Phls. can be high-income economy by H1 2045
Economy

Phls. can be high-income economy by H1 2045

Aug 12, 2022, 6:01 AM
Kaithe Santos

Kaithe Santos

Writer

The economy can regain its growth trajectory in the next decade.

The Philippines is poised to become a high-income economy by 2045 at the latest, Socioeconomic Planning Secretary Arsenio M. Balisacan said.

“Assuming that the economy can regain its growth trajectory in the next decade, also the trajectory targeted for the medium term of this administration, and hold on to it for two more decades, the Philippine economy can become a high-income economy by the first half of the 2040s,” Balisacan said yesterday.

Balisacan later told reporters that the deadline for obtaining high-income economy designation had been moved back from 2040 to 2045, reflecting the pandemic's impact on the economy, Business World reported.

To stop the coronavirus epidemic from spreading, the government imposed strict lockdowns in 2020, which caused the Philippine economy to collapse by a record 9.6 percent.

“The aspirations of ‘Ambisyon 2040’ remain the same. It’s just the timeline that might have to be realistically revisited. There was a very sharp contraction in 2020 that really dragged down the average growth for the Duterte administration substantially. If only we could have maintained at least 6 percent, it could have been doable,” Balisacan said.

The country’s gross domestic product expanded by 5.7 percent in 2021, and in the first half of the 2022 it increased by 7.8 percent. The government targets 6.5-7.5 percent growth this year, and 6.5-8 percent annual growth for 2023 until 2028, a Business World report said.

Despite a 6.12 percent growth in its gross national income (GNI) per capita to $3,640 last year, the Philippines maintained its status as a lower middle-income economy, World bank said. It also added that the income range for the upper middle-income group expanded from $4,096 to $12,695 in 2021 to $4,256 to $13,205 this year.

Balisacan acknowledged the medium-term risk of rising inflation but is confident about the economy's resiliency.

“While inflation is a key policy challenge in the near term, the Philippine economy shows resilience… the priorities for the medium term, 2023 to 2028, remains to be reinvigorating job creation, rapid poverty reduction, and hastening economic transformation. All while adhering to prudent macroeconomic management,” Balisacan said.

Inflation accelerated to 6.4 percent in July, exceeding the Bangko Sentral ng Pilipinas' objective of 2-4 percent for the fourth consecutive month. In the first seven months inflation averaged 4.7 percent, mostly as a result of rising food and transportation expenses.

Balisacan noted that recent economic changes will enhance the business environment in the nation and draw in more foreign investment. He specifically mentioned the Public Service Act, the Foreign Investment Act, and the Retail Trade Liberalization Act as "game-changing reforms" that demonstrate the nation's openness to public-private partnerships (PPPs )and foreign investment.

“I still think that the way for us to move is not to close our doors. But obviously there are sectors that we’ll need to be quite sensitive about because they are politically sensitive sectors,” he said.

He also noted the NEDA's intention to review the Build-Operate-Transfer law's implementing rules and regulations (IRR), which is hated by economists and the private sector because it forces private proponents to shoulder more risk while relieving the government of liability for sluggish deliverables.

“The review aims to address the private sector’s concerns about the viability of PPPs while upholding the government’s objective,” Balisacan said.
“We are mindful of how investor decisions rely on the predictability of such regulations when envisioning their long-term plans that will require a significant amount of resources,” he added.

Tags: #economy, #inflation, #highincomestatus, #firsthalfof2040s


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