The Philippine Development Plan 2011-2016 Midterm Update:
Challenges and Strategies
EMMANUEL F. ESGUERRADeputy Director-General
13th PESO Congress25 September 2013
OutlineI. The Philippine Development Plan (PDP) Midterm
Update – Framework and Process
II. The Development Challenge
III. National Short-term Economic Outlook
IV. Investment Plan for Strategic Sectors
Transparent, accountable and participatory governance
Poverty reduction and empowerment of the poor and vulnerable
Rapid, inclusive and sustained economic growth
Just and lasting peace and the rule of law
Integrity of the environment and climate change mitigation and adaptation
Promote transparent and responsive governance
Develop human resources through improved social services and protection
Achieve stable macroeconomic environment
Boost competitiveness in productive sectors
Improve access to financing Invest massively in physical
infrastructure
Advance peace process and guarantee national security
Ensure ecological integrity
Social Contract
PDP 2011-2016
6.8-7.2% Unemployment Rate
6.8% (2012) 7.6% (SI 2013)Real GDP Growth
20.3% (2012)20.8% (SI 2013)
Fixed Capital as ratio to GDP
Unemployment rate7.0% (2012)
7.3% (ave. of LFS’ 2013 Jan, Apr & Jul round)
Underemployment rate20.0% (2012)
19.8% (ave. Jan, Apr & Jul 2013)
27.9% (S1 2012)
28.6% (S1 2009)
Poverty Rate
Where are we now?Where are we now?
PDP 2011-2016 Targets
7-8% Gross Domestic
Product
22% Investment/GDP
ratio
Poverty Incidence down to
16.6%
We are on track with respect to our economic targets; the present challenge is to improve social outcome targets.
More needs to be done to achieve inclusive growth.....
2011
2012
Indicator Ave 2010 Ave 2012Ave 2012
(Jan, Apr & Jul)
Ave 2013 (Jan, Apr &
Jul)
Labor Force Level (‘000) 38,893 40,426 40,424 40,972
Employment Level (‘000) 36,035 37,600 37,577 37,978
Wage and salary workers (% share to total employment)
54.5 57.2 57.1 58.6
Unemployment Level (‘000) 2,859 2,826 2,847 2,994
Unemployment Rate (%) 7.4 7.0 7.0 7.3
Underemployment Level (‘000) 6,762 7,514 7,632 7,509
Underemployment Rate (%) 18.8 20.0 20.3 19.8
Source: Labor Force Survey, National Statistics Office
We need to generate more and better jobs
Good governance has proven to be an effective platform upon which strategies should be implemented.
Macroeconomic (fiscal, financial, external) and political stability fuels positive expectations that lead to growth.
Economic growth is necessary but not sufficient for poverty reduction.
Growth strategies need to have spatial and sectoral dimensions to ensure inclusivity.
Disasters can negate the gains and even push back development.
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Lessons Learned: Midterm Assessment of PDP 2011-2016 Implementation
Guiding Principles
• Efficiency (catalytic; government intervention facilitates and not substitutes for private action)
• Equity (broadening opportunities through connectivity, human capital investments)
• Feasibility (doable within the Plan period)
Desired Outcomes
• Rapid increase in employment opportunities to significantly reduce the stock of unemployed persons
• Significant reduction in poverty incidence to come as close as possible to the MDG
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POSITIVE ACTION with Spatial and Sectoral Dimensions Equalize development opportunities, Improve resiliencePOSITIVE ACTION with Spatial and Sectoral Dimensions Equalize development opportunities, Improve resilience
Boost competitiveness
Boost competitiveness
Improve access to financing
Improve access to financing
Macroeconomic Stability (fiscal, monetary, external, financial)
Macroeconomic Stability (fiscal, monetary, external, financial)
Science, technology ,innovation
Science, technology ,innovation
Education and skill set of the
workforce
Education and skill set of the
workforce
InfrastructureInfrastructure
InvestmentsInvestments
Rapid and sustained growthRapid and sustained growth
jobs jobs
Market demandMarket demand
REDUCED POVERTY ,MASSIVE EMPLOYMENT CREATION
REDUCED POVERTY ,MASSIVE EMPLOYMENT CREATION
National Security
Ecological Integrity
Good Governance
(Secure property
rights, Efficient
regulation, Transparent
and accountable)
National Security
Ecological Integrity
Good Governance
(Secure property
rights, Efficient
regulation, Transparent
and accountable)
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Hence we will do more to pursue inclusive growth.
Focusing on Priority Sectors
PDP Midterm UpdateoAgribusiness/AgricultureoManufacturingoBPM/IT oHousingo Infrastructure/LogisticsoTourism
Map courtesy of DOLE
Positive actions with sectoral and spatial dimensions will be undertaken to achieve inclusive growth.
Infrastructure development focusing on connectivity between regions/provinces, esp. transport and power
New growth drivers outside NCR (agri/agribusiness, tourism, IT/BPM in next wave cities, public housing, manufacturing, infra/logistics)
Investment in human capital to improve the competitiveness/ productivity of current and future stock of the labor force
Provision of social protection against income and employment shocks for the most vulnerable
Improved resilience to natural disasters
In order to accelerate economic growth , we are diversifying our industries and investment
Strategies to diversity industries• Strengthen the contribution of construction and utilities in line with
the infrastructure development program (i.e., transport and power)
• Diversify manufacturing: strengthen other subsectors, not only semi-conductors; diversify exports; promote higher value chain subsectors; strengthen link with agriculture (agri-industry)
• Reduce the cost of doing business– Quality Infrastructure
– Streamlining of registration and licensing procedures
– Implementation of programs and projects that addresses bottlenecks
National Short-term Economic Outlook
Source: NEDA as approved in the DBCC
We assume that growth will continue in 2013 and beyond
2012 Actual
2013 S1 Actual
2013 Outlook
2014 Target
GDP Growth (%) 6.8 7.6 6.0-7.0 6.5-7.5
Agriculture Growth (%) 2.8 1.4 3.5-4.5 3.2-4.2
Industry Growth (%) 6.8 10.6 6.4-7.5 7.4-8.5
Services Growth (%) 7.6 7.1 6.3-7.3 6.7-7.6
Strong performance of agri-based manufacturing, and recovery of semiconductor and electronics
Robust public and private construction projects Buoyant domestic and local tourism Continued strong growth of wholesale and retail
trade Real estate particularly housing Greater productivity in agriculture and rebound of
the fisheries subsector
Growth Drivers - Production
Higher public construction and investments in power generation
Robust private investment in construction and durable equipment
Strong household consumption due to better employment opportunities, strong remittance inflows, and low and stable inflation
Increased tourist arrivals and more demand for business process management
Improvement of external trade conditions
Growth Drivers - Expenditures
The proposed 2014 budget will help us move towards inclusive growth...
• Infrastructure development focusing on connectivity between regions/provinces; power security, eventually reduced power cost
• New growth drivers outside NCR(agri/agribusiness, tourism, IT/BPM in next wave cities, public housing, manufacturing, infra/logistics)
• Completion of asset reform, particularly individual titling of lands under CARP/CARPer
• Investment in human capital to improve the competitiveness/ productivity of current and future stock of the labor force
• Provision of social protection against income and employment shocks for the most vulnerable
• Improved resilience to natural disasters
The budget will support positive actions with sectoral and spatial dimensions.
Weather disturbances (e.g., Typhoons, prolonged monsoon rains)
Delays in the implementation of infrastructure development projects, particularly power
Excessive capital inflows/outflows Uncertainty of economic recovery in the Euro area and
Japan Tapering of monetary stimulus in the US Further economic slowdown in BRIC, particularly China Possible spike in commodity prices (e.g., petroleum)
We also remain vigilant against the following near-term global and domestic risks to growth...
*Luncintel, Global Industrial Application Paper Industry 2012-2017: Trend, Profit, and Forecast Analysis
…while taking advantage of opportunities
Improvement in the global economic environment-Sustained consumption growth in emerging markets
Demographic transition - Rising middle-income class, continued growth of working-age population
Increased economic integration of ASEAN member countries- Open flow of goods, services, labor, technology, finance
More financial resources available- Fiscal space- Investment credit-rating
Investment Plan for Strategic Sectors
PIP Revalidation Process: Salient Features
The Revalidated PIP veers away from the identification of all priority programs and projects of the government and has focused on strategic core investment programas/projects (CIPs) that will substantially contribute to the priorities embodied in the development objectives in the Plan and the critical indicators in the Result Matrix
Highlights of the First Draft of the Revalidated PIP: Strategic CIPs By Theme
In order to realize our medium term goal, we are prioritizing our programs and projects.
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* There are 12 emerging strategic CIPs under the theme ‘Accelerating Infrastructure Development’ with no 2013-2016 investment targets reflected in the submission to NEDA.
Most of investment targets are expected to be funded by NG:
Highlights of the First Draft of the Revalidated PIP: Strategic CIPs: Funding Source Breakdown 2013-2016*
Theme (Chapter)Number of
Strategic CIPs
2013-2016 Total Investment
Targets (in PhP Million)
Accelerating Infrastructure Development (Chapter 5) 69 551,545.75
Social Development Sector(Chapter 8)
5 50,354.08
Peace and Security (Chapter 9) 7 42,439.94Competitive and Sustainable Agriculture and Fisheries Sector (Chapter 4)
10 41,870.69
Conservation, Protection and Rehabilitation of the Environment and Natural Resources (Chapter 10)
7 23,306.40
Competitive Industry and Services Sector (Chapter 3) 2 5,028.96
Governance and the Rule of Law (Chapter 7) 1 2,076.18
Macroeconomic Policy (Chapter 2) 1 1,809.47
GRAND TOTAL 102 718,431.47
*There are 12 emerging strategic CIPs under the theme ‘Accelerating Infrastructure Development’ with no 2013-2016 investment targets reflected in the submission to NEDA
Highlights of the First Draft of the Revalidated PIP: Investment Targets By Theme*
The Philippine Development Plan 2011-2016 Midterm Update:
Challenges and Strategies
EMMANUEL F. ESGUERRADeputy Director-General
13th PESO Congress25 September 2013