Philippine Development Plan 2011-2016
In Pursuit of Inclusive Growth Inclusive growth means, first of all, growth that is rapid enough to matter, given the country’s large population, geographical differences, and social complexity. It is sustained growth that creates jobs, draws the majority into the economic and social mainstream, and continuously reduces mass poverty. This is an ideal which the country has perennially fallen short of, and this failure has had the most far-reaching consequences, from mass misery and marginalization, to an overseas exodus of skill and talent, to political disaffection and alienation, leading finally to threats to the constitution of the state itself.
Macroeconomic Policy Growing output and employment are the preconditions for progress in almost all social and economic aspects of development. Productive employment and rising incomes for the vast majority over a long period can do more to combat poverty decisively than any direct assistance government can ever provide.
It is private actors – from the smallest self-employed entrepreneurs to the largest conglomerates – that create productive jobs and incomes. Government’s responsibility however – through fiscal and monetary policies – is to create an environment for vigorous economic activity, as well as to ensure that enough gains from growth are set aside for larger social purposes or channeled into social investments that facilitate future growth. These objectives are achieved by government decisions regarding the size and direction of public spending and taxation (fiscal policy) and by decisions regarding the control of the nation’s money supply (monetary policy).
Competitive Industry and Services Sectors Several measures of competitiveness reveal fundamental weaknesses in major development aspects compared to the rest of the world. Compared with its neighbors, the country’s economic performance in terms of investments, exports and competitiveness is unsatisfactory and need to be reversed. The Philippine economy over the past years has been characterized by a reduced share of manufacturing sector in the country’s gross domestic product (GDP) and declining gross domestic investment rate.
Enabling the industry and services sectors to contribute significantly to economic growth and employment requires addressing a number of constraints to their development. Strategies shall therefore be pursued to help raise the competitiveness of industries by improving the business environment; raising productivity and efficiency and inculcating quality consciousness among manufacturers and producers to offer quality goods and services comparable with global brands.
Business competitiveness will be enhanced by improving governance, strengthening economic zones, and strengthening national brand identity/awareness. To increase productivity and efficiency, government shall focus interventions on key priority areas, provide firm level support to MSMEs, increase market access, expand industry cluster development and intensify the culture of competitiveness. Proactive measures to empower consumers, promote competition and enforce trade regulations shall also be pursued.
Competitive and Sustainable Agriculture & Fisheries Sector The agriculture and fisheries sector provides food and vital raw materials for the rest of the economy. It is itself a significant market for the products and services of the non-agricultural economy. As the sector grows and modernizes, it releases surplus labor to the industry and services sectors. Rising productivity and efficiency in the sector are critical in maintaining the affordability of food and purchasing power, especially among the poor. The sector’s development is therefore vital in achieving inclusive growth and poverty reduction as well as attaining the targets under the MDGs.
The country, however, exhibits a slower structural transformation than other East Asian countries. The shares of agriculture in GDP and total employment have continued to decline, but the transfer of the labor released from this sector to higher-productivity jobs in industry and services has lagged owing to low skill levels among agricultural workers and distortions in other economic sectors.
Increasing demands on the sector’s output have also put pressure on its natural resource base. Unsustainable practices employed to improve yields have resulted in land degradation and problems of water availability. Climate change has exacerbated the inherent vulnerabilities of the sector. Development efforts need to focus on transforming the sector into one that is not only highly productive but also climate resilient, environment-friendly, and sustainable.
Accelerating Infrastructure Development The Plan’s infrastructure development program aims to contribute to inclusive growth and poverty reduction. It will support the performance of the country’s economic sectors and ensure equitable access to infrastructure services, especially as these affect the people’s health, education, and housing. Toward these ends, the government will accelerate the provision of safe, efficient, reliable, cost–effective, and sustainable infrastructure.
Towards a Resilient and Inclusive Financial Sector The financial sector intermediates claims between savings and investors. The credibility and stability of financial institutions and the relative attractiveness of various financial instruments to borrowers and lenders alike determine how much saving will mobilized, how much it stays in the country to be invested, and how this is to be allocated among the various firms and industries. Together with the state of confidence and long-term expectation, therefore, the stability and performance of financial institutions such as banks, equity and bonds markets, insurance companies, and other financial entities have an indirect but vital bearing on investment and the growth of output and employment in the country.
Good Governance and the Rule of Law Good governance sets the normative standards of development. It fosters participation, ensures transparency, demands accountability, promotes efficiency, and upholds the rule of law in economic, political and administrative institutions and processes. It is a hallmark of political maturity but also a requisite for growth and poverty reduction, for there are irreducible minimum levels of governance needed for large-scale investment to occur and for social programs to be supported.
A cornerstone of good governance is adherence to the rule of law, that is, the impersonal and impartial application of stable and predictable laws, statutes, rules, and regulations, without regard for social status or political considerations.
This chapter assesses the quality of governance in the country and identifies key governance challenges that constrain development. It then lays down corresponding strategies to achieve good governance anchored on the rule of law, and provide an enabling environment for national development.
Peace and Security Peace and security shall be achieved in support to national development. The government shall exert all efforts to win peace and ensure national security. The peace process shall center on the pursuit of negotiated political settlement of all armed conflicts and the implementation of complementary development tracks to address its causes. This shall be anchored on conflict prevention and peace building in conflict-affected areas. On the other hand, national security shall involve the whole-of-nation approach, focusing on internal stability, upholding the sovereignty and territorial integrity of the state, capability and preparedness against natural calamities and disasters, and reform and modernization of the security sector.
Conservation, Protection and Rehabilitation of the Environment and Natural Resources The country is widely acknowledged as having an outstanding endowment of natural resources, which could provide essential ecosystem services to the population. Demands arising from development and utilization activities, population expansion, poor environmental protection, and external factors such as climate change, however, have placed the country’s environment and natural resources under grave threat. For the medium-term, an environment that is healthy, ecologically balanced, sustainably productive, climate change resilient, and one that provides for present and future generations of Filipinos is envisioned. This vision will be pursued through an integrated and community-based ecosystems approach to environment and natural resources management, precautionary approach to environment and natural resources, sound environmental impact assessment (EIA) and cost-benefit analysis (CBA). These, then, are all anchored on the principles of shared responsibility, good governance, participation, social and environmental justice, intergenerational space and gender equity, with people at the core of conservation, protection and rehabilitation, and developmental initiatives.