ENDEAVOR
Sonny Coloma
One of the highlights of President Ferdinand Marcos, Jr.’s first State of the Nation Address was the presentation on the Medium-Term Fiscal Strategy’s “headline goals” as follows:
Real GDP growth of 6.5 to 7.5 percent in 2022 and 6.5 to 8 percent from 2023 to 2028; nine percent or single-digit poverty rate by 2028; three percent national government deficit to GDP ratio by 2028; less than 60 percent government debt to GDP ratio by 2025; and income per capita of at least $4,256 by 2024, thereby raising the country to upper middle-income status.
Socioeconomic Planning Secretary and NEDA Director General Arsenio Balisacan said the new administration is targeting a per capita income of $4,250 in 2024, equivalent to around ₱236,752. The current per capita income is $3,549 or about ₱197,692 at the present dollar-peso exchange rate.
Following the World Bank’s classification of the world’s economies according to gross national income per capita (GNI), the Philippines could move up from lower-middle to upper-middle income, or from the third to the second rung of the ladder. The World Bank classifies as upper middle-income countries with GNI ranging from $3,996 to $12,375. Note that the country’s current GNI is just a shade below the minimum threshold.
Secretary Balisacan is treading on familiar ground. During the administration of President Benigno S. Aquino III in which he also served as NEDA chief, “the nation’s economy grew at an average of 6.2 percent and twice exceeded 7 percent, the fastest pace since the 1970s,” reports Bloomberg. He said the target is attainable provided that the country achieves a GDP growth of 6.5 to 7.5 percent in 2022 and grows from 6.5 percent to 8 percent in 2023.
A corollary target for the country, albeit more ambitious, is to reduce poverty to the single-digit level, or 9 percent by 2028, the current administration’s end-year. During the Duterte administration, the GDP growth momentum was sustained. From 26 percent at the end of the Aquino III administration, the poverty level dropped to 20.8 percent according to World Bank figures – and was projected to decline to 20.8 percent in 2020, and to 18.7 percent in 2021. But the Covid-19 pandemic struck and pushed this back upward to 23.7 percent in the first half of 2021, as reported by the Philippine Statistics Authority.
President Marcos said in his SONA that more than a million have been delisted from the rolls of the Pantawid Pamilyang Pilipino Program (4Ps), but more have to be included as thousands lost jobs and descended into severe poverty.
“4Ps” was the centerpiece of the Aquino administration’s poverty reduction program – and Secretary Balisacan has vowed to make it the central focus of the country’s economic growth strategy. In 2015, during his first stint at NEDA, he presided over the crafting of AmBisyon 2040, the first 25-year development program for the country.
In turn, the Duterte administration charted its own 2017-2022 program within the AmBisyon 2040 framework. NEDA is now working on the Marcos administration’s 2023-2028 economic development program, the main components of which were announced in the SONA. It was also during the Duterte administration that Congress enacted Republic Act 11310, An Act Institutionalizing the Pantawid Pamilyang Pilipino Program. The 4Ps “is the national poverty reduction strategy and a human capital investment program that provides conditional cash transfer to poor households for a maximum period of seven years, to improve the health, nutrition and education aspect of their lives.”
A potential game changer in the poverty reduction program is the new administration’s emphasis on “bridging the digital divide” to ensure that “no Filipino will be left behind as the country enters the age of exponential technology adoption.
Recall that digital acceleration enabled many Filipino families to cope with the protracted lockdowns in the past two years of the Covid-19 pandemic outbreak. The entire business process outsourcing industry – a leading dollar earner for the economy – shifted to work from home mode. Digital payment systems also enabled families and individuals to source food and services from the comfort of their homes.
The Department of Information and Communication Technology (DICT) has been tasked to fast-track the implementation of the National Broadband Plan, the common tower program of the telecommunication companies, and the Broad Band ng Masa project to enable connectivity in Geographically Isolated and Disadvantaged Areas (GIDA).
Faster distribution of the national ID will also hasten implementation of digital transformation in government services; bureaucratic efficiency could also be enhanced dramatically.
Indeed, attaining sustainable economic recovery appears to be back on track.