The government must take direct action to alleviate poverty in the country than wait for the natural trickle-down effect of economic gains achieved so far, an economist said.
“It is better to have direct intervention such as the purpose of the new NEDA [National Economic and Development Authority] spatial and sectoral approach,” Alvin Ang, University of Santo Tomas professor of economics and Philippine Economic Society president, told The Manila Times.
In his presentation during Dentsu Philippines’ briefing last week, Ang noted that the Philippines should prepare for the Association of Southeast Asian Nations (Asean) economic integration next year, the shift in Overseas Filipino Workers (OFW) demand or more demand on low skill labor export, immediate transformation of investments to productive and job-sustaining activities, as well as supporting infrastructure.
The Philippines cannot rest on its laurels. According to the economist, “investment upgrades of the country should be maintained” for the positive outlook in the country to last for the long term.
Despite the numerous investment grades the country received last year, Ang said it still needs to increase foreign direct investment (FDIs) to at least $5 billion. He noted that countries with lower credit ratings such as Argentina and Egypt had higher FDIs of $11 billion and $5 billion last year, respectively.
Such investments need to be connected to smaller firms to eventually increase small and medium enterprises, which can also offer employment opportunities.
The report enumerated the administration’s focus, which was indicated in the Philippine Development Plan 2011-2016 that pressed on education, improving business climate by fighting corruption, encouraging investments and increasing infrastructure development.
In a recent Standard Chartered report, the country’s economy was seen heading in the direction of being “investment-led” as FDIs increased by 36.6 percent in the first 11 months of 2013.