slide1 n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Cielito F. Habito, Ph.D. Professor of Economics & Director, PowerPoint Presentation
Download Presentation
Cielito F. Habito, Ph.D. Professor of Economics & Director,

Loading in 2 Seconds...

play fullscreen
1 / 41

Cielito F. Habito, Ph.D. Professor of Economics & Director, - PowerPoint PPT Presentation


  • 92 Views
  • Uploaded on

The Philippines Under 'Aquinomics’. Presentation on the Economic Performance and Outlook for MEPI. Cielito F. Habito, Ph.D. Professor of Economics & Director, Ateneo Center for Economic Research & Development Ateneo de Manila University. Overview. Where We Have Been: 50 Years A Laggard

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Cielito F. Habito, Ph.D. Professor of Economics & Director,' - dahlia


Download Now An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide1

The Philippines Under

'Aquinomics’

Presentation on the Economic Performance and Outlook for MEPI

Cielito F. Habito, Ph.D.

Professor of Economics & Director,

Ateneo Center for Economic Research & Development

Ateneo de Manila University

overview
Overview
  • Where We Have Been: 50 Years A Laggard
  • Where We Are Now: Key Economic Trends
  • What It All Means for Filipinos
  • Outlook & Imperatives
    • Economic Drivers & Downers
    • The Challenge of Inclusive Growth
    • Where We Need to Push
    • Outlook for Pharmaceuticals
    • Long Term Prospects
fifty years a laggard
Fifty Years A Laggard
  • In 1960, average income in RP was twice that of Thailand; now it is the reverse
  • Other East Asian economies’ GDP grew annually at 3.6-6.0%; RP only grew 1.4%
  • Per capita GDP has grown 19 times in China, 8 times in Thailand, 6 times in Malaysia & Indonesia, but only 2 times in RP
  • At current rates of per capita income growth, WB estimates it would take RP >200 years to reach the average per capita GDP of the OECD (developed) countries
slide5

Top Heavy GrowthBottom-Heavy Needs

  • Narrow: Growth is propelled primarily by a few leading sectors and geo-graphic areas
  • Shallow: Weak linkages to rest of economy – e.g., low domestic value-added exports
  • Hollow: Jobless growth; poverty-increasing growth
slide6

Top-Heavy Growth,Bottom-Heavy Needs

  • Poverty incidence rose from 30% in 2003 to 33% in 2006, and 37% in 2009 (NSCB)
  • Real per capita income fell 10% nationally, and fell in 50 provinces between 2003 and 2006 (NSCB)
  • Basic education enrollment rates dropped in 75% of provinces between 2002 & 2004 (PHDR 2009)
  • Wide disparities in life expectancy across provinces: Low - 53.4 (Tawi-tawi); High - 74.6 (La Union) (PHDR 2009)
slide7
a.k.a.Broad-Based Growth:

Sectorally

Geographically

Temporally

Wanted:

Inclusive Growth

assessing economic performance the pitik test
Assessing Economic Performance: The “PITIK Test”

The Essential Yardsticks (P-T-K):

  • Price Stability(Presyo)
  • Jobs (Trabaho)
  • Incomes (Kita)
slide9

Ateneo Center for Economic

Research and Development

The Economy Last Year & Now:Good News &Bad News

  • Prices: Rose faster than in 2009, but more slowly than projected; now ticking up again
  • Jobs:Jobs caught up with labor force growth – but job quality remains a challenge
  • Incomes/Output: Strong Overall
    • Manufacturing surged
    • Services saw robust growth
    • But agriculture declined
slide10

Ateneo Center for Economic

Research and Development

The Economy Last Year & Now:Good News &Bad News

  • Investment and Exports: strong rebound, even with dropping foreign investment inflows
  • Balance of Payments: favorable last year; has now turned negative
  • Peso: appreciating with weak dollar and amid “currency war”
  • Net Income Inflows: slows to single digit growth; now facing new threats
  • Fiscal Deficit: too big for comfort
slide11

Presyo:

Inflation Trends

2007-Present

9.3%

4.3%

3.8%

3.2%

2.8%

2007 2008 2009 2010 2100

slide13

Kita:

Incomes/Production (GDP):

2010: Renewed Industrial Vigor

  • Surge in Private Construction (19.1%) and Durable Equipment (25.7%)
  • Exports up 33.7% in Dollar values (25.6% in real terms)
  • Consumption growth surges in Q4 (7% from normal 4-5%)
  • Manufacturing up by double digits
  • Private services (esp. media) up 8.8% (media surged 31.4% in Q1)
  • Spoiler: Agriculture declines 1% (but bounced back in Q4)
gross regional domestic product 2008 2009
Gross Regional Domestic Product, 2008-2009

Bicol Region grew

fastest

4 Regions declined

slide17

Private Investment Surges…

Govt Spending Takes the Background

slide18

… even as FDI dips

Inflows Down, But Intentions Up

Top 2 Sources: Japan, Netherlands

89% in Manufacturing

slide21

The Economy in Human Terms

  • Poverty rose from 24.9% (2003) to 26.5% (2009) [Under old definition: 30% (‘03) to 33% (‘06) to 37% (‘09)]
  • No. of poor Filipinos up by 970,000, or 185,000 families between 2006 and 2009 (Poverty line: P7,017/month per family of 5)
  • Net elementary school participation rate down from 97% in 2001 to 85% in 2008
  • Net high schol participation rate down from 66% to 62%
  • Malnutrition incidence went up in most provinces
self rated poverty 49 of filipinos feel poor q4 2010
Self Rated Poverty: 49% of Filipinos feel poor (Q4-2010)

Lowest since Cory Aquino – but is it really?

sws q1 10 puzzle self rated poverty down but hunger up
SWS Q1-’10 Puzzle:Self-Rated Poverty Down But Hunger Up
  • Of the 4 million households reporting hunger in March 2010, only 2.6 million rated themselves as Poor.
  • A significant 1.4 million who suffered from hunger did not consider themselves to be Poor.
  • Living standards had dropped so low that standard of “poorness” has dropped (misery loves company)
why 2011 should be better
Why 2011 Should Be Better
  • Recovery from El Niño
  • Resurgence in investment (especially domestic)
  • Proven “immunity” to global slowdown
  • Remittances continue growth
  • “Rebalancing” of Asian growth toward more internal, intra-regional demand
why 2011 should be worse
Why 2011 ShouldBe Worse
  • Possible double-dip recession (W-shaped recovery) in the West?
  • European economies under threat
  • Middle East unrest and new inflation pressures
  • Peso appreciation (mixed effect)
  • Japan earthquake/tsunami and nuclear disaster
  • Medium Term: Heavy debt burden and continued fiscal pressures
where is the peso going
Where is the Peso Going?

Euro

Baht

Sing$

Peso

Rupiah

achieving inclusive growth where to push
Achieving Inclusive Growth:Where To Push
  • Revenues: Restore tax effort to 17%; mostly from collection/compliance boost; sin taxes, trim excess tax perks
  • Infrastructure:Massive catch-up program needed; needs above revenue boost &/or better BOT rules
  • Investment:Now exceeded by savings; confidence boost needed
  • Democratize Growth: Massive SME boost, asset reform, competition policy (esp. with PLDT-Digitel merger)
agriculture agribusiness
Agriculture & Agribusiness
  • End of El Niño droughts
  • Rebound from 4-quarter decline
  • Ongoing budget reforms promise positive results
  • DA to “steer” while LGUs “row”
  • Remittance-fueled consumer food demand may taper in short term due to external developments
tourism allied industries
Tourism& Allied Industries
  • Focused investments under Tourism Act of 2009 underway
  • Pocket open-skies policy to lower costs, hike tourist arrivals
  • Improved peace prospects in Mindanao; tourism a major thrust in Mindanao 2020 Plan
  • “Appreciation lag” of Peso vs. neighboring currencies can make PH relatively more attractive
business process outsourcing
Business Process Outsourcing
  • Sustained demand growth projected for long term
  • Indian firms now moving into Philippines
  • Need to address dwindling skilled recruitable personnel
  • Important driver of real property development sector
construction
Construction
  • Private construction is on a rebound (19.1% growth in 2010)
  • Massive infrastructure push (GAA & PPPs) is imperative & inevitable
  • Revenue performance needs clear improvement; PPP policy environment needs constant improvement
  • Huge unmet demand in low to medium-cost housing
manufacturing
Manufacturing
  • Electronics: Continued dominance
  • Food & Beverages: Rising average incomes; elastic demand for processed food steady medium to long-term growth
  • Design-based manufactures: Innate competitiveness (e.g. Cobonpue, Lhuillier)
pharmaceuticals
Pharmaceuticals
  • Projected annual PH market growth rate to 2015: 6.9% (BMI)
  • Drivers:
    • Cheaper Medicines Act (Elastic demand leads to higher gross sales)
    • Mergers/industry consolidation (Greater stability)
    • Universal PhilHealth coverage by 2015 (Wider market)
slide37

Economic Outlook: 2011

  • Presyo:
    • Inflation projected to inch upward to 5-6%
  • Trabaho:
    • Marginal improvement at 7-8% unemployment
  • Kita:
    • Consensus GDP growth projection: 5-6%
long term outlook building on inherent strengths
Long Term Outlook:Building on Inherent Strengths
  • Exceptionally rich natural & human resources
  • Strategic geography (transshipment, shipbuilding/repair, tourism)
  • Favorable global, regional trends (e.g. aging, medical tourism, outsourcing)
  • Resilient, adaptable people, in high demand worldwide
  • Completing the picture: Good

Governance is key!

checklist for good governance
Checklist For Good Governance
  • Quality Appointments to Cabinet, revenue and regulatory agencies
  • Zero Tolerance for Corruption: an unequivocal policy
  • Decentralized Governance where NG “steers,” LGUs “row”
  • Participatory Mechanisms:bring people to the gov’t & gov’t to the people
  • Streamline Government Processesto reduce cost of doing business
slide40

Post Script:

Stories from the Countryside

  • Bgy. Lopero, Jose Dalman, Z Norte

Carabaos, Not Fertilizers:A Farmer’s Plea

  • Magsaysay, Davao del Sur

Diversified Organic Farming System: A Mayor’s Lament

  • Upland Barangay, Sarangani

Horses vs. FMR: A Pragmatic Farmer

  • Bottom-up devt; Solutions need not be sophisticated nor expensive!
slide41

Thank You!

cfhabito@gmail.com