An economist said that with the current economic climate of the country, the Philippines attain long-term inclusive growth.
Inclusive growth is achieved if millions of people are lifted out of poverty, primarily through the creations of jobs.
Victor Abola, University of Asia and the Pacific (UA&P) senior economist, told The Manila Times through an exchange of emails that with the current gross domestic product (GDP) growth—6.8 percent in 2012 and 7.2 percent in 2013—the country can achieve inclusive growth.
He said that inclusivity is “within our reach,” and that recent policies passed that are pro-employment were a positive factor to the country achieving faster inclusive growth.
“For inclusive growth, you would need sustained fast growth for a good number of years. Historically, it takes countries some two decades to achieve this. But it can be hastened by even faster growth, which is within our reach, and policies to promote employment generation,” Abola said, citing the government’s 6.5-percent to 7.5-percent GDP targets up to 2016.
The Philippines is one of the fastest-growing economies in the world, only second to China which grew by 7.7 percent in 2013.
Abola also said that the peso’s depreciation to the dollar would be beneficial, as it would increase job creation by making it attractive for foreigners to invest in the Philippines.
He also said that the “trickle down effects” of the economic developments in the country would be noticeable from this year onwards.
“We should start noticing the trickle down effects in 2014, unless the government does foolish things,” Abola said.
The UA&P economist said that the main growth drivers for 2013 economic performance such as manufacturing, consumer spending and the reconstruction of areas struck by Super Typhoon Yolanda would be the same growth drivers for the year, only enhanced.
“These growth drivers will not go away any time soon. Infrastructure spending [apart from the reconstruction]is supposed to reach 5 percent of GDP by 2016, compared a little more than a half presently. Manufacturing has benefited from the construction boom, and now from a depreciated peso,” Abola said.
Earlier, Budget Secretary Florencio Abad told reporters that the government is confident in achieving the 5-percent GDP target share for infrastructure by 2016 from 2.7 percent in 2013, saying that the government has allotted P400 billion for infrastructure budget for the year, amounting to 3 percent of GDP. It will be P600 billion, or 4-percent share of GDP in 2015, and P836 billion, or 5-percent share of GDP in 2016.