Gov’t to focus on infra, jobs to sustain economic growth
To sustain economic growth and make sure it benefits the poor, the government will focus on infrastructure, creating jobs and human capital development this year, said Cabinet secretary for economic planning.
Arsenio Balisacan, director general of the National Economic Development Authority (Neda), spoke at the 3rd Annual Cebu Economic and Investments Forum at the City Sports Club on Friday.
He gave an economic situationer while other presenters discussed growth drivers like the real estate industry and outsourcing.
Increasing foreign investment in manufacturing, tourism and outsourcing is the way to create more jobs for Filipinos and ease poverty in the long run, he said.
Balisacan said the government aims to shift from a consumer-led economy to an investment-led economy which can be achieved by increasing foreign direct investment (FDI).
With the remarkable 6.6 percent posted in Gross Domestic Product in 2012, the economy is expected to expand, he said.
However, Balisacan noted that the poverty rate is still high, which is linked to high underemployment and unemployment.
As of last year underemployment was 20 percent nationwide and slightly higher in Central Visayas at 20.7 percent.
Unemployment was 7 percent last year, lower than the 7.35 percent national level in 2010.
A similar pattern showed in Central Visayas where the unemployment rate improved from 7.6 percent in 2010 to 7.1 percent in 2012.
Balisacan said this underscores the need for jobs which would lead to higher spending capability and achieve more “inclusive” growth.
“According to the World Bank, the Philippines needs 14 million additional jobs by 2016. Based on our data, we need at least 620,000 higher-end jobs to solve underemployment. At that rate, we will need at least $3 billion in investments in tourism, manufacturing and outsourcing,” Balisacan said.
The 6.6 percent GDP in 2012 is expected to range from 6 percent to 7 percent this year, he said and reach 6.5 percent to 7.5 percent the year after in 2014.
Balisacan said the growth was led by the industry and services sector on the supply side while in the demand side it is driven by household consumption and external trade.
“Robust performance of the services sector, which includes trade and real estate, renting and business activities as well as significant in the manufacturing and construction side led the economic growth of the country last year,”said Balisacan.
Based on Neda data, the services sector grew by 7.4 percent which is a 5.1 percent increase from that of 2011.
Industry also grew by 6.5 percent last year from only 2.3 percent in the same period in 2011.
Joel Mari Yu, managing director of the Cebu Investments Promotions Center managing director, emphasized the need to target foreign investors.
Based on data from the Board of Investments, P360.64 billion worth of investments were approved last year. Almost 80 percent of that comes from local investors.
Yu compared figures with Asian neighbors. The Philippines has had $4.1 billion in FDI since 2010, a far cry from Singapore’s $167.08 billion and Thailand’s $25 billion.
Yu said Singapore’s average gross domestic produce per capita nominal is $50,323, the highest in the world, while Philippines is only $2,462.
“Singapore’s case is the result of many FDIs coming in their country. In order to increase the spending capability of the Filipinos, we need jobs for everyone across all skills segments and only foreign investors can do that. Local businessmen don’t need as many as what they employ every year,” Yu said.
According to Balisacan, the government is putting in place more infrastructure projects especially in areas like Central Visayas that is recognized as a tourism and investment destination in the country.
“This is to encourage more investors to come and look at what we can offer them,” he said.
Balisacan said that infrastructure and energy security is also needed to support the country’s growth and improve the cost of doing business.
Investor-related laws are under review aimed at making it easier for investors to do business here, he said.
“We will have to simplify labor regulations, address a skills mismatch through human capital development that can be achieved through quality education and a favorable business environment,” said Balisacan.
Some business leaders welcomed the economic forum, saying it helped them understand better what the government’s thrust are and how businessmen can align their investments with with the direction of the
Stanley Go, vice president of the Mandaue Chamber of Commerce and Industry, and incoming president Lito Maderazo of the Cebu Chamber of Commerce and Industry, said that through the forum, they would know more clearly how how to make their investments matter and register more impact on the country’s economy.
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