The Philippine Economic Briefing at the Philippine International Convention Center on Wednesday (September 30) focused on economic developments and human capital investments.
Officials from the central bank and socioeconomic planning agencies presented key gains in these areas. They pointed out that the country’s economy grew by 6.2 percent on average in the last five years.
Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said that this makes the Philippines the fastest-growing country in the Association of Southeast Asian Nations-5 (ASEAN-5) — outpacing Indonesia, Malaysia, Singapore, and Thailand.
Tetangco added that growth was achieved despite low inflation in the past five years — at 3.7 percent on average. The governor stressed the need to sustain this growth, as the global economy is expected to remain weak amid volatile financial markets.
Tetangco said that strong macroeconomic fundamentals are not enough, and that sustaining growth requires institutionalizing governance, raising human capacity, and developing infrastructure.
Meanwhile, Socioeconomic Planning Secretary Arsenio Balisacan admitted that the country will grow at around 6% in 2015. This is a downward revision from the 7- to 8-percent goal the government set for this year.
Despite these, the secretary said that there are bright spots. Public investment in social services such as education, health care, cash transfers averaged 12 percent in the last five years, compared to 7 percent in the previous administration.
Overseas Filipino worker remittances, the business process outsourcing industry, and tourism receipts continue to prop up the economy. Key reforms in sin tax, competition, and foreign shipping and foreign banking also boosted the country’s competitiveness, pushing it 5 notches up to 47th out of 140 economies in this year’s World Economic Forum’s Global Competitiveness Index.
Balisacan and private sector representatives also discussed the so-called “youth bulge” in the Philippine economy. This means the economy has more workers than it can employ — mostly young people of employable age, with an average age of 23.
The Philippines is seen to experience the youth bulge from 2015 to 2050. Balisacan said that such a window helped spur the growth of East Asian economies from 1965 to 1985. So, maximizing the Philippines’ growth possibility during this period is crucial.
The panel raised several key reform areas to maximizing the youth bulge. These include matching youth skills with jobs; raising human capital investments in health and education; and policies for reducing dropout rates in high school.
The panel said that the youth should be encouraged to use the Internet to come up with creative business models, like that of Uber and Airbnb. They also recommend investing in workers’ productivity, which could then raise incomes.
As written by CNN Philippines’ Miro Capili