The government is confident that the Philippine economy will expand within its 6-percent to 7-percent growth target this year, according to Socioeconomic Planning Secretary Arsenio Balisacan.
“We are confident that with the 2012 GDP [gross domestic product]growth rate of 6.6 percent, we are on track to achieving our target of 6 [percent]to 7 percent this year and 6.5 percent to 7.5 percent next year,” Balisacan said during the 34th National Conference of Employers.
He cited that investment to GDP ratio in 2012 was 20.4 percent, adding that a significant portion of this is public investments, which increased by more than 32 percent.
Balisacan, who is also the National Economic and Development Authority director general, also mentioned that the inflation rate was kept low and stable, even settling at the lower end of the target.
“There are other indicators that demonstrate that we have managed our economy quite well. And perhaps the best evidence is our first-ever investment grade rating granted by the two major credit rating agencies—Fitch and Standard and Poor’s,” he stated.
However, the Cabinet official admitted that unemployment and poverty were still the biggest challenge for the economy.
Unemployment rate in 2012 stood at 7 percent, while poverty incidence in the first semester last year was unchanged at 27.9 percent.
With this, Balisacan said that the government intends to revise its employment targets, particularly paying attention to the creation of decent and remunerative jobs to make it more consistent with the goal of inclusive growth.
Furthermore, the secretary had broken down the unemployment problem into three types—the slow rate of increase of employment opportunities; low employability of new job entrants and slow recovery of firms and businesses that have been affected by calamities.
To address these problems, Balisacan said that the government aims to anchor public investment to areas and programs that would improve the investment climate for private investors.
“Our strategic framework envisions the public sector as provider of enabling conditions for the private sector to invest in productive sectors, thereby creating decent and remunerative employment opportunities for the rapidly growing labor force,” he stated.
Balisacan further said that the government will continue to exercise fiscal prudence and maintain, if not improve, the country’s credit ratings so that business and employers could enjoy lower cost of capital.
He also mentioned that other strategies of the government to address unemployment problems were: to continue to assist in expanding markets; to boost the competitiveness of its productive sectors; investing heavily in infrastructure, human capital and governance; and encouraging innovations to research and development.