Manila, 30 September 2015 – The country’s top economic officials presented strategies to further pursue development of human capital and infrastructure, which they said should help the Philippines hop on to the next stage of progress.
Over the past five years, the Philippines has become one of the fastest growing economies in the world due to rising investments and consumption on the back of improved fundamentals and better governance.
Economic managers say the Philippines can graduate to a stage where economic growth is even faster, is sustained for the long-term, and is more inclusive.
This is because the Philippines is said to be within the “demographic window” starting this year until 2050. This window is a period when a great majority of the population are of working age and, as such, there is chance for productivity to further accelerate.
Based on estimates, countries that enter the demographic window post an average growth of 7.3 percent for the first 10 years of entry to the window.
But in order for the Philippines to actually seize the opportunity, there should be good quality of workforce and attractive investment climate. The latter requires, among others, sufficient infrastructure.
During the 28th Philippine Economic Briefing (PEB) with the theme “Shaping Our Future,” which was held on September 30 at the Philippine International Convention Center, Governor Amando Tetangco, Jr. of the Bangko Sentral ng Pilipinas said investing in human capital and infrastructure development, together with institutionalizing good governance, serve as good foundation for further progress.
“In order to move us forward and on a higher economic growth trajectory, we need to make even more specific steps to further institutionalize governance, raise human capacity, and build infrastructure,” Tetangco said in his opening remarks.
Finance Secretary Cesar V. Purisima said the Department of Finance, as chair of the Economic Development Cluster, is committed to a whole-of-government approach to developing human capital and improving infrastructure.
“Our partnership with the people is the ultimate PPP (Public-Private Partnership). Leveraging our continually rising budgets for education, health, and infrastructure is a sure-fire way to optimize our demographic dividends. This is the investment we pay forward for future generations,” Purisima said in a statement.
”We are projected to be Southeast Asia’s biggest economy by 2050; investing in our own people and infrastructure will ensure we have one that is inclusive and sustainable,” the finance chief added.
Economic Planning Secretary Arsenio Balisacan said the structure of the Philippine economy is changing for the better, given improved governance and implementation of prudent policies. He said investments in human capital development should coincide with this.
“Structural transformation is now happening, and this must be further facilitated by preparing the workforce,” Balisacan said. “We owe it to ourselves to get it right this time,” he added.
Balisacan said that if the Philippines seizes the opportunity brought about by the demographic window, it has the potential of sustaining GDP growth of at least 7 percent year-on-year, which could bring the economy to a higher middle income status with gross per capita income of $4,000 by the end of the next administration.
He also said sustaining that pace of growth for three more administrations could bring the economy to high-income status with gross per-capita income of $12,700 dollars by 2040.
Improving the quality of workforce is high in the agenda of the Aquino administration. In pursuit of human capital development, the following are some of the projects and programs cited during the economic briefing: substantial increase in annual budget for health and education, curriculum reforms to better meet industry requirements, technical skills development, and expansion of the Conditional Cash Transfer (CCT) program.
The government’s budget for education has grown year after year from P225.1 billion in 2010 to P453.0 billion in 2015. The budget for health services has leaped from P31.0 billion to P96.3 billion over the same period.
Moreover, the budget for the Conditional Cash Transfer (CCT) program, which encourages school attendance among children from poor households, has also consistently risen. It stands at P62.3 billion this year compared with P10.9 billion in 2010.
“This administration would be noted in history as one that has actually provided that increase in the budget that will allow the education department to actually implement the programs that hopefully bring the graduates that industry needs,” Education Secretary Armin Luistro said in one of the panel discussions.
Meantime, on infrastructure development, details of the Transport Roadmap were presented by Noriaki Niwa, chief representative to the Philippines of Japan International Cooperation Agency (JICA), during the economic briefing. The roadmap includes establishment of road networks and expressways, subways, railways, and other transportation systems for Metro Manila and surrounding areas up to 2030.
The Transport Roadmap is meant to ease mobility and ensure sufficient infrastructure to meet the requirements of a growing population and rising business activities in the covered areas.
It seeks to achieve “5 NOs” for Metro Manila and surrounding areas: (1) no traffic congestion, (2) no household in hazardous conditions, (3) no barriers for seamless mobility, (4) no excessive cost burden for low-income groups, and (5) no air pollution.
“The Transport Roadmap, which used to be called a “Dream Plan,” is no longer just a dream; it is already part of the roadmap of the Philippine government,” Secretary Rogelio Singson of the Department of Public Works and Highways said in the panel discussion on infrastructure development.
Singson said most of the road projects under the Transport Roadmap are already in various stages of development either through the Public-Private Partnership (PPP) program or through government funding.
With the comprehensive components of the Transport Roadmap, its implementation is expected to significantly decongest Metro Manila and surrounding areas, and to support sustained growth in business activities.
Besides government’s economic managers, private-sector representatives also served as resource persons during the economic briefing. They were: Maria Ressa, chief executive officer of Rappler; Jose Arnulfo Veloso, president and chief executive officer (CEO) of HSBC Philippines; Nico Jose Nolledo, CEO of Xurpas, Inc.; Rodrigo Franco, president and CEO of Manila North Tollways Corp.; Mary Jane Alvero Al-Mhadi, CEO of Geo Science Laboratory; and Andrew Acquaah Harrison, chief executive advisor of GMR Megawide Cebu Airport.
JICA’s Niwa also served as a member of one of the panels during the event. JICA was the government’s partner in developing the Transport Roadmap.
The Philippine Economic Briefing is a flagship activity of the Investor Relations Office (IRO) aimed at providing macroeconomic updates and discussing issues confronting the government’s priority sectors.