Inclusive growth
for a more competitive Philippines
ARSENIO M. BALISACAN
Socioeconomic Planning Secretary and Director-General National Economic and Development Authority
3rd Anniversary Celebration, Philippine Council for Industry, Energy and Emerging Technology New World Hotel, Makati June 28, 2013. 9:30 am
Growth Rates of GDP by Industrial Origin
1st Quarter 2012 and 2013 and Annual 2011-2012 (at constant 2000 prices)
Industry 1st quarter Annual
2011-12 2012-13 2010-11 2011-12
GROSS DOMESTIC PRODUCT 6.5 7.8 3.6 6.8
Industry sector 5.3 10.9 1.8 6.8
a. Mining & quarrying -1.7 -17.0 7.0 2.2
b. Manufacturing 6.0 9.7 4.7 5.4
c. Construction 1.5 32.5 -9.8 15.7
d. Electricity, gas and water
supply 8.5 0.1 0.6 5.1
Agri., Hunting, forestry and
fishing 1.1 3.3 2.6 2.8
Service sector 8.4 7.0 4.9 7.6
Source: NSCB
Employed Persons by Major Industry Group and Industry Subsector, Philippines
April 2012 and April 2013
Major Industry/Industry Subsector April 2013 April 2012
EMPLOYED PERSONS, Number (in thousands) 37,819 37,840
Agriculture 11,844 12,468
Industry 6,083 5,859
Services 19,893 19,513
Source: NSO
Employed Persons by Hours Worked in the Week Prior to Survey, Industry sector, Philippines
April 2012 and April 2013 (In percent)
Hours Worked in a Week (Industry sector) April 2013 April 2012
Industry 100.0 100.0
Less than 40 hours 19.7 34.3
40 hours and over 79.4 64.0
With a job, not at work 1.0 1.7
Mean hours worked 44.2 39.9
Source: NSO
Share of Total Investment to GDP
37 35 35
32 33
35
23 24 25
21 22
19
26 27
30 39
29
23
0 5 10 15 20 25 30 35 40 45
2010 2011 2012
India Indonesia Malaysia Philippines Thailand Vietnam
Source: World Economic Outlook, April 2013
Poverty and inequality remain high
Measure 2009 Sem 1 2012 Sem 1
Poverty headcount 28.6 27.9
Ratio of average income of top decile to bottom decile
22.5 22.2
Philippine GDP is dominated by 3 regions in Luzon
62.4%
10.8%
12.8%
14.1%
NCR, Regions 3&4A Rest of Luzon
Visayas Mindanao
Regional shares to GDP growth, 2011 (in %)
GDP growth vs. poverty reduction in EAP developing countries
77
65
54 56
51
36 36
28
17 14 12
$0.00
$1,000.00
$2,000.00
$3,000.00
$4,000.00
$5,000.00
$6,000.00
$7,000.00
0 10 20 30 40 50 60 70 80 90
1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2010
Poverty headcount ratio at $1.25 a day (PPP) (% of population) GDP per capita, PPP at constant 2005 international $
East Asia and the Pacific (developing only)
Source: World Development Indicators, World Bank
The Philippines’ growth has been lagging behind some of the EAP countries for the past decades
-2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0
1981-1990 1991-2000 2001-2011
China Indonesia
Malaysia Thailand
Vietnam Philippines
Ave GDP per capita growth rate (%),
Source: WDI
Sources/Notes:
1/UNESCAP 2009 Statistical Yearbook; based on Below US$1.25 per Day (www.unescap.org/stat/data/syb2009/) Philippine Data:
Official NSCB Estimates
*Philippine official estimates, NSCB 2009
Percentage of Poor Population1/
Gini concentration ratios, Philippines
0.49 0.48 0.48
0.00 0.10 0.20 0.30 0.40 0.50 0.60
S1 2006 S1 2009 S1 2012
Source: National Statistical Coordination Board (NSCB)
Requirements for inclusive growth
• Deliberate policies that expand opportunities for remunerative employment and human
development
• Development in the periphery through
integration of the lagging areas or regions with the fast-growing, leading areas or regions of the country
• Large-scale targeted programs to directly assist those who are unable to participate in the growth process.
Strategies
• Improve investment climate for private investors
• Maintain macroeconomic stability and
fiscal prudence
Strategies
• Structural transformation from
consumption-led to investment-driven technology
– Improve efficiency of public investment to serve as a catalyst for greater private sector participation
– Connect the regions
– Address critical constraints to investments
Priority Sectors
PDP 2011-2016
oAgribusiness/Forest-based industries
oBPO/IT oElectronics oHousing oInfrastructure oLogistics oMining oShipbuilding oTourism
oOther high-growth potential industries (wearables,
garments, homestyle products, motor vehicle parts/
components
Agri-business
Infrastructure
Tourism
BPO
Logistics
Map courtesy of DOLE PDP Midterm Update
oAgribusiness/ (coconut, coffee, cacao, fish) oBPO/IT
oHousing oInfrastructure oHalal food industry oTourism
Strategies
• Boost competitiveness of productive sectors through investments in:
– Infrastructure – Human capital – Governance
Strategies
• Increase capacity of industries to grow and generate employment through:
– Support for new investors
– Improved access to financing
– Review of foreign investment negative list – Rationalize fiscal incentives
Strategies
• Growth to be driven by:
– Technology improvement/innovations – Policy improvements
– Institutional reforms
Goals for Philippine S&T
• Increase productivity of and improve links between agriculture and industries
• Innovations to improve quality of life
Strategies to enhance the country’s S&T capacities
• Improve investment climate for S&T
• Promote coordination and synergy between academe and industry
• Promote greater human resource development
• Facilitate demand for knowledge from the private sector
• Enhance public support for and management of knowledge institutions
• Facilitate access to ICT infrastructure
Strategies
• Investments in human capital to address problem of low employability
– Phased implementation of K to 12 Basic Education Program
– Increasing investments in technical education – Encourage partnerships between higher
education institutions and businesses
What can the S&T community and industry sector contribute?
• Increase research, development and innovation
• Diversify and expand production of high- value products
• Increase investments on backward and
forward linkages
Inclusive growth
for a more competitive Philippines
ARSENIO M. BALISACAN
Socioeconomic Planning Secretary and Director-General National Economic and Development Authority
3rd Anniversary Celebration, Philippine Council for Industry, Energy and Emerging Technology New World Hotel, Makati June 28, 2013. 9:30 am
