The inclusive growth mantra has to be
further asserted in the ASEAN Economic Community (AEC), said Dr. Cielito
Habito, former Director-General of the National
Economic and Development Authority (NEDA) and Chief of Party
of the USAID Trade Related Assistance for Development, during the 4th Final Workshop of
the ASEAN Beyond 2015, a project of the Economic Research Institute for ASEAN
and East Asia (ERIA). State think tank Philippine Institute for Development
Studies (PIDS) co-organized the event held at the Carlos P. Romulo Hall, NEDA
sa Makati Building.
According to Habito, ASEAN trade relations must be competitive
rather than complementary. “The Philippines has a predominantly intra-industry
trade with the rest of the ASEAN countries, especially with its major trading
partners in the region, meaning we trade in products within the same
industries. The Philippines’ top exports to its major ASEAN trading partners
are petroleum products, electronics, and chemicals, the same products that we
import in the region,” Habito noted.
Habito also commented on the budget misallocation in the
agricultural sector, where 70 percent of the commodity budget goes to rice yet
it is only responsible for only about 16 percent of the value adding in
agriculture.
He considers the growth potentials of the services sector. “The
Philippines has much more growth in the services sector because there are lots
of value adding within this sector such as in design and software.”
Meanwhile, UP Professor Emeritus and first NEDA Director-General
Dr. Gerardo Sicat accentuated the negative impacts of the country’s governance
and political issues on our investment performance. The changes of government
have caused reversals of economic policies and the effects of these reversals
were very costly, Sicat said.
Sicat explained that the Philippines is the only country in the
ASEAN that has complex constitutional provisions on economic issues. “We have
restrictions on capital, landownership, public utilities, and operation of land
mineral resources, which not all foreign investors could deal with,” he said.
PIDS Senior Research Fellow and Acting Vice-President Rafaelita
Aldaba stressed that the Philippines should not rely on the services sector
alone if we want economic growth to be inclusive. Aldaba noted the urgent need
for the revival of the manufacturing sector to increase the country’s
competitiveness in the region. A more vibrant manufacturing sector also means
more jobs available for Filipinos. “There has been very little movement of
resources in the Philippine manufacturing sector. Its share of value added to
GDP declined to 23.7 percent in the 2000s from 26.3
percent in the 1980s.”
ERIA Senior Researcher Ponciano Intal noted that ASEAN
competitiveness has to be strengthened to sustain high and equitable growth
beyond 2015. The Philippines needs an enabling policy and regulatory
environment to meet the desired targets of eliminating dire poverty, reducing
poverty rates by at least two-thirds, and reducing youth illiteracy rate and
malnutrition. “There should be greater focus on food security as it remains to
be a significant concern in the ASEAN,” Intal said.
PIDS President Gilberto Llanto stressed the need for ASEAN
countries to focus on border and beyond-the-border issues. “We also need to
cascade the implications of AEC 2015 to our policymakers, especially to those
who still are not aware of what AEC 2015 is.” (Philippine Institute for Development
Studies)
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