During the US-Philippines Society Economic Policy Forum on January 31, 2023, Finance Secretary Benjamin Diokno gave a brief overview on the country’s economic policies and identified key areas of cooperation to advance the diplomatic ties between the Philippines and US.
The US-Philippines Society aims to build on the historical ties between the United States and the Philippines to broaden interaction and understanding through basic and applied research in the areas of security, trade, investments, tourism, environment, history, education, and culture.
The US has been the Philippines’ third largest trading partner and the fourth top source of foreign direct investments in the last six years. The US is also the country’s biggest source of overseas Filipino remittances.
As the Philippines and the rest of the world recovers from the pandemic, Secretary Diokno emphasized the need for a stronger trade engine and international cooperation.
“[T]he Philippines is proud to be part of the Indo-Pacific Economic Framework for Prosperity along with the US and 12 other countries in the region,” he said.
The 14 IPEF partners represent 40 percent of the global gross domestic product (GDP) and 28 percent of the global goods and services trade. IPEF enhances economic stability while offering tangible benefits that fuel economic activity and investment, promote sustainable and inclusive economic growth, and benefit workers and consumers across the region.
Furthermore, Secretary Diokno introduced the Marcos administration’s 8-point Socioeconomic Agenda, which covers the next five years to tackle immediate concerns while remaining supportive of long-term growth. It also serves as the basis for the Philippine Development Plan (PDP) 2023 to 2028, which contains actionable strategies for deep economic and social transformation.
To this end, fiscal discipline must first be established. Therefore, the Philippines’ first-ever Medium-Term Fiscal Framework (MTFF) was approved to outline the country’s fiscal strategy to bring down debt-to-GDP ratio to less than 60 percent by 2025, reduce the deficit-to-GDP ratio to 3.0 percent by 2028, and maintain high investments in infrastructure at 5 to 6 percent of GDP annually.
With this, Secretary Diokno identified agriculture to be a key area of cooperation, saying, “We are also vigorously pushing for digitalization to transform Philippine agriculture into a dynamic, high-growth sector. With the US being one of the world’s major food producers, we see immense potential benefit in having American investments in this area.”
Apart from agriculture, he also identified mining and manufacturing––particularly the semiconductor and electronics industry, which is the top contributor to the manufacturing sector and is the Philippines’ largest export sector.
“Now more than ever, economies must intensify collaboration as the world tackles what is now being called a ‘polycrisis.’ [R]est assured that the Philippines stands ready to broaden dialogue and deepen cooperation through the Indo-Pacific Economic Framework and Asia-Pacific Economic Cooperation,” said Secretary Diokno.
