Vice President Jejomar C. Binay on Monday said inclusive growth is the most important goal of the Association of Southeast Asian Nations (ASEAN) economic integration.
“I believe growth is meaningless if it does not redound to the good of everyone, or at least, to the greater number,” Binay said in a speech at the 2nd ASEAN Fixed Income Summit (AFIS).
“In the same vein, integration would be meaningless if it can only make the rich richer and not uplift the lives of the majority,” he added.
Binay noted that despite the recent economic developments brought by the planned ASEAN integration, significant portions of the population of ASEAN countries remain poor.
“The reality is that emerging economies like ASEAN have a significant portion of the population living below the poverty threshold. In the Philippines, one-fourth of our population is considered poor. About half of ASEAN has about the same poverty ratios as ours,” Binay said.
“Inclusive growth matters most to these poor people. They stand to become poorer if they have no access to basic opportunities that middle- and high-income earners take for granted, like easy transportation, education or healthcare. To the poor, these are lifelines that help them improve their lives,” he added.
Binay said AFIS could try to convince corporate bonds issuers to invest in basic physical infrastructure and services.
“Investments in physical infrastructure have high potential. An Asian Development Bank (ADB) report says ASEAN has to invest at least $60 billion annually for five years for the region to have decent infrastructure,” he said.
The Philippines needs $65 billion investment within 15 years to address the traffic problem in Metro Manila, Binay said, citing a study by the Japan International Cooperation Agency study.
“The current infrastructure-to-GDP [gross domestic product]ratio in ASEAN averages around 5 percent. More advanced economies like Singapore and Malaysia have invested higher than this average,” Binay said.
“Unfortunately, the Philippines invested only 2 percent of GDP on infrastructure and managed to grow by 6.2% only last year,” he added.
Binay, who chaired the Housing and Urban Development Coordinating Council (HUDCC), also noted that investing in low-cost housing can be profitable.
“In the Philippines, there are agencies lending directly to underserved markets while some other financing institutions issue securities backed by mortgages from commercial banks,” he said.
“In my time as chairman of the HUDCC, we built almost 216,000 mostly low-cost housing units, within four years and raised the assets of the Home Development Mutual Fund (Pag-IBIG) to over P376 billion without increasing members’ contributions,” he added.