Philippines to Fix Weak Spots in Path to $500 Billion Economy
Philippines’ incoming economic planning secretary Arsenio Balisacan plans to bolster the economy’s weak spots as he targets at least 6% annual growth throughout the term of President-elect Ferdinand Marcos Jr.
The next administration must boost investment in agriculture and manufacturing and build infrastructure to grow the economy between 6%-8% annually to 2028, Balisacan said in an interview Wednesday. Farm and industry output currently account for less than 40% of gross domestic product, while services contributes the majority.
“I would like to see those weakest points as the priority of the administration,” said the 64-year-old, who’s currently chairman of the nation’s antitrust commission.
Consistently growing at the rate of 6% for six years will make Philippines a half-a-trillion dollar economy, according to Bloomberg calculations. The nation’s first-quarter expansion of 8.3% is already among Asia’s fastest, thanks to the reopening from the pandemic. Still, Marcos’s team faces immediate challenges: inflation is at its fastest in three years, budget deficit has widened and the global outlook has dimmed.
Still, Balisacan said the economy can expand by at least 7% this year, within the official growth estimate, riding the recovery from the record contraction in 2020 due to the pandemic. He said he will push for more targeted support measures to ease inflation’s burden on the poor while ensuring “tight” government finances are managed properly.
“We can achieve more with less,” he said, adding that a review and streamlining of beneficiaries are needed. The nation also cannot afford removal of certain taxes on goods as proposed by some sectors, he said.
Balisacan will draw from his experience in crafting a new economic development plan. Before taking helm of the antitrust body, he served as economic planning secretary of the late president Benigno Aquino from 2012 to 2016.
To sustain economic growth of at least 6%, the next administration must address red tape and build infrastructure needed to attract investment in manufacturing and agriculture, said Balisacan, who holds a PhD in Economics from the University of Hawaii.
Given a budget deficit inflated by pandemic-era support programs, companies and multilateral development agencies may be tapped to finance roads, rail and irrigation, he said. Balisacan helped manage the Aquino administration’s flagship public-private partnership infrastructure program.
Funneling investment into lagging sectors is also crucial in creating jobs and bringing down the poverty rate to 9% from 23.7% as of mid-2021, Balisacan said.
The incoming economic planning secretary is widely seen by analysts to bring poverty and rural development flavors into policy making, thanks to his background.
Born into a tenant-farmer family in Ilocos Norte province, where the Marcos family also hails from, Balisacan took up agriculture in college before venturing into economics for his graduate degrees.
His first job was to survey farmlands for an agriculture research agency, he said. “That exposed me to many problems of farmers around the country.”
Asked why he accepted his new post, Balisacan, whose family was looking forward toward his retirement next year, said it was “call of duty.” He was adviser to Marcos when the incoming president was Ilocos Norte governor.
“I was surprised,” he said about Marcos’s offer. “I don’t mix politics and my work. Politics is not in my DNA, fortunately or unfortunately.”