Socioeconomic Planning Secretary and NEDA Director General Arsenio M. Balisacan's statement during the press briefing in Malacañang on February 17, 2014 on the Philippine economy and poverty reduction roadmap.
The Philippine Economy: Progress, Challenges, Strategies by Secretary Arsenio M. Balisacan
1. The Philippine Economy:
Progress, Challenges, Strategies
ARSENIO M. BALISACAN
Secretary of Socioeconomic Planning
Malacañan Palace, 17 February 2014
17-Feb-14
1
2. The Philippine economy has been growing robustly…
8,000,000
Real GDP at 2000 prices (Millions Php)
Trend (HP Filter)
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
Source: Philippine Statistics Authority and National Economic and Development Authority
3. Strong macroeconomic fundamentals supported this
remarkable performance.
Favorable interest rate and
sound banking system
Low and Stable inflation
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
10
Headline Inflation
25
NPL Ratio,
LHS*
8
Low-end Target
20
6
Real interest
rates, RHS**
15
4
High-end Target
CAR, RHS***
10
2
2005
2006
2007
2008
2009
2010
2011
2012
2013
5
0
0
2005
Note: High and low-end targets are based on the BSP publication on Inflation Targeting
dated September 2013; Actual inflation figures are based on the 2006 CPI series.
2006
2007
2008
2009
2010
2011
2012
2013
* end-November 2013, **Jan-Nov 2013, *** end-June 2013
Sustainable fiscal and external position
80.00
0.00
60.00
60.0
-1.00
4.8
-2.00
20.00
-3.00 20.0
4.5
3.1
Fiscal Balance to GDP (RHS)
* Fiscal balance to GDP as of September 2013; NG Debt to
GDP as of November
44.1
37.1
31.3
2005
NG Debt to GDP (LHS)
4.0
2.8
2.1
1.9
52.7
-4.00
2005 2006 2007 2008 2009 2010 2011 2012 2013*
4.6
40.0
40.00
0.00
6.0
5.6
4.4
2006
2007
2008
2.0
32.6
30.1
27
2009
2010
2011
24.1
21.9
0.0
0.0
External Debt to GDP Ratio (LHS)
* 2013 data is for the period Jan-Sep
2012 2013*
Current Account to GDP Ratio (RHS)
4. The government has considerable fiscal space for making
investments to catalyze private ventures, provide public
goods and fund social programs
National Government’s Sectoral Spending (% of GDP)
7.0
6.0
5.0
4.0
3.0
2.0
1.0
1986
1988
Health
1990
1992
1994
1996
1998
Education, Culture and Manpower Development
2000
2002
2004
Interest Payment
Source: Department of Budget and Management and Philippine Statistics Authority
2006
2008
2010
2012
Infrastructure and Other Capital Outlay
2014
5. We are on track with respect to our economic targets. But we lag with
respect to our desired social outcomes.
PDP 2011-2016 Targets
7-8%
Gross Domestic Product
22%
Investment/GDP ratio
6.8-7.2%
Unemployment Rate
Poverty Incidence down to
16.6%
Where are we now?
6.8% (2012)
7.2% (2013)
Real GDP Growth
20.3% (2012)
21.1% (2013)
Fixed Capital as ratio
to GDP
Unemployment rate
7.0% (2012)
7.1% (2013)
Underemployment rate
20.0% (2012)
19.3% (2013)
26.3% (2009)
25.2% (2012)
Poverty Rate
6. Lessons Learned: Midterm Assessment
of PDP 2011-2016
• Good governance has proven to be an effective platform
upon which strategies should be implemented.
• Macroeconomic (fiscal, financial, external) and political
stability fuels positive expectations that lead to growth.
• Economic growth is necessary but not sufficient for poverty
reduction.
• Growth strategies need to have spatial and sectoral
dimensions to ensure inclusivity.
• Disasters can negate the gains and even push back
development.
6
7. GDP Growth Targets for 2014-2016
Annual Plan Targets
Baseline
(2012)
2014
2015
2016
6.8
6.5 -7.5
7.0-8.0
7.5-8.5
GVA in agriculture, hunting,
fishery and forestry
2.8
(0.9)-0.1
2.0-3.0
2.5-3.5
GVA in industry
6.8
9.8-11.0
8.6-9.7
9.3-10.3
GVA in services
7.6
6.0-6.9
6.8-7.8
7.2-8.1
Indicator
Gross Domestic Product (%)
8. Employment Target for 2014-2016
Annual Plan targets
Baseline
(2012)
2014
2015
2016
Unemployment rate (in %)
7.0
6.7 - 6.9
6.6 - 6.8
6.5 - 6.7
Underemployment rate(% of
employed)
20.0
19.0
18.0
17.0
Indicators
a/ cannot be computed due to changes in industry classifications. In January 2012, the Philippine Statistics Authority (PSA) started
to adopt the 2009 Philippine Standard Industrial Classification (PSIC)for the industry codes. Prior to this, the PSA used the 1994
PSIC.
9. Poverty Incidence Target for
2014-2016
Indicator
Poverty Incidence (% of
population)
Multidimensional Poverty (% of
population)
Baseline
(2012)
25.2
Annual Plan Targets
2014
2015
2016
23.0-25.0 20.0-23.0
18.0-20.0
28.2 (2008) 20.0-22.0 18.0-20.0
16.0-18.0
12. Category 1: Provinces with the most number
of poor households
• Growth opportunities may be
present but the poor cannot
participate in the growth process
• In-migration; provinces attract
the poor from other places but
are unable to get jobs due to
lack of skills
13. Category 1: Provinces with the most number
of poor households
PROVINCE
REGION
NO. OF POOR
HOUSEHOLDS
1) Zamboanga del Sur Western Mindanao
170,181
2) Cebu
Central Visayas
151,425
3) Pangasinan
Ilocos
148,601
4) Negros Occidental
Western Visayas
138,664
5) Camarines Sur
Bicol
136,208
6) Leyte
Eastern Visayas
132,377
7) Iloilo
Western Visayas
122,770
8) Sulu
ARMM
122,218
9) Quezon
CALABARZON
122,139
10) Davao del Sur
Davao Region
111,655
Strategy:
• Promote higher growth to create
more employment opportunities
• Upgrade skill sets of the poor,
undertake more aggressive
employment facilitation
• Begin with growth sectors: ITBPM, tourism, manufacturing,
and logistics
14. Category 2: Provinces where the proportion
of poor households is high
• Limited opportunities for rapid
growth
• Small population, low density,
remote areas
• Weather-related events and
armed conflict
15. Category 2: Provinces where the proportion
of poor households is high
PROVINCE
REGION
Poverty
Incidence (%)
Lanao del Sur
ARMM
73.8
Maguindanao
ARMM
63.7
Eastern Samar
Eastern Visatas
63.7
Apayao
Cordillera
61.4
Zamboanga del
Norte
Western Mindanao
54.4
Camiguin
Northern Mindanao
53.6
Saranggani
SOCCSKSARGEN
53.2
North Cotabato
SOCCSKSARGEN
52.4
Masbate
Bicol
51.3
Northern Samar
Eastern Visayas
50.2
Strategy:
• Social assistance programs
while economic opportunities
are being created
• Programs that promote
economic and physical mobility
• Peace-building efforts
16. Category 3. Provinces prone to multiple
hazards
LIST OF PROVINCES
Abra
Agusan del Sur
Albay
Antique
Aurora
Benguet
Bohol
Cagayan
Catanduanes
Cavite
Dinagat Islands
Eastern Samar
Ilocos Norte
Ilocos Sur
Iloilo
Isabela
Laguna
Leyte
Northern Samar
Nueva Vizcaya
Pampanga
Quezon
Quirino
Rizal
Southern Leyte
Surigao del Norte
Surigao del Sur
Zambales
Zamboanga del Sur
Zamboanga Sibugay
Marginally non-poor can slide into
poverty due to shocks or disasters;
poor can slide deeper to poverty
Strategy:
• Risk reduction and mitigation
• Social insurance and social
protection
• Income diversification
17. Plan Implementation
• Convergence of different government agencies
• Role of the private sector, business, development
partners
• Implementation will be monitored by a NEDA committee
or Cabinet cluster
• NEDA Secretariat will produce annual reports on
progress/accomplishment
