Economic managers on Monday claimed that structural reforms and policies have made the Philippines highly vulnerable to global risks.
Finance Minister Benjamin Diokno told potential European investors that these strong macroeconomic fundamentals allowed the Philippines to “beat the pandemic” and make it “one of the fastest growing economies in the Asia-Pacific region.”
He spoke in Frankfurt, Germany during the first leg of the 2023 Philippine Economy Brief (PEB) that will run through Friday, January 27, with another stop in London.
Diokno highlighted the rebound achieved in the wake of the 9.5 percent contraction in 2020, with gross domestic product rebounding to an annual 7.7 percent by the end of September last year.
Fourth-quarter and full-year results will be released this Thursday. Diokno has previously said 2022 growth will be at least 7.5 percent, on the higher end of the government’s target of 6.5 to 7.5 percent.
“Our dramatic recovery was the result of deliberate, well-crafted structural reforms and a determination to reset policies in times of crisis,” said the Finance Minister, noting that these have paved the way for the reopening of the economy, which has improved the ease of doing business. Industries were allowed to grow.
The reforms include, among others, the enactment of the Corporate Recovery Act and corporate tax incentives, and liberalization of the renewable energy sector to allow full foreign ownership.
Diokno also claimed that the government has created a “more competitive” and enabling environment for public-private partnerships that has allowed it to direct more public resources to sensitive areas.
Meanwhile, the controversial Maharlika Investment Fund will be a vehicle for private and public sector funds to be used to develop infrastructure, create jobs, increase income and boost growth.
Overall, “our strong economic base is a fertile ground for your investments,” Diokno said.
Meanwhile, Amina Pangandaman, Secretary for Budget, spoke about the expenditures that will be prioritized this year in line with the Philippine Development Plan 2023-2028.
The agriculture budget, for example, was said to have increased by 40 percent from last year as the government sought to add more farm-to-market farm roads and facilities to boost productivity and ensure food security.
Infrastructure – public, digital and social – will be upgraded to create an environment conducive to growth, Pangandaman added, with P106 billion worth of projects earmarked for the transport division.
As for social services, 896.08 billion pesos has been programmed for education, and it remains the number one priority as laid down in the Constitution. The Ministry of Health will receive 314.7 billion pesos, while it will allocate 199.5 billion pounds to develop social welfare.
To ensure the longevity and continuity of the program, Pangandaman stressed, “We have put in place legislative and budget reforms to protect the integrity of our budget process.”
PEB is organized by Bangko Sentral ng Pilipinas in partnership with the British Embassy in the Philippines, Philippine Embassies in Europe, and banks such as HSBC, UBS, Deutsche Bank, and Morgan Stanley, among others.