Inclusive economy to sustain PHL growth

INCLUSIVE growth is necessary in order for the Philippines to sustain its growth momentum according to Finance Secretary Carlos Dominguez III.

In a recent speech before the Economic Journalists Association of the Philippines (EJAP), Dominguez pointed out that in the Philippines, market information and other issues related to the economy are kept from ordinary Filipinos and exchanged within a narrow section of the population, “a testament to our economy being an exclusive rather than an inclusive one.”

“This situation cannot persist for too long. Unless our economy becomes truly inclusive, with ordinary folk making market decisions and shaping economic development, we cannot sustain a high-growth momentum,” he stressed.

He cited the “magnified role” of economic journalists in emerging economies like the Philippines to make the economy “inclusive” for ordinary people, who rely on the news not only to get the facts straight but also to widen their financial and economic literacy.

“You, the economic journalists, are the evangelists of modern economic thinking. We can push the reforms only as far as our citizens grasp the strategic significance of what we are trying to do,” Dominguez added.

 

Singapore’s Example

As an example of an inclusive economy, Dominguez mentioned that it is no longer surprising to see cab drivers in Singapore scanning the newspapers’ stocks pages and analyzing the performance of listed companies while waiting for passengers because, they, too, invest in the stock market.

“In these advanced economies, the capital markets are as deep-rooted as the economy is inclusive. Regardless of what their day jobs are, ordinary citizens help drive up the savings and investment rates by participating in financial products. The man-on-the-street is involved in market decisions that make the economy what it is,” he continued.

The finance chief said the reforms being implemented and pushed by the Duterte administration are meant not only to sustain the high growth rate at 7 percent and reduce poverty by 14 percent in 2022, but also aims to widen the base of economic decision-making in the country to include ordinary folk.

Dominguez said the Duterte administration can only go so far in pushing the reforms it wants to do, which is why it needs the support of economic journalists whose ability to communicate would allow people to understand the confusing jargon and the strategic importance of the government’s plan to sustain high growth and make it a truly inclusive one.

“I look forward to working closely with you in the coming weeks and months. Ours is a common crusade to build the economic literacy of our public. That lays the real foundation for inclusive economic growth,” Dominguez pointed out.

He also averred the country’s Gross Domestic Product (GDP) expansion of 6.8 percent in 2016 underscored a domestic economy in “pretty good shape” and well on its way to sustaining its growth momentum over the medium term, on the back of the Duterte administration’s bold initiatives to keep it on its upward trajectory despite global market volatility.

Dominguez explained that “the fast GDP expansion has buoyed government expectations of meeting its growth targets in 2017 and, with the hoped-for timely congressional approval of the first package of the CTRP, of sustaining its ambitious inclusive-growth agenda to attract more investments, create enough jobs, reduce the poverty incidence by almost half, and transform the Philippines into an upper middle-income country by 2022.”

He said the economy is well positioned to grow between 6.5 percent to 7 percent this year—as projected by most international and local financial institutions and experts—given “the government’s resolve to further strengthen its macroeconomic fundamentals and maintain solid buffers to cushion the effects of global unknowns like the coming US Federal Reserve hikes and inward-looking or protectionist policies by certain countries that could undermine international trade.”

 

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Thursday, 24 January 2019
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