Philippines joining Asian tigers’ ranks up to new leader

Steps to be taken by the successor of President Aquino would be pivotal for the country’s effort to join the ranks of Asian ti­gers, an economic expert both said.

The next leader must weigh policy choices holis­tically, said Dr. Dan Stein­bock, an economic expert affiliated with the Differ­ence Group.

“Pure market analysis is not enough. There should be comprehensive consid­eration of not only the eco­nomic growth but also the non-economic growth,” he said.

Despite the fact that emerging Asia was not as of the world by the 2008 fi­nancial crisis, and the Phil­ippines’s growth consistently rose while the original leading emerging economies strug­gled, the country is not im­mune to global headwinds, according to Steinbock, who spoke before first public sem­inar for 2016 of the Philippine Institute for Development Studies.

“Take the case of plung­ing oil prices. The recent de­cline in oil prices has negative­ly impacted countries that are highly dependent on oil, such as the Gulf economies. While they seem far away, the Phil­ippines remains vulnerable, as it relies heavily on remittances from overseas Filipino work­ers in the Middle East. A de­cline in the economic health of the Gulf certainly affects Filipino laborers,” he said.

Steinbock urged Philip­pines leaders and policymak­ers to focus on medium-term and long-term plans.

He said that in the context of increasing geopolitical ten­sions over territorial disputes, the refugee crisis, the decel­eration of growth in Japan, China, and other emerging economies, the breakdown of confidence in the Europe­an Union membership, and leadership changes in the United States as well as in the Philippines, the country must rise to the challenge of achiev­ing and maintaining inclusive and sustainable growth.

The Philippines, he not­ed, remained behind on pol­icies and programs that are necessary to take advantage of its strengths and opportuni­ties.

There is no better time to capitalize than when the world order is reorganizing, and Philippine economic growth is comparatively good, Steinbock said, adding: “But first the country has to ad­dress its shortcomings in in­frastructure development and miniscule investments in re­search and development, and open up to more foreign di­rect investments. It would be a shame if the Philippines did not act to get what it deserves, especially now that emerg­ing economies are driving the world economy.”

Stein­bock founded the Difference Group, a think tank that fo­cuses on international busi­ness, international relations, investment and risk among the major advanced econo­mies (G7) and large emerging economies.

Steinbock is a consul­tant for international orga­nizations, government agen­cies, financial institutions, multinational corporations (MNCs), industry associa­tions, chambers of commerce, and non-government organi­zations (NGOs). He serves on the media advisory boards of Fortune and Bloomberg Busi­nessWeek.

Earlier, the Joint Foreign Chambers (JFC) said in a pol­icy paper that Mr. Aquino’s successor should focus on agriculture to achieve broad-based and inclusive growth.

The JFC said in its paper titled, “Bond Inclusive Re­forms for Agribusiness for the Next Decade,” said “a sense of urgency is needed to unleash, modernize and diversify the business of agricultural and food production.”

The paper noted that while the Philippines has been shifting away from an agrar­ian-based economy, with the broad agriculture sector cur­rently accounting for a little over 10 percent of gross do­mestic product (GDP), close to one third of the workforce or 12 million out of the 38 million able-bodied Filipi­nos rely on agriculture for their livelihood.

The paper said recent data revealed that agricul­tural output remained flat in 2015, growing by a mere 0.11 percent (from P788 bil­lion in 2014 to P789 billion last year).

Over the past six years (2010-2015), the agriculture sector grew by an average of 1.3 percent, well below the average 6.2 percent growth rate of the broader economy.

“While the Philippines can no longer claim to be an agrarian society, the agricul­ture sector still plays an im­portant part in the economy, particularly for rural house­holds who depend largely on exploiting the land for their livelihood,” the paper said.

It said more than 73 per­cent of the country’s poor resides in rural areas, where agriculture provides an eco­nomic lifeline and remains crucial to achieving inclusive growth.

Among the poorest in the country, farmers and fishermen face the “highest incidence of poverty,” or an estimated 38 percent, which has shown no significant change in over a decade, it added. LUIS LEONCIO