Sustaining Momentum to Achieve Inclusive Growth and Development Rosemarie G. Edillon, PhD Deputy Director-General National Economic and Development Authority 1
KEY MESSAGES Momentum has been building up. Build-up has to be sustained. Making the growth inclusive can sustain the build-up. It is also about making the growth relevant.
Momentum has been building up 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 PH economy has been on a sharply upward growth trajectory since the beginning of current decade 10 9 8 7 6 5 4 3 2 1 0 GDP in 2000 prices, trillion Php, 1960-2018 Real GDP growth 6.2% (2010-2015) 7.6 (2010) 3.7 (2011) 6.7 (2012) 7.1 (2013) 6.2 (2014) 5.9 (2015) 6.9 (2016 Q1) Structural break for potential GDP ca. 2009 Source: PSA 3
contribution to growth in ppt (%) Momentum has been building up contribution to growth in ppt (%) Investment & industry becoming significant drivers of GDP growth 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0-2.0 2.8% Demand Side Ave. growth 4.5% 6.2% 6.9% 8.0 7.0 6.0 5.0 4.0 3.0 2.0 2.8 % Supply Side 4.5 % 6.2 % 6.9 % -4.0-6.0-8.0 1990-1999 2000-2009 2010-2015 1Q2016 Consumption Investment Government Net exports 1.0 0.0-1.0 1990-1999 2000-2009 2010-2015 1Q2016 Agriculture Industry Services
Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Momentum has been building up Supporting the remarkable economic performance are sound macroeconomic fundamentals. Headline and Core Inflation, Jan 2013- May 2016 Non-performing Loans (NPLs), 2005-2016 5.5 4.5 9.0 8.0 7.0 NPL Ratio, LHS* 3.5 6.0 2.5 5.0 4.0 1.5 3.0 2.0 0.5 1.0-0.5 0.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Core Inflation Headline Inflation NPL Ratio, LHS* * as of Mar 16 ** as of Mar 16 *** as of Q3 2015 Note: RHS Right-hand scale ; LHS Left-hand scale
Momentum has been building up Source: Bangko Sentral ng Pilipinas *Data for China and Vietnam cover years 2012-2014
Momentum has been building up 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 Share of expenditures allocated to interest payments 13.9 17.4 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 as of Mar 2016 Stronger fiscal position National gov t outstanding debt (% of GDP) National Government Borrowing Program (%) 80.00 70.00 60.00 100.0 80.0 35.4 34.4 34.8 16.4 6.1 27.9 31.0 45.5 16.0 50.00 40.00 30.00 20.00 10.00 0.00 39.4 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 as of end Apr 2016 60.0 40.0 20.0 0.0 83.6 64.6 65.6 65.2 Domestic 93.9 72.1 69.0 Foreign 54.5 84.0 7
Build-up has to be sustained Address capacity constraints Continue build-up of human capital Diversify products and markets 8
Making the growth inclusive Vibrant economy is generating more and better jobs... Unemployment and Underemployment rates (%) Notes: a/ The FY 2014 LFS estimate is the average of April, July and Oct rounds excluding Leyte data b/ The FY 2015 LFS estimates is the average of the Jan to Oct 2015 rounds excluding Leyte data. FY 2015 employment generation estimate is the average of April, July and Oct excluding Leyte data c/ Not comparable with previous rounds of LFS; break in the data series due to change sin the Master Sample Design. Starting April 2016, the LFS used the 2013 MS Design, the 2010 Census of Population and Housing(CPH)-based population projections and the 2012 Philippine Standard Occupation Classification (PSOC).. *1997-2005: Adoption of population projection benchmark is based on the results of the 1995 Census **2006-2015: Adoption of population projection benchmark based on the results of the 2000 Census Source: Philippine Statistics Authority
Making the growth inclusive CCT program (4Ps) rapidly scaled up. Source: DSWD, BESF, DBM, NEDA-SDS National Economic and Development Authority
It is also about making the Growth RELEVANT.
The Life We Want 12
What Filipinos want to be 13 What Filipinos want to have What Filipinos want to do
An overwhelming majority of Filipinos aspire for a simple and comfortable life 16.9% Affluent life 3.9% Life of the rich 79.2% Simple & comfortable life 14
What is a simple & comfortable life? 62% Own one car 61% Have enough money for day-to-day needs 61% Own a medium-sized home 73% Earning enough 73% All children are college-educated 30% Relax with family and friends 30% Business owner 21% Able to take occasional trips around the country 15
What is a simple & comfortable life? 5,000 Own one car 40,000 Have enough money for day-to-day needs P 120,000 Gross Monthly Income 10,000 All children are college-educated 25,000 Income Tax 4,000 Relax with family and friends 30,000 Own a medium-sized home 6,000 Able to take occasional trips around the country 16
EDUCATION: Most preferred field of study (among those who have not finished college) 16.5% Education science and teacher training 12.7% Business administration and related fields 11.6% IT related 10.5% Tourism and hospitality 10% Engineering and technology 10% Law and jurisprudence 6.9% Medical and allied Trade, craft and industrial 6.7% 4.8% Maritime 17
OCCUPATION: Many want to be entrepreneurs but want stable and regular source of income and insurance Desired Occupation Secure income from a decent job Employer in own family-operated farm or business Work for government or government corporation 47% 22% 20% Self-employed without any paid employee Work with pay in own family-operated farm or business Work for private establishment 20% 18% 13% Work for private household Good salary (enough wages, paid regularly), having a business with good revenue Benefits and incentives (insurance, retirement) Job stability or security 18
DWELLING: Most respondents choose to live in houses with large lots, yet majority prefer to live in cities 73% selected the small house with a big lot 14% chose the big house with a small lot Preferred community to live in 30% prefer to live in a big city like Manila 29% prefer to live in a small city in the province 30% prefer to live in the town center in the province 19
Location preferences for work and home indicate that Filipinos generally want to work where family is within reach. 88% Want to work in the Philippines 79% want to live within the same city where they work 20 14% want to work in a big city but go home outside the city 7% want to work and live outside the city
Majority of Filipinos prefer to use own car to go to places. Question: In the year 2040, would you prefer to have your own car to go to places you need to go to or use a good public transportation system? 77% Own car/vehicle 23% Good public transportation 21
The Filipino Family in 2040 22
The Life We Want Matatag Living together with family Time with family and friends (work/life balance) Maginhawa Freedom from poverty and hunger Guaranteed mobility Secure home ownership Travel and vacation opportunities Panatag Resources adequate for day-to-day needs and unexpected expenses Security of place Passive income during retirement 23
Vision of Filipinos for Self Matatag, Maginhawa at Panatag na Buhay In 2040, we will all enjoy a stable and comfortable lifestyle, secure in the knowledge that we have enough for our daily needs and unexpected expenses, that we can plan and prepare for our own and our children s future. Our family lives together in a place of our own, and we have the freedom to go where we desire, protected and enabled by a clean, efficient, and fair government." 24
Goals: Matatag, Maginhawa, Panatag na buhay In 2040, the Philippines will be A prosperous, predominantly middle-class society with average income per capita of $11,000 (at 2015 prices); Free from poverty in all its dimensions; A healthy society with life expectancy at birth of at least 80 years; A smart and innovative society, and A high trust society.
Is the Vision within reach? YES, IT CAN BE REALIZED with the right policies & programs. 26
PHL can be nearly a high-income country by 2040 27
What does $11,000 per capita income mean? MALAYSIA 0.6% Poverty rate
riority Sectors Housing and Urban Development Construction Construction-related manufacturing Housing development-related manufacturing Utilities (EGW) Connectivity Roads and bridges Port Airport Transport (cars) communication 29
Priority Sectors (cont d) Education Services Formal education Re-tooling services Tourism-related services Financial services Consumer financing Enterprise financing Insurance Savings mobilization Health services Agricultural development Countryside development 30
The challenge of sustaining the vision Requires support and commitment from the next 4 Administrations Not all achievable immediately/ simultaneously Need to sustain the momentum Strategic flexibility under changing conditions
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