The next president should build on the gains of the Aquino administration while instituting more reforms toward inclusive growth, according to top economists.
"To ensure that growth can be inclusive, the first step is to create new opportunities through which everyone can participate and contribute,” Prof. Epictetus Patalinghug, a convenor of Albert Del Rosario Institute and professor emeritus of economics and finance at the Cesar E.A. Virata School of Business of the University of the Philippines said during a roundtable discussion sponsored by ADR Institute.
Participants in the roundtable discussion talked about different perspectives on the relationship between economic growth and poverty reduction.
Patalinghug said there should be an uninterrupted long-term, higher growth and sustainability where everybody has an equal opportunity to participate and contribute to economic growth.
Second, there must also be credible and effective institutions to enforce the rule of law, he said.
He also cited the need to lower the cost of transportation between the rural and urban markets and to link small rural entrepreneurs to urban manufacturers for access to capital and information.
Dr. Vicente Paqueo, a visiting research fellow at the state-run think tank Philippine Institute for Development Studies (PIDS), a consultant for Asian Development Bank (ADB), former professor of Economics at UP and former country sector coordinator at the World Bank (WB), said the Philippines should nurture the seeds embedded in key policy reforms such as on foreign investment regulations, the K to 12 program, the Reproductive Health Law and the recently passed competition law.
Paqueo’s suggestions include revisiting policies that don’t work or are counterproductive, such as the rice policy, regulations that make labor markets inflexible and constitutional restrictions on foreign investments.
He said the government’s flagship conditional cash transfer program, or the Pantawid Pamilya Program, is "not a magic bullet” but is an "effective strategy” to give the poorest an opportunity to move out of poverty in the long run through education, better health and nutrition as it targets intergenerational poverty.
Paqueo said concerns of leakages are "unfounded” and "overblown” as the program still largely benefits those who are vulnerable and need help.
Meanwhile, renowned economist Dr. Gerry Sicat agreed that freeing up the country to global trade is the most guaranteed route to ensure growth and solve inequality, citing the case of China and Vietnam.
"Foreign capital is the free good that we have rejected since the 1940s. When I look at these developments, I see how we have been left behind,” Sicat said.
Ferdie Diaz, co-chair of the Technical Working Group on Labor and Social Policy Issues of the Employers Confederation of the Philippines said "jobless growth had been the most evident consequence of inadequacy in foreign direct investment.”
"Even Vietnam is ahead of us in terms of reducing poverty. According to estimates, about 20 million Filipinos are currently unemployed, underemployed, or engaged in low-productivity employment,” said Diaz.
He said the solution is in agriculture, which at its current state "suffers from low productivity” and adds little value to the industry or other sectors.
Poor rural infrastructure and insufficient access to financing remain as key impediments to the development of the industry, he added.
"Neglect of this sector can be seen in its declining share of the GDP over the years even as the sector accounts for about 35 percent of the labor force and 70 percent of the poor,” he said.
Investment in infrastructure also continues to be lackluster, Diaz said, with the country’s spending on infrastructure representing only three percent of the GDP in the countryside.
Prof. Dindo Manhit, president of ADR Institute, underlined the need for the government to commit to a "big push” that will open up the country to job generating capital investments and an acceleration on infrastructure to address port and airport congestion, the abysmal public transportation system, and the high cost of power.
Other guests in the ADRI table discussion were distinguished members of the academe such as Cesar Virata, former director-general of the National Economic Development Authority Romulo Neri, , Dr. Celia Reyes of PIDS, Dean of the School of Labor and Industrial Relations of UP Dr. Jonathan Sale, and Dr. Eduardo Banzon of ADB, among others.//
