Foreign investments that translate into more jobs are supporting growth, reflecting the confidence of businessmen on the country’s macroeconomic fundamentals.
Foreign direct investment inflows reached a record $10 billion in 2017, up 21.5 percent from the previous year and almost double the rate in 2015.
Latest data from Bangko Sentral showed FDI net inflows in the first five months of 2018 sustained the gains in 2017, surging by 49 percent to $4.8 billion from $3.3 billion year-on-year.
Net inflows of foreign direct investments in May jumped 142.9 percent to $1.6 billion from $677 million a year ago.
Finance Secretary Carlos Dominguez III noted that the Department of Trade and Industry had sustained its efforts in achieving the ambitious goal of putting the country in the top 20 percent in the ease of doing business rankings.
“With all our efforts at simplifying processing, speeding up approvals for startups, and reducing red tape, this should be an achievable goal,” Dominguez said.
The Philippines’ unemployment rate, meanwhile, dropped to 5.5 percent, down by 0.2 percent from the same period last year with 625,000 jobs created. About 605,000 Filipinos were employed in manufacturing and construction.
Economic Planning Secretary Ernesto Pernia said investments and the government’s massive infrastructure program “Build, Build, Build” should contribute to economic growth in the succeeding quarters and years.
The government expects to spend as much as 7.3 percent of the gross domestic on public infrastructure by 2022. The government envisions the completion of 32 of 75 flagship projects by the end of 2022, while making sure the 4,909 other projects in the provinces and towns across the Philippines will have broken ground by then.
Pernia said while the inflation rate was slightly off target due to the rise in prices of rice, fuel, and fish, it would be temporary as the government transitioned towards fully-implementing important public policy reforms.
Lower unemployment
Pernia said the unemployment rate from the April round this year was down to 5.5 percent from a year ago’s 5.7 percent, the lowest for all the April rounds of the Labor Force Survey in the past decade. This put the unemployment rate in the first half of 2018 at 5.4 percent, continuing its downward trend over the years.
“Rapid economic growth has also translated to significant gains with 1.52 million additional employment generated in the first half of the year, well on track to achieve our target of 900,000 to 1.1 million employment generation in 2018,” he said.
Pernia said the government exceeded its target of reducing the underemployment rate in areas outside the National Capital Region, which was down to 17.1 percent in 2017.
“Moreover, emerging numbers tell us that we remain on target this year—underemployment rate in areas outside the NCR was at 18.8 percent in the first half of 2018. This is consistent with our goal of spreading growth to the regions,” he said.
On education, Pernia said the government was expecting a steady decline in elementary and secondary students dropping out of school. Students reaching the final year of elementary and high school increased to 94.2 percent and 84.6 percent, respectively, in school year 2016-2017 as opposed to 87.5 percent recorded in school year 2015-2016.
Pernia said 2018 was an important transition period, as the full implementation of many of the government’s planned programs and proposed socioeconomic policies next year was expected.
“While many challenges and risks lie ahead, I am confident that we will reach our macroeconomic targets and further the national development agenda. The government’s Economic Development Cluster remains committed to its mandate of ensuring stable, inclusive, and most importantly, sustainable growth,” Pernia said.