PHILIPPINE DEVELOPMENT PLAN 2011-2016

In pursuit of inclusive growth

Cayetano W. Paderanga, Jr.

Socioeconomic Planning Secretary
National Economic and Development Authority

Philippine Development Forum

Sofitel Philippine Plaza, Pasay City
26 February 2011
Outline of presentation
 Philippine economic performance
 Constraints to inclusive growth
 Key programs and strategies in the Philippine
Development Plan 2011-2016

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 Low, lagging and uneven growth
Real Per Capita GDP growth (%), 1951-2009
12.0
Selected Asian Economies

10.0

8.0

6.0

4.0

2.0

0.0

-2.0
1951-1960 1961-1970 1971-1980 1981-1990 1991-2000 2001-2009

Hongkong Indonesia Korea Malaysia Philippines Singapore Taipei Thailand

Sources: Asian Development Bank (2010); National Statistical Coordination Board (NSCB) 3
High poverty and inequality

Country % of Poor Population 1/ Gini Coefficient2/

China 15.9 (2005) 0.415 (2005)
Indonesia 29.4 (2007) 0.376 (2007)
Malaysia 2.0 (2004) 0.379 (2004)
Philippines 22.6 (2006) 0.440 (2006)
Thailand 2.0 (2004) 0.425 (2004)
Vietnam 21.5 (2006) 0.378 (2006)
Sources/Notes
1/UNESCAP 2009 Statistical Yearbook;; based on Below US$1.25 per Day (www.unescap.org/stat/data/syb2009/)
2/ 2010 ADB Key Indicators

4
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 Why is inclusive growth

elusive?

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 Why is inclusive growth elusive?

50
Inadequate investment
Gross Domestic Investment (% of GDP)
45
40
35
30
25
20
15
10
5
Factors leading to
0
'94 '95 '96 '97
Indonesia
'98 '99
Korea
'00 '01 '02 '03
Malaysia
'04 '05 '06 '07
Philippines
'08 '09 '10
H1
Thailand
low investment
Note: Philippine’s 2010 H1 – from Q1-Q3
Sources: ADB-Asian Development Outlook; International Finance Statistics; NSCB
o Inadequate
infrastructure support
12 Foreign Direct Investment/GDP (in Percent)
10 o Gaps and lapses in
8
6 governance
4
2
0
-2
-4
2001 2002 2003 2004 2005 2006 2007 2008 2009
Indonesia Malaysia Philippines Thailand Vietnam
Source: WB – World Development Indicators; ADB Key Indicators;
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 Why is inclusive growth elusive?
Output growth does not lead to
employment creation
40.0 Comparative Unemployment Rates of Selected
35.0
Asian Economies  Labor market
30.0 fragmentation
25.0  Limited information about
20.0 job and skill availability
15.0
 Concentration of economic
10.0
activities to large-scale,
5.0
capital intensive and highly
0.0
2006 2007 2008 2009 2010* organized sector
China Indonesia South Korea Malaysia
Philippines Singapore Thailand
Sources: Asian Development Outlook 2009 (March 2009); Labor Force Surveys, National Statistics Office
(*Starting April 2005, the LFS adopts the new unemployment definition)

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Why is inclusive growth elusive?

Inadequate level of human development

 Declining quality of education
 Inadequate services for health security
 Inadequate protection from shocks on human
capital

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Why is inclusive growth elusive?
Low gains from trade
250 Exports/GDP (in percent) Remittance to GDP vs.
Tradable/Nontradable
200
0.014 1.60
150
0.012 1.40
100 0.01 1.20
1.00
50 0.008
0.80
0.006
0 0.60
0.004 0.40
2001 2002 2003 2004 2005 2006 2007 2008
0.002 0.20
Hongkong Indonesia Malaysia Philippines 0 0.00

1991
1989

1993
1995
1997
1999
2001
2003
2005
2007
2009
Singapore Thailand Vietnam
Source: WB – World Development Indicators; ADB Key Indicators
remittance/gdp tradable-nontradable ratio

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Social Contract with the Filipino People
“A country with an organized and widely shared rapid
expansion of our economy through a government
dedicated to honing and mobilizing our people’s skills
and energies as well as the responsible harnessing of
our natural resources.”

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Three broad strategies
to achieve inclusive growth...
INCLUSIVE GROWTH

OUTCOMES INCREASE
REDUCE POVERTY
EMPLOYMENT
PDP 2011-2016

EFFECTIVE
HIGH AND EQUAL ACCESS
BROAD AND
SUSTAINED TO
STRATEGIES RESPONSIVE
ECONOMIC DEVELOPMENT
OPPORTUNITIES
SOCIAL
GROWTH
SAFETY NETS

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Broad strategies to achieve inclusive growth

High and sustained economic growth

 Attain a high and sustained economic growth that
provides productive employment opportunities

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Broad strategies to achieve inclusive growth

Equal access to development opportunities

• Better education, primary healthcare and nutrition, and
other basic social services
• Equal access to infrastructure, credit, land, technology, and
other productive inputs
• Improve governance and strengthen institutions to
promote competition

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Broad strategies to achieve inclusive growth

Effective and responsive

social safety nets
 Protect and enable those who do not have the capability
to participate in the economic growth process

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 Social Contract’s 16-Point Agenda

Philippine Development Plan &

Medium-Term Philippine
Investment Program

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 Key programs
and strategies
in the
Philippine
Development
Plan 2011-
2016

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Philippine Development Plan 2011-2016
1. Introduction
2. Macroeconomic Policy
3. Competitive Industry and Services Sectors
4. Competitive and Sustainable Agriculture and
Fisheries Sector
5. Accelerating Infrastructure Development

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 Philippine Development Plan 2011-2016
6. Towards a Dynamic and Resilient Financial System
7. Good Governance and the Rule of Law
8. Social Development
9. Peace and Security
10. Conservation, Protection and Rehabilitation of the
Environment and Natural Resources Towards
Sustainable Development

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Key programs and strategies

Boosting industry competitiveness to

generate more employment
 Vital infrastructure and expand logistics chains
(Chapter 5 – Infrastructure Development)
 Mutually agreed-upon work arrangements
(Chapter 2 – Industry and Services)

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 Key programs and strategies

Boosting industry competitiveness to generate

more employment
 Focus on comparative advantage in more labor-
intensive activities (Chapter 2 – Industry and Services)
 Active trade policy that allows exporters to obtain
comparative advantage factors including technological
know-how (Chapter 2 – Industry and Services)

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Key programs and strategies

Improve access to financing

 Clear credit policy framework and corresponding
credit delivery strategy (Chapter 6 – Financial sector)
 Public financing programs for MSMEs, cooperatives,
etc. (Chapters 3 & 4 – Competitive and Sustainable
Agri-Industry-Services sectors)

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 Key programs and strategies

Improve access to financing

 Credit-access for poor – integrated in a business
service package (market matching technical assistance
and community organizing) (Chapter 6 – Financial
sector)
 Regional savings generation through microinsurance,
credit surety program, agent banking, use of non-bank
financial institutions (Chapter 6 – Financial sector)

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Key programs and strategies

Massive investment in
physical infrastructure
 Integrated and multimodal national transport and
logistics system (Chapter 5 – Infrastructure
development)

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 Key programs and strategies
Massive investment in
physical infrastructure
 Public infrastructure financed through better fiscal
and efficient budgeting and expenditure management
(Chapters 2- Macro policy and Chapter 6 -
Governance)
 Public Private Partnership (Chapter 5 –
Infrastructure Development)

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Key programs and strategies

Transparent and responsive

governance
 Transparency and accountability in public transactions – use of
Government Integrated Financial Management Information
System, procurement reforms (Chapter 7 – Governance)
 Anti-corruption - Whistleblower Protection Law, Amendment of
the COA charter, CHRP charter (Chapter 7 – Governance)

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 Key programs and strategies
Transparent and responsive governance
 Citizen’s access to information and participation in
governance (Freedom of Information Bill, NACPA,
transparent process in the selection of appointees)
(Chapter 7 – Governance)
 Enhance role of LGUs (Chapter 7 – Governance)

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Key programs and strategies

Develop human resource through

improved social services
 Adequate and responsive formal education structure and
program (kindergarten+12-year basic education program)
 Convergence of 4Ps, KALAHI-CIDSS and SEA-K
 National Health Insurance Coverage Program
 Communication, education and advocacy campaign for
population development and RP/FP Programs

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Complementary Strategies
 Stable macroeconomic environment – low inflation and
sustainable fiscal position (Chapter 2)
 Measures to mitigate potential negative impact of
environmental factors (Chapter 10)

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End of armed conflict
 Facilitate peace process and improve national security
especially in afflicted areas (Chapter9)

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 Sentro ang tao sa ating plano
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