| Aquino's SONA gains positive response from economists (philstar.com) July 24, 2012 |
"We are now entering into a virtuous cycle of governance reforms and increasing business confidence translating into increases in investments and economic activities. This in turn will create more jobs and reduce poverty." - Fernando T. Aldaba, Former Philippine Economic Society (PES) President
MANILA, Philippines (Xinhua) - After President Benigno Aquino III bared the current track of the economy in his hour and a half-long State of the Nation Address (SONA), some local economists believe that the Southeast Asian country may already be entering a virtuous cycle of governance reform and economic growth.
Former Philippine Economic Society (PES) President Fernando T. Aldaba said this may be possible given determination of the administration to institute governance reforms. This, he said, is also giving the economy some boost in terms of creating jobs and putting a dent on poverty.
Aldaba said that if the economy continues its current track and "barring any great disaster," it is possible that the country may reach an average economic growth of 6.5 to 7 percent in the next four years.
"The President has clearly shown how good governance benefits the economy in terms of the government being able to afford better and bigger investments in human capital and in infrastructure and in terms of leveling the playing field," Aldaba said. "We are now entering into a virtuous cycle of governance reforms and increasing business confidence translating into increases in investments and economic activities. This in turn will create more jobs and reduce poverty."
The President highlighted the country's strong macroeconomic fundamentals, most notably the 6.4 percent Gross Domestic Product (GDP) growth in the first quarter. He said this is the highest in Southeast Asia and second only to China in Asia.
Aquino has also stressed that the administration was able to create 3.1 million jobs since it assumed office in 2010. This, he said, has caused the country's unemployment rate slowed to 6.9 percent in April 2012.
"The stars are aligned for the rising tiger: reforms to widen our fiscal base, conditional cash transfers to protect the bottom poor, strong OFW (Overseas Filipino Workers) inflows, a surging BPO sector, bullish investor confidence, and a real estate boom," Social Weather Stations (SWS) Director Dennis M. Arroyo said.
However, to attain growth and to provide jobs for Filipinos, some issues need to be addressed. For one, Arroyo mentioned that he hoped the government can deliver on the Public Private Partnerships (PPPs) as well as the country's territorial dispute with China.
Former Asian Development Bank (ADB) Lead Economist Ernesto Pernia said that while he does not yet see the Philippines leapfrogging to an Asian Tiger status, he said that to attain this status, more needs to be done on the country's infrastructure constraints.
Pernia added that there is also a need to minimize red tape in government and push for reforms on taxes, particularly on the sin taxes and the Reproductive Health Bill that are currently pending in Congress.
"(The SONA was) generally fair. Next tiger? (That will be a) long and steep climb!" Pernia said.
Aldaba also said the labor market must also experience some reforms particularly on hiring and firing as well as the security of tenure of workers.
In 2011, the Department of Labor and Employment (DOLE) issued Department Order 18-A which aims to end the 5-5-5 employment scheme where workers are hired for just five months and then, after the end of their five-month contract, they are rehired for another five months.
"Yes, labor market reforms related to hiring, firing, security of tenure and social protection. But government must be adept in crafting these through social dialogue with business and labor," Aldaba said.
Former Philippine Economic Society (PES) President Fernando T. Aldaba said this may be possible given determination of the administration to institute governance reforms. This, he said, is also giving the economy some boost in terms of creating jobs and putting a dent on poverty.
Aldaba said that if the economy continues its current track and "barring any great disaster," it is possible that the country may reach an average economic growth of 6.5 to 7 percent in the next four years.
"The President has clearly shown how good governance benefits the economy in terms of the government being able to afford better and bigger investments in human capital and in infrastructure and in terms of leveling the playing field," Aldaba said. "We are now entering into a virtuous cycle of governance reforms and increasing business confidence translating into increases in investments and economic activities. This in turn will create more jobs and reduce poverty."
The President highlighted the country's strong macroeconomic fundamentals, most notably the 6.4 percent Gross Domestic Product (GDP) growth in the first quarter. He said this is the highest in Southeast Asia and second only to China in Asia.
Aquino has also stressed that the administration was able to create 3.1 million jobs since it assumed office in 2010. This, he said, has caused the country's unemployment rate slowed to 6.9 percent in April 2012.
"The stars are aligned for the rising tiger: reforms to widen our fiscal base, conditional cash transfers to protect the bottom poor, strong OFW (Overseas Filipino Workers) inflows, a surging BPO sector, bullish investor confidence, and a real estate boom," Social Weather Stations (SWS) Director Dennis M. Arroyo said.
However, to attain growth and to provide jobs for Filipinos, some issues need to be addressed. For one, Arroyo mentioned that he hoped the government can deliver on the Public Private Partnerships (PPPs) as well as the country's territorial dispute with China.
Former Asian Development Bank (ADB) Lead Economist Ernesto Pernia said that while he does not yet see the Philippines leapfrogging to an Asian Tiger status, he said that to attain this status, more needs to be done on the country's infrastructure constraints.
Pernia added that there is also a need to minimize red tape in government and push for reforms on taxes, particularly on the sin taxes and the Reproductive Health Bill that are currently pending in Congress.
"(The SONA was) generally fair. Next tiger? (That will be a) long and steep climb!" Pernia said.
Aldaba also said the labor market must also experience some reforms particularly on hiring and firing as well as the security of tenure of workers.
In 2011, the Department of Labor and Employment (DOLE) issued Department Order 18-A which aims to end the 5-5-5 employment scheme where workers are hired for just five months and then, after the end of their five-month contract, they are rehired for another five months.
"Yes, labor market reforms related to hiring, firing, security of tenure and social protection. But government must be adept in crafting these through social dialogue with business and labor," Aldaba said.
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