The Marcos administration has a comprehensive plan to sustain inclusive economic growth. By readying the economy for the 21st-century financial system, the administration will safeguard the nation from internal and external headwinds.
Department of Finance Secretary Ralph Recto, Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr., Special Assistant to the President for Investment and Economic Affairs Frederick Go, National Economic and Development Authority Secretary Arsenio Balisacan and Department of Budget and Management Undersecretary Joselito Basilio presented their strategies at the Economic Journalists Association of the Philippines-San Miguel Corp.
(EJAP-SMC) Economic Forum at Ayuntamiento de Manila in Intramuros on Monday. Budget Secretary Amenah Pangandaman also delivered a recorded video message.
"Had we not taken this step, rice prices would have remained above P50, causing significant pain for consumers," Recto said, adding that food security is the top priority of the Marcos administration, targeting to shield Filipinos from high food prices, which have the most significant impact on inflation.
Remolona added, "We, at the BSP, we look at our data. (T)he Fed is among the data that we look at. In our case, our numbers look better, I think, than the numbers for the US. The US is facing sticky inflation, so they're reluctant to cut, but nonetheless, I think we may cut sometime this year. We don't know who is the first, so that's up to the data."
Remolona said the better-than-expected 3.7-% inflation in June provides "a bit more scope for easing, possible in August."
He affirmed that if inflation continues to fall for the rest of the year, the Monetary Board could reduce rates ahead of the US Federal Reserve System.
According to Recto, the inflation rate also dictates the BSP's policy stance, which affects other economic activities like investments, lending, and hiring.
The Finance chief said Filipinos would start to feel the impacts of Executive Order 62, which lowers the tariff of rice from 35 to 15%, in August as the average price of rice could go down to P50 per kilogram from P54.50 per kilo in June.
"A sustained high price of rice could continue to drive inflation, delaying the reduction of policy interest rates by the BSP and derailing the country's economic growth trajectory," Recto added.
Long-term goals
Balisacan said that for the Philippines to future-proof its growth in the long run, the government should intensify its efforts to attract investments and boost exports.
The Philippine economy, Balisacan said, is heavily dependent on services, which accounted about two-thirds of the overall growth in recent years.
"Investments have contributed to less than half our GDP (gross domestic product) growth, but exports have grabbed our growth, with our exports performing sluggishly relative to our income," he said.
He added that the steady decline in agriculture and manufacturing's share of GDP significantly limits the country's opportunities for poverty reduction.
"In the recent economic history of nations, especially in Asia, manufacturing growth was a primary driver of poverty reduction. Not surprisingly, since manufacturing is critical to the productive absorption of unskilled and semi-skilled labor, especially low-productivity labor around agriculture," Balisacan said.
Meanwhile, Go said Marcos' investment missions abroad promote the country as a strategic investment destination in the region.
Go said the administration pushes for investment-friendly policies such as streamlining regulations, easing restrictions and building critical infrastructure.
The government's ongoing efforts include passing the Corporate Recovery and Tax Incentives for Enterprises Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) bill, promoting investments in the Luzon Economic Corridor, and upskilling and reskilling the workforce in cybersecurity.
"These initiatives and reforms aim to reduce barriers and create an environment conducive to business and economic growth. And they all work towards our ultimate goal: to make the country a top investment destination," Go added.
In her video message, Pangandaman said the timely budget disbursement to fund the government's programs, especially in social services and initiatives, would support the country's economic growth.
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