PHL needs to grow 8% a year to achieve inclusive growth – foreign biz chambers

The Joint Foreign Chambers (JFC), the largest coalition of foreign investors in the Philippines, on Tuesday emphasized in no nonsense terms that inclusive growth can only come about when a long-term strategy and continuing social, political and economic reforms are in place.

While improvements big time have been achieved over the last four years, the government must set higher and more specific goals to achieve the much coveted inclusive growth, American Chamber of Commerce in the Philippines (AmCham) president Rhicke Jennings said in a speech read by AmCham executive director Ebb Hinchliffe during the Arangkada Forum in Makati City.

The targets must encompass a gross domestic product (GDP) growth of to 8 percent, an investments ratio of 19 percent to 30 percent of GDP, foreign direct investments (FDI) of $6 billion to $10 billion, and public and private sector spending accounting for 5 percent of the GDP by 2016, Jennings said.

According to the World Bank inclusive growth is the “rapid and sustained poverty reduction… that allows people to contribute to and benefit from economic growth.”

Last year, the economy grew by 6.1 percent on the heels of accelerated government spending that helped the GDP expand in the fourth quarter.

Latest Bangko Sentral ng Pilipinas data from showed that jobs-creating FDI reached a record $5.7 billion in January to November, up 61.6 percent from $3.5 billion a year earlier.

“The agriculture, creative industry, mining sector should be focused on reforms and growth, and  Mindanao must have peace in order to develop,” Jennings noted.

“Unemployment rate needs to fall below 5 percent, and reducing poverty to 18 percent by 2016 needs to be achieved,” he added.

The latest labor force survey (LFS) showed a 6 percent jobless rate in October 2014 – or 2.4792 million jobless Filipinos – from 6.4 percent a year earlier.

Investments and employment

Recognizing the need for a more sustainable economy, the government assured it will push for more reforms instituted even beyond the Aquino administration’s term in office, Finance Secretary Cesar Purisima said in a speech read in the same forum by National Treasurer Roberto Tan.

“The executive will continue to work with the legislative branch to ensure the economic development cluster’s priority bills –  at least – will be passed as soon as possible,” he said.

“These include, but not limited to, amending, shortening the foreign investment negative list, fiscal incentives rationalization, tax incentives and monitoring and transparency act, Customs modernization and tariff act and the amendments to the BOT (build-operate-transfer) law,” he said.

The seven foreign chambers in the Philippines, which encompass the JFC, launched Arangkada Philippines in 2010 as a major advocacy to increase investments and employment in the run up to September 2016 when a new administration is in place in Malacañang as a result of the May national elections.

In the fourth edition of the Arangkada Assessment Forum, 74.22 percent of the 462 recommendations are active or moving compared with 51.44 percent 2011.

The recommendations comprise GDP growth, competitiveness, agribusiness, business process outsourcing, creative industries, tourism, infrastructure policy, airports, roads and rail, water, environment and natural disasters, governance, judicial, labor, local government, macroeconomic policy, security, education, health and population, and poverty. – VS, GMA News