The economic adviser of President-elect Rodrigo R. Duterte is confident that the incoming administration can equal—or even beat—the growth figures in the six-year term of President Aquino, to be fueled by peace and order, and equitable spread of infrastructure spending throughout the country.
“An average of 6 percent to 7 percent is achievable in the next six years, with law and order in place,” Dr. Ernesto M. Pernia told the BusinessMirror on the sidelines of a forum hosted by the Australia-New Zealand Chamber of Commerce late Wednesday.
The University of the Philippines School of Economics professor emeritus said that with peace and order at the top of Duterte’s national agenda, foreign and local investors will be encouraged to direct their capital even outside of Metro Manila.
“There’s plenty of room for investments outside of NCR [National Capital Region], or in Calabarzon [Cavite, Laguna, Batangas, Rizal, Quezon]. Given peace and order, the investment climate there will be more favorable,” Pernia added.
A significant contributor of growth will also be the rebalancing of infrastructure spending, which, as observers have pointed out, is highly concentrated in Metro Manila and Luzon.
“We don’t want to reduce the amount of infrastructure spending here, but in terms of share, the budget for infra budget in other regions should go up,” he noted.
The BusinessMirror earlier reported that the Three-year Rolling Infrastructure Program has pegged a budget of over P3 trillion for infra spending from 2017 to 2019. At least P1.15 trillion of the amount will be allocated for 2017.
Pernia credits the optimism of Duterte’s camp for continued robust growth to the incoming administration’s “action-driven” and “results-oriented” approach to issues.
“Our problem is this vicious patience. What we need is virtuous impatience. If people are impatient, they will demand services from the government and things will get done. That is the character of the new president,” Pernia said.
The country’s average GDP growth from 2010 to 2015 was 6.2 percent. On Thursday the government announced that the economy grew 6.9 percent in the first quarter, but mainly driven by election spending.
“It’s not a good indicator; it’s fueled by election-related spending,” Perry Lim Pe, Management Association of the Philippines president, said in a text message.
Philippine Exporters Confederation Inc. President Sergio Ortiz-Luis Jr. agreed that the robust growth is just a reflection of the seasonal drive of sudden government spending, and may likely last until the second quarter of the year.
“The 6.9 percent is a very consumption-driven growth, as reflected by the growth of manufacturing, services and election spending. I would not be surprised if we do better in the second quarter, because this is where the private spending will be reflected,” Ortiz-Luis said, adding that reaching a 7-percent growth is possible in the second quarter.
However, Ortiz-Luis said the decline in agriculture growth in the first quarter is a bothersome sign that points to misdirected spending.
“This growth is more of an accident. Agriculture growth was negative so where [growth] really matters, it’s a failure.”
“The El Niño is part of it, of course. But we’ve always had that problem. Mali talaga ang spending pattern,” he remarked, underscoring the need for agriculture to be at the front and center of the incoming administration’s agenda.
Agriculture growth registered a 4.4-percent contraction in the January-to-March period, the fourth straight quarter the sector slipped into negative territory. Lawmakers challenged the Duterte administration to sustain, if not surpass, the economic growth under the Aquino administration.
Party-list Rep. Rodel Batocabe of Ako Bicol said, that while the economic growth is understandable because of spending brought about by the national elections abetted by the good economic fundamentals implemented by the Aquino administration, “we do hope that the growth rate will be maintained by the Duterte Administration since its economic agenda is not a drastic shift from that of the current administration.”
Duterte already said his eight-point agenda is a continuation of economic policies of the Aquino administration.
Liberal Party Rep. Winston Castelo of Quezon City said the economic development has confirmed the viable economic direction pursued by the Aquino government, saying even Duterte has acknowledged the accomplishment “when it said it would not change the current economic policies.”
“Of course, elections spending has propelled the economic growth for the first quarter of 2016. But we have to give credit to the sound economic policies and fundamentals we have been pursuing over the last six years. The construction subsector, for instance, continues to post unprecedented growth rate due to heavy infrastructure
spending,” he said.
“The same with the services sector, which has been on an upswing due to the expanding business-process outsourcing subsector. These two subsectors have more than offset the losses in the agriculture, which has been reeling from the adverse effects of El Niño,” Castelo said.
Nationalist People’s Coalition Rep. Sherwin Gatchalian of Valenzuela, meanwhile, said that, considering China’s economic slowdown, the 6.9-percent growth is good news for the country.
“But there is still a lot of room to grow for the next administration. Agriculture is a low-hanging fruit. We should invest in agriculture and boost output,” added Gatchalian.
Liberal Party Rep. Romero Quimbo of Marikina said the current economic growth shows all the more “the need to ensure that the current economic policies be continued by the Duterte administration.” “I can’t wait for the second-quarter figure. I am certain it will be even higher.”
(With Jovee Marie N. Dela Cruz)
1 comment
dream on. a lot of us are scared to move on, threatened by a dictatorship and the looming communist in government agencies. they will finally distribute lands, there will be an upset of balance in the agricultural sector, that’s only a start. can Philippine agriculture compete? southeast Asian integration will present options for the investor. They will surely wait and see.