Economist gives tips on growing economy
Invest in agriculture and infrastructure.
Develop Small and Medium Enterprises (SMEs).
Open the country to foreign investors.
These are strategies that economist Bernardo Villegas of the University of Asia and the Pacific (UAP) suggested the Philippines should adopt to strengthen the economy.
He said the Philippines has ceased growing and has been trapped in the “middle income” category for a long time.
“The Philippines was at par with Japan in economic growth way back but we have already been left behind. To ensure more growth, these are the three things we can do,” said Villegas, who gave a midyear economic briefing for businessmen last Friday at the Casino Español in Cebu City.
The country should focus investments in agriculture, which is the country’s natural advantage, he said.
“Infrastructure development should also be continued to support agriculture and all other ‘sunrise’ industries like mining, tourism, IT-enabled services and more,” he said.
Other “sunrise” industries were identified as transport, telecommunication, fashion, fun or entertainment, furniture, consumer durables, logistics, retail and education.
Villegas encouraged investing in small and medium enterprises, which comprise 99 percent of businesses in the country. This is one of the best solutinos for unemployment, he said.
“SMEs are the foundation of our development and not the giant conglomerates. SMEs also encourage more inclusive growth that will benefit not only the rich but the poor,” he said.
A third strategy is to open the country to foreign investors.
“It is important that we don’t limit our investors so that we can encourage more investments here,” he said.
Otherwise Vietnam, which was at par with the Philippines, would surpass the country, he warned.
Villegas said he believes the country’s economy could achieve a 7 percent to 10 percent growth this year.
“This is why we need to open up. Why do we not allow foreign nationals to own land and properties here? Will they bring the land to their country when they go home?” he asked.
At present, the Philippines has the lowest investment rate of 17 percent among Southeast Asian countries, he pointed out.
“I’m, however, glad that the National Economic and Development Authority (Neda) has drafted the Philippine Development Plan for 2011. And it has included as one of its strategies for growth the increase of investment rate from 17 percent to 26 percent,” said Villegas.
