The Philippine National Economic and Development Authority (NEDA) has underscored the need to improve the macroeconomic competitiveness by closing the infrastructure gap and maintain high levels of public investments in human capital.
This was stressed by Economic Planning Secretary Arsenio Balisacan on Wednesday during an economic briefing on human capital development and infrastructure at the Philippine International Convention Center (PICC).
“Infrastructure capacity needs to be continuously upgraded to support current and future growth. Let us commit to maintaining the coherence of masterplans, making sure to build on previous gains,” said Balisacan.
He noted that various masterplans have been formulated to guide the development and implementation of infrastructure projects and other development interventions.
“We need to ensure the availability of a healthy, highly trainable and skilled labor force and we need to produce more innovators and entrepreneurs.”
Balisacan said the country faces a demographic window of opportunity where demographic dividends can be reaped.
He cited studies estimate that demographic transition was responsible for about one-third of the economic growth experienced by East Asia’s economic “tigers” during the period 1965 to 1995.
“Our own studies, however, show that if we revert the business as usual practices we may not be able to realize as much demographic dividend as our neighbors did.”
“The support ratio is the number of effective workers to the number of effective consumers, where each worker or consumer is weighted according to age-specific income or consumption.”
Balisacan explained that an increasing trend of the ratio means that more income can be saved or spent for higher consumption.
He also noted that there is still a high unmet demand for reproductive health care, which results in unplanned births, particularly for the poorest 30 to 50 percent of Filipino families and must be remedied by fully implementing the Reproductive Health Law.
“Structural transformation is now happening, from low value added to higher value added activities. This must be further facilitated and there must also be a deliberate strategy to prepare the workforce for structural transformation, so that growth would be inclusive.”
“We must continue investing in socioeconomic resiliency, while at the same time promoting more sustainable production and consumption patterns including disaster preparedness, income diversification, social protection and insurance.”
Balisacan cited the importance of strengthening and improving the nation’s institutions, including political ones, as these play a critical role in the development process.
“A peaceful and credible transfer of power in 2016 to a new administration which can sustain the reform initiatives of the present government is particularly important. Achievement of lasting peace in Mindanao will likewise be critical in reaping the growth potential of that region and lifting millions of our countrymen out of poverty.”
He also stressed the need to develop and implement a structural reform agenda that will result in an environment that promotes healthy competition, fosters and rewards innovation and encourages entrepreneurship.
“If we get it right this time, sustained gross domestic product (GDP) growth of about 7% yearly could bring us to higher middle-income economy status with gross national income (GNI) per capita of $4,125 by the end of the next administration,” Balisacan added.