IIn less than two months, Filipinos will elect the country’s next leaders who will have to lead a government that will inherit the enormous task of solving the lingering socio-economic problems caused by the COVID-19 pandemic.
In recent months, our economy has shown encouraging developments. The Philippine Statistics Authority (PSA) reported that the economy grew 7.7% in the fourth quarter of 2021, translating to 5.6% growth for the full year, exceeding the government’s target of 5 to 5.5%. Additionally, a few weeks ago, several regions in the Philippines, including the National Capital Region (NCR), were placed under Alert Level 1, allowing more economic activities to resume.
But the question is, will the Philippines be able to maintain its trajectory towards long-term economic recovery?
In January 2022, the PSA announced that the country’s unemployment rate was 6.4%, resulting in 2.93 million Filipinos out of work. This figure was slightly lower than the 6.6% recorded the previous month. However, the underemployment rate increased slightly to 14.9% in January 2022 from 14.7% in December 2021.
Despite the positive GDP growth rates achieved since the second quarter of 2021, this does not appear to reflect the realities on the ground, as millions of Filipinos are still out of work or seek additional work hours. Therefore, what the country seems to be experiencing right now is jobless growth. On top of that, the growing debt of the country is something that needs to be dealt with in the near future. The latest data from the Bureau of the Treasury (BTr) shows that the total stock of national government debt at the end of January 2022 stood at a record 12 trillion pesos. This would ultimately have to be paid for by every Filipino through possibly higher taxes.
A more practical way to solve all these problems and maintain the country’s positive economic growth trajectory is to strengthen collaboration between the government and the private sector. Since the private sector has always proven to be a reliable and capable partner of government in the midst of an emergency such as during the height of the COVID-19 pandemic in 2020, it could also play a key role in the country’s path to recovery. .
To corroborate this, a survey conducted by Social Weather Stations (SWS) in October 2021 revealed that 82% of Filipinos believe that the growth of the Philippine economy will be accelerated if the government engages more actively with the private sector.
Recently at the Stratbase ADR Institute, in partnership with US consultancy BowerGroupAsia (BGA), we hosted our first virtual business roundtable for this year, titled “Business Agenda for the New Administration”. This quarterly event brought together esteemed members of the business community to discuss a possible agenda to be adopted by the country’s next group of leaders who will lead the economy towards recovery. Given the post-pandemic scenario, the next administration should prioritize expanding investment opportunities, creating jobs and livelihoods, and reducing poverty, hunger and reducing growing inequalities.
During the forum, former Deputy Governor of Bangko Sentral ng Pilipinas (BSP), Diwa Guinigundo, emphasized the need to steer the country towards more investment-led growth. “Investment-led growth has always been the goal of public policy because it promotes sustainable and resilient economic growth…The fundamental challenge is to create an enabling environment for investment, whether domestic or stranger,” he said.
Meanwhile, Dr. Vicente Paqueo, Distinguished Visiting Scholar at the Philippine Institute of Development Studies (PIDS), noted that a critical issue that needs to be addressed by the next administration is the ongoing challenge of providing people job and income security. This can be addressed by including rapid labor productivity growth in the government’s agenda, especially since high and sustained productivity growth is essential for modern economic growth and development.
There is no denying the invaluable role that the business community plays in the growth and development of a nation. As BGA President and CEO Ernest Bower IV pointed out, “A confident new administration and a strong partnership with business can change this and generate new opportunities, equitable growth, create jobs and generate more prosperity than ever.”
The country’s next administration should be one that recognizes the crucial role that the private sector plays in development, particularly through its expertise and ability to attract investment. In addition to strengthening multi-sector collaboration, the government should make efforts to create an enabling environment for private sector development and full prosperity of economic activities. If an administration is well supported by a strong private sector, half the task for long-term recovery is already done, since the burden of achieving fundamental goals is shared fairly and responsibly.
Again, our next group of leaders should maintain the fundamental anchor of the rule of law and promote good governance, as these are the foundations on which stable partnerships are properly created and maintained.
Victor Andres “Dindo” C. Manhit is the President of the Stratbase ADR Institute.