Sustaining inclusive growth amid risks and shocks


The Philippine economy continues to accelerate, amid political risks and uncertainty.  The World Bank and the Asian Development Bank project a 6.5-percent to 6.9-percent GDP growth rates in the next two years. One important characteristic of the growth the past seven years is its trend toward inclusivity—reduction in poverty incidence, lower unemployment, managed inflation, and because of the economic expansion, bigger budget for basic services for the poor and lower income classes.

But how can this kind of growth be sustained?

First, growth must continue at these higher levels­—6.5 percent to 7.5 percent. This growth, of course, must be biased toward the creation of quality employment, especially in the manufacturing and agribusiness sectors. Presently, there seems to be a firewall  between the political and economic arenas, where any  noise or disruption in the former has negligible effects on the workings of the latter.   The firewall must then be strengthened. Negative political events must be contained and managed well, so as not to dampen economic productivity and expansion. There are also initiatives at the political arena, which would certainly affect the economy one way or another i.e., fiscal and tax reforms, the violence and conflict in Marawi City and the creeping martial law.  As such, the firewall is not impenetrable and can be breached and broken any time. Expectations play a key role in actual investment decisions. This is why we need to maintain an environment that investors perceive has low to moderate risks and conducive to give them adequate returns to their capital.  Investments, as a recent driver of economic growth, must be sustained.

Second, we must be able to continue to reduce the number of chronically poor Filipinos.  The Pantawid Pamilya Pilipino Program (4Ps) has been an important component of a poverty strategy to lift people from deprivation.  The extra cash from conditional subsidy is usually utilized by households to augment their food expenditures and, thus, contributes to better health and nutrition of their children. The 4Ps must definitely be continued and even expanded.  As the program also promotes human capital development, through the education and health of children, poverty reduction will even accelerate in the next few years as they grow up and get better chances of employment in the labor market.

Third, while almost 2 million Filipinos were lifted out of poverty in recent years, many of these are still vulnerable to go down the poverty lane.  These people are included in around a third of the population who are susceptible to various types of shocks and risks, which can bring their incomes below the poverty threshold. Their place above the poverty line must be secured through enhanced social protection programs. Targeting the poor and vulnerable can now be facilitated because of a comprehensive database of the government that include poor and low-income households all over the country called “Listahanan”.

Listahanan, or the National Household Targeting System for Poverty Reduction, is an information management system that employs geographic targeting, household assessment and validation, in order to provide national government agencies, development partners and other social protection actors with information on who and where the poor and vulnerable are in the Philippines.  Because of this database, different agencies may be able to design various types of social-protection programs e.g., social  insurance, safety nets and labor market interventions that can respond to the various risks confronting Filipino households.

Fourth, government spending in infrastructure, including housing must be accelerated.  The “Build, Build, Build” mantra should be realized, as this will employ a large number of people coming from poor and low-income households. Given limited resources by government, partnership with the private sector and official development assistance from friendly neighbors will further boost expenditures for infrastructure. It will also be good if such strategy will target regions where the building of these relevant infrastructures will further boost the productivity and incomes of people in those areas.

Last, government should further strengthen our disaster risk response and management capacities.  Facilities, like the Disaster Response Operations Monitoring and Information Center of the Department of Social Welfare and Development (DSWD)  is responsible for the gathering, curating, consolidation, presentation  and dissemination of information related to all phases of disaster response undertaken by the DSWD. Through this online facility, the public may view and download information sourced from the National Disaster Risk Reduction and Management Council and other partner agencies. Even potentially vulnerable families from any region can confirm if they are exposed to hazards based on the information provided by the Philippine Statistics Authority and the DSWD Listahanan’s figures.  Data sets of evacuation centers and situational reports, status of relief resources in warehouses and reserve funding available for emergency response can also be viewed in the web site. Predictive analytics and maps for situational awareness and visualization can also be accessed from the same site.

As the country embarks on a higher path of economic growth, it is also the government’s task to ensure that an increasing number of people will benefit from such expansion and that these people become resilient in the face of growing risks and shocks.


* Dean and Professor of Economics, School of Social Sciences, Ateneo de Manila University

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