Economic expansion is meaningless if it does not eliminate poverty, Vice President Jejomar Binay said on Monday.
“Allow me therefore to add nuance and character to these ideas as we discuss what ought to be, in the end, the real challenge of economic growth, that expansion is meaningless without inclusion, when it does not alleviate poverty, when economic gains are not shared with the marginalized sectors of society,” Binay told the Financial Times-First Metro Philippines Investment Summit.
The summit is a gathering of senior policy-makers, financiers, economists and business leaders to discuss strategies for the impending Asean integration by 2015.
Asean or Association of Southeast Asian Nations groups the Philippines, Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam.
Binay noted the economic gains under the Aquino administration, calling it a “springtime” for the Philippine economy.
According to the Vice President, growth must be sustained by diversifying into job-generating sectors such as manufacturing, agriculture and tourism.
He said various critical areas need to be addressed for them to attract investments.
At the same time, Binay pushed for revisiting the Constitution to allow the entry of foreign direct investments to the country.
“The goal is to liberalize the entry of foreign investments in economic priming sectors like infrastructure, energy and telecommunications,” he said.
Binay urged increasing infrastructure spending, as well as fast-tracking the implementation of public-private sector partnership (PPP) programs, particularly in the transport sector.
“Parallel to our relaxation of the restrictions on foreign investments in the power sector, we must revisit the Electric Power Industry Reform Act, or Epira. We need to unlock investments in alternative power-generating systems to reduce the cost of electricity and expand power-generation capacities in the power-short areas of Mindanao and the Visayas,” he said.
Binay added, “We must make our higher minimum wages irrelevant by raising workers’ productivity through expanded and aligned technical vocational education.”
He said a true open skies policy, airport development program and expansion of the portfolio of tourist destinations and activities in gaming, cultural and eco tourism, health and wellness, and retirement would boost tourism in the country.
The Vice President added that the Philippine agriculture should be modernized.
“And we must energize the development of medium, small-scale, community-based enterprises by liberalizing government regulations for business start-ups. We need to expand the already vibrant micro finance sector and seed capital formation initiatives for small and medium-scale enterprises in the Philippine Stock Exchange,” he said.
The Vice President cited the need for a new execution paradigm for development plans that does not solely follow a top-down approach and is aligned with realities on the ground to truly achieve inclusive growth.
“Inclusion is achieved when the execution is aligned with sectoral, geographic and ground-level realities. It means that we must understand the unique requirements of each economic, geographic or political sector and adjust our execution strategies accordingly,” he said.
“Inclusion, after all, is not just statistics. It must accrue to all citizens, rich and poor, one member of society at a time. Inclusion must have a name, a face and an address,” Binay added.
He recalled that his ideas on economic inclusion were honed over his 20-year leadership of Makati City in Metro Manila.
“From the outset, revenue generation has been one of the key elements of the Makati narrative. I distinctly recall meeting with a group of businessmen early in my term, where I made one simple promise to them: I will focus only on governance. I will work to provide the environment for business to grow, but you must do your share in supporting the government by paying your taxes, among other civic responsibilities. I kept my promise, and so did the businessmen,” Binay said
“The rapid growth of Makati’s revenue base was the result of our efforts to collect taxes more efficiently. I would like to emphasize that in those 20 years, we raised taxes in Makati only once, and that was to simply adjust the rates from municipal to city level. Just as important, the expanded revenue base was the direct result of the improved performance of the business enterprises,” he added.