PH needs economic ‘rebalancing’ to address poverty

DAVAO CITY (MindaNews/20 June) – The country can address poverty and inequity if it shifts from being consumption-driven and services-oriented to developing its investments, exports as well as agriculture and manufacturing sectors, an official of the incoming administration said Monday.

Incoming National Economic and Development Authority director general Ernesto M. Pernia said the agricultural and industrial sectors “are rather weak in terms of performance, the reason why the economy has a low capacity to generate jobs.”

“From consumption driven as a share of GDP (Gross Domestic Product) is something 2/3, too high…Rebalance from being service-driven to agriculture and manufacturing,” he noted.

He said this is why development has not been felt down to the grassroots.

Pernia was addressing the country’s business leaders at the opening of the two-day “Sulong Pilipinas: Hakbang Tungo sa Kaunlaran” at the SMX Convention Center that opened on Monday (June 20).

He acknowledged the country’s good macroeconomic performance under President Benigno S. Aquino III but said it failed to address poverty and inequity.

“The performance of the Aquino government has been really good in macroeconomic performance. But in terms of subnational or lower level either in terms of sector distribution or sectoral breakdown of GDP, the performance has rather been uneven and not as healthy for the country to move in inducing economic growth,” he said.

He added it is necessary to take investments out from the National Capital Region to the regions and develop more cheaper renewable energy sources.

He said poverty rates improved too slow between 2006 and 2012, which covered the Arroyo and Aquino administrations.

The first semester poverty incidence in 2015 stood at 26.3 percent, improving only by 1.6 percentage points as compared to the same period in 2012 at 27.9 percent, Pernia said citing figures from the Philippines Statistics Authority.

“In terms of poverty reduction, there are initial signs of strides in poverty reduction but very little between 2006 and 2012, where poverty went down by over 1 percentage. This is very poor of the poverty reduction,” he said.

He explained that even if the country’s poverty incidence has improved, the absolute number of poor Filipinos has continued to rise because of a bigger population base.

Pernia, however, commended the Aquino administration for keeping external debt on a downward swing and earning the country some credit ratings upgrade.

Incoming Budget Secretary Benjamin Diokno said the incoming administration will increase domestic rather than foreign borrowings.

“There’s a lot of money within the economy. Why not borrow domestically? We should not borrow from abroad,” he said. (Antonio L. Colina IV/MindaNews)