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Economic Planning Secretary optimistic on 2019

The government’s economic chief is optimistic about the performance of the economy in 2019, following the successes and setbacks in 2018.

Economic Planning Secretary optimistic on 2019

“Overall, 2018 is not the kind of year that we have initially expected,” said Economic Planning Secretary and National Economic and Development Authority director-general Ernesto Pernia. 

“You know there will always be more than two sides in a story. One group will view the glass as half empty, while the others half full. We choose to be on the latter’s side. But our hope and optimism is strengthened by grounded objectivity and unstoppable determination and hard work,” Pernia said in his year-end briefing.

“Despite external and domestic headwinds in 2018, the Philippine economy became stronger and even more resilient than ever,” said Pernia.

He said despite the challenges, the economy still grew by more than 6 percent in 2018.  “The economy has been on a roll. It has been growing at least 6 percent for 14 consecutive quarters now. This is the strongest economic growth we have seen since the mid-1970s. And, I am proud to say that the Philippines’ economic growth is sustained and uninterrupted. While the year-to-date real GDP growth is at 6.3 percent and it is slower than the 6.8 percent growth recorded in the same period last year, the Philippines continues to be among the best performing economies in the region,” he said.

Pernia, however, agreed that there is still much work to do. “Among the factors in the slowing down of the overall economic growth in the first three quarters of 2018 are lower agricultural output and softened household consumption, mainly on the back of accelerated increase in prices, particularly food. This reflects less optimistic consumer sentiment despite strong labor data,” he said.

“Next, we have all felt the pinch of a faster inflation rate in the past few months. This has been a cause for concern for the whole economic team. And so, we have made sure that we are quick and on point in implementing our anti-inflationary measures.  The president issuing Administrative Order 13 was crucial in our efforts to bring down the prices of key agricultural commodities, such as rice, fish, meat, vegetables, and fruits, which have significantly contributed to overall inflation in the past,” he said.

“We are optimistic that increases in consumer prices have already peaked and we expect inflation to normalize in the medium term,” said Pernia.

He said the recent passage of the Rice Tariffication bill was expected to reduce rice prices by up to P7 per kilo. “Notwithstanding, the positive development in the global oil market will also help in tempering consumer prices further over the near term, particularly of energy-related items,” he said.

Pernia said Neda continued to work closely with the entire economic team, especially the Bangko Sentral ng Pilipinas, which takes the lead in tightening monetary policy to curb inflationary pressures especially on the demand side. The BSP projects inflation to average 5.2 percent in 2018, before easing in 2019 to 3.2 percent.

Pernia said the signing into law of the Ease of Doing Business Act or Republic Act No. 11032 will also boost economic activities, as the measure aims to simplify the requirements and streamlines procedures in starting and opening a business in our country. 

“This hopefully will result in enhanced business competitiveness, lessened bureaucracy, and reduced opportunities for corruption, while more foreign businesses are attracted to invest in the country,” he said.

Pernia said the signing of Executive Order No. 65 promulgating the Eleventh Regular Foreign Investment Negative List or RFINL is also a boost to the country’s business competitiveness. “Liberalizing more sectors for foreign investment in the country will open the country for new technology and innovation,” said Pernia.

The Neda chief said the Philippine labor market continued to improve overall.  “Unemployment is down to 5.3 percent, which is within the target for the year. Labor force participation of women improved to 47 percent, although it remains behind target. Discouraged jobseekers also declined to 11.5 percent, which was better than the target. Youth not in employment nor education likewise declined to 19.9 percent, well within the target,” he said.

Pernia said some 826,000 jobs were generated in 2018, slightly below the government’s low-end target.   Youth unemployment continued to remain elevated at 13.3 percent, still higher than the Philippine Development Plan target of  10.4 percent in 2018. 

He said on infrastructure, the government was making definite progress in its massive infrastructure program, known as the ‘Build, Build, Build’. 

“We are certain that the government’s efforts will pay off and we will see improvements in the state of the country’s infrastructure over the medium-term,” he said.

Pernia said that as of end-November 2018, 35 of the 75 infrastructure flagship projects were approved by the Neda Investment Coordination Committee or ICC and confirmed by the Neda Board. These have a total investment requirement of P1.54 trillion.

Meanwhile, another 31 projects are expected to be approved by the Neda Board upon the recommendation of the ICC. “In terms of project timelines, we expect 31 projects to be completed by 2022. The remaining 44 projects will be completed beyond this administration’s term but may commence implementation during this administration,” he said.

“If 2018 has not been easy for us, 2019 will not be bereft of challenges as well. The global growth is expected to slow down starting next year. The external environment seems to be less supportive of our country’s potential economic growth in 2019,” he said.

“But the resilience of the Philippine economy in 2018 will likely continue over the medium term. With key reforms scored this year, we expect the performance of the economy to be robust despite domestic and external risks. This will be supported by the ‘Build, Build, Build’ program gaining steam expected next year,” said Pernia.

Topics: National Economic and Development Authority , Ernesto Pernia , Eleventh Regular Foreign Investment Negative List
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