The Philippine industry sector is projected to grow the fastest this year as manufacturing and private construction are expected to gain momentum with the economy targeted to grow by 6.6 to 7.7 percent, according to the National Economic and Development Authority (NEDA).
Socio-economic Planning Sec. Arsenio Balisacan told members of the Management Association of the Philippines (MAP) that public construction will pick up in 2014 as government addresses infrastructure bottlenecks and spearheads reconstruction efforts in the areas affected by the disasters last year.
“The service sector is expected to remain robust as business process management, real estate, renting, and business activities are targeted to grow by an average of 9 percent beginning 2014,” said Balisacan.
On the supply side of the economy, growth will be driven by more vibrant manufacturing, buoyed by food and chemical manufactures, garments, and wood furniture and fixtures.
Balisacan expects a robust construction led by the public sector as the government starts with the construction of major infrastructure projects and intensifies reconstruction efforts in disaster-affected areas.
Other growth drivers are domestic and local tourism development, upbeat wholesale and retail trade, and robust business process management (BPM) that would fuel the fuel the growth in the real estate, renting, and business activities sector, and agribusiness.
Sec. Balisacan said that on the demand side, the economy will be buoyed by the following growth drivers: fixed capital formation mainly due to higher public construction, robust private investment in construction and durable equipment; strong household consumption due to better employment opportunities, strong remittance inflows, and improved consumer confidence; stronger export of services with good prospects on business process management; and improvement of external trade conditions.
“Since achieving high economic growth is necessary but not sufficient for inclusive growth, we aim for a substantial improvement in the labor and employment situation in the country. Our goal is to reduce the unemployment rate from 7.0 percent in 2012 to 6.5 to 6.7 percent in 2016.”
Balisacan stressed that the government is committed to improving the quality of employment as reflected in the reduction of underemployment rate from the current 20 percent to about 17 percent in 2016 and in the structural transformation of the economy, particularly toward high income and employment growth drivers in industry, agribusiness, and services.
“The twin problems of poverty and unemployment require no less than sustained high economic growth, deliberate programs and policies to enable the poor to participate in the growth process and reduce vulnerabilities to shocks.”
The government target is to reduce income poverty to 18 to 20 percent by 2016 will fall short of the Millennium Development Goals (MDGs) target of 16.6 by 2015, said Balisacan.
“This new target takes into consideration the slow response of poverty to economic growth beginning 2006 and the setback in 2013 due to the wide-scale destruction resulting from natural and man-made disasters.”
With this updated Philippine Development Plan (PDP), the government’s goal up to 2016 is to sustain if not surpass the growth performance in the past three years.
Sec. Balisacan is confident that the government could take advantage of available opportunities such as improving global economic environment and demographic conditions, increased integration of the ASEAN Economic Community and more financial resources available.