and delivery of financial services in underserved

and unserved areas of the country. These financial services include

electronic banking, micro insurance, implementation of the Credit Surety

Fund Program (CSF), agent banking and use of non-bank financial

institutions as delivery channels.


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Third is MASSIVE INVESTMENT IN PHYSICAL INFRASTRUCTURE.

Investment in infrastructure prioritizes the creation of integrated and

multimodal national transport and logistics system.


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Hindered by a record of perennially large budget deficits, government

shall generate funds for infrastructure investment through better tax

collection and more rational budget allocation hence the fiscal and

budgetary reforms discussed in Chapter 2.

However, government funds may not suffice given its need to

immediately focus on social development and poverty-alleviation . For

this reason, the government relies on the public-private partnership

(PPP) scheme to implement the bulk of its infrastructure program.

Development partners can help to structure bankable projects through

sustainable project development financing and provide support to

improve enabling framework and strengthen government institutions.


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Fourth is TRANSPARENT AND RESPONSIVE GOVERNANCE. The

next two slides show how transparent and responsive governance will

be achieved.

Underpinning inclusive growth are institutions that promote

transparency, accountability, the rule of law, and effective and impartial

performance of the regulatory function of government, as discussed in

Chapter 7 and across all chapters.


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Good governance and strong institutions provide tremendous help in

bringing down the cost and risks of doing business.

We hope there will be sharing of best practices and external services.We also hope that policy notes on emerging issues will be generated.


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Fifth is to DEVELOP HUMAN RESOURCE THROUGH IMPROVED

SOCIAL SERVICES.

Investment in human capital is key to sustained and broad-basedgrowth. This entails equitable access to basic social services, strong

social safety nets, and social protection.

Concrete objectives and programs which are basically geared towards

the attainment of the Millennium Development Goals (MDGs) are

spelled out in Chapter 8.

We count on your support for the effective delivery of social services.

We also hope to harness partnerships for the achievement of the

MDGs. Through these partnerships, we look forward to knowledge-

sharing on successful development approaches in other countries

especially in MDG targets where the Philippines is lagging.


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The plans broad thrusts of job generation, massive infrastructure

development, higher governance standards, human development and

human capital formation and direct poverty-relief would not succeed if

complementary strategies do not support and enhance their impact.

These strategies can prosper only in a macroeconomic regime of low

inflation and sustainable fiscal balances as explained in Chapter 2.

As discussed in Chapter 10, ensuring ecological integrity and mitigating

the effects of climate change is essential for success on several fronts.

Natural disasters and calamities can damage physical infrastructure,

endanger human lives and health, and destroy livelihoods, particularlyamong the poor and vulnerable. The chapters priority, therefore, is to

devise and adopt measures that mitigate the potential impact of

environmental factors.


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Finally in Chapter 9, the end of armed conflict and the attainment of

lasting peace is vital to breaking the vicious cycle of conflict and

underdevelopment in affected areas that have otherwise huge potential

for social and economic development.


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After the Plan, we will work on the Medium-Term Public Investment

program. This will identify the programs and projects that will implement

the Plan.

Thank you for participating in this forum, and we look forward to your

continuing support for the success of the Plan. Good morning.

Documents

Philippine Development Forum - Paderanga (as Delivered)