PH aims to join club of developed nations by 2040

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FIVE years ago, a study by British banking giant HSBC grabbed the headlines for projecting that a handful of developing economies, the Philippines included, would be among the world’s largest by the middle of the century.

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The chances of that projection becoming reality have risen considerably now that the Duterte administration has decided to forge ahead with the country’s first-ever attempt at long-term planning.

With a growing middle class and a huge English-speaking workforce, the Philippines now wants, officially, to become one of the world’s largest economies in 25 years. The government aims to hike per capita income by at least three-fold and at the same time improve quality of life.

The long-term vision is called “AmBisyon Natin 2040,” a play of the Filipino words for ambition and vision.

The vision is not couched in economic jargon, and can be understood in plain language: “In 2040, we will all enjoy a stable and comfortable lifestyle, secure in the knowledge that we have enough for our daily needs and unexpected expenses, that we can plan and prepare for our own and our children’s future. Our family lives together in a place of our own, and we have the freedom to go where we desire, protected and enabled by a clean, efficient, and fair government.”

AmBisyon 2040 calls for Filipinos living in a “prosperous, predominantly middle class society where no one is poor,” and in a “high-trust society” that allows people to “see to their economic pursuits, secure in the knowledge that they will be able to enjoy the fruits of their labor.”

Filipinos, moreover, are smart and innovative, and are healthy and live a long life.

The vision was drawn from an extensive study that asked Filipinos what they wanted for themselves, the family and their country in the long-term: “a stable and comfortable lifestyle, secure in the knowledge that we have enough for our daily needs and unexpected expenses, that we can plan and prepare for our own and our children’s future. Our family lives together in a place of our own, and we have the freedom to go where we desire, protected and enabled by a clean, efficient, and fair government.”

Policy continuity
Last year, the Duterte administration embraced AmBisyon 2040 with the signing of Executive Order (EO) 5, which, according to Socioeconomic Planning Secretary Ernesto Pernia, effectively “approved and adopted the long-term vision as a guide for development planning across administrations.”

“The EO helps ensure that the next four medium-term development plans are anchored on the long-term vision, as intended, and helps secure the continuity of programs designed to make the vision a reality,” Pernia said in last year’s AmBisyon Natin 2040 Expo.

AmBisyon 2040 was also effectively validated by the Philippine Development Plan (PDP) of the Duterte administration that set the government’s socioeconomic goals up to the year 2020.

“The vision is now reflected in the framework of the upcoming Philippine Development Plan 2017-2022. The PDP seeks to build a strong foundation for a ‘matatag, maginhawa, at panatag na buhay.’ As such, it has three main strategies: ‘malasakit’ or enhancing the social fabric, ‘pagbabago’ or reducing poverty and inequality, and ‘kaunlaran’ or increasing potential growth,” Pernia said.

“Through this framework, the government is committing itself to designing and implementing appropriate polices, programs, and projects for the next six years that will bring the Philippines closer to what we Filipinos envision our country to be,” he added.

President Rodrigo Duterte’s EO, and Secretary Pernia’s pronouncements, are remarkable as these were rare instances of policy continuity across administrations. AmBisyon 2040 was launched at the tailend of the Aquino administration, and its adoption by the Duterte administration came as a surprise for some.

PDP 2017-2022 is supposed to be the first of four medium-term plans aligned to the AmBisyon 2040 goals – meaning that the next three administrations must continue the plan to attain the long-term vision.

Initial skepticism
Development economist Arsenio Balisacan, the previous administration’s socioeconomic planning chief who led the crafting of the long-term vision, considers the long-term plan a legacy of sorts.

“What do you need to get there? That’s basically the whole exercise I was engaged in during my last two years in the NEDA (National Economic and Development Authority),” Balisacan told The Manila Times editors in a roundtable discussion.

“I was so pleased that at the very least, this administration took that effort and adopted it in its agenda. The PDP 2017-2022 is based on that agenda,” said the former UP School of Economics dean, who now heads the Philippine Competition Commission.

Balisacan admitted that AmBisyon 2040 was met with initial skepticism.

“When we were launching that, people had skepticism. Nobody wanted to look that far,” he recalled.

“One thing unique about that AmBisyon 2040 is that it is based on what people aspire for themselves, and I transformed that into simple numbers, like what does it mean for minimum wages, for housing, health, schools. And I said this is very doable. South Korea did it in one generation,” Balisacan said.

According to NEDA’s projections, the Philippines can be nearly a high-income country by 2040, with per capita income of $11,000, provided the right policies and programs are implemented now.

This requires strengthened institutions that ensure the fair and equal application of rules; economic growth driven by an infrastructure boom, competition and innovation; investments in the health and education of people; protection against instability such as the effects of natural disasters; and a clean, efficient and service-oriented government.

According to NEDA projections, poverty eradication can happen sooner, at around 2030 under a strong-growth scenario. At a per capita income of $11,000, the country’s poverty rate would be at a mere 0.6 percent.

“If we succeed in sustaining growth of 7 percent for the next 25 years, we will have the average per capita income of an OECD economy,” Balisacan said, referring to the Organization for Economic Cooperation and Development, the elite club of high-income economies.

“Luckily, I am still around. But at the very least my children will be able to enjoy that prosperity,” he said.

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