DEVELOPMENT IN THE 21ST CENTURY: THE CRITICAL DIMENSIONS AS TO WHO

BENEFITS FROM WHOM AND FROM WHAT

INTRODUCTION:

In 2017, the Philippines was among the top three growth performers in the East

Asia region. Only Vietnam and China performed better. The Philippines growth

performance slightly weakened in 2017 to 6.7 percent year-on-year from 6.9 percent in

2016. Growth was anchored in strong exports, while investment growth significantly

slowed and consumption growth moderated. The Philippines’ annual exports rose

sharply in 2017 and became the main engine of economic growth, while imports

continued to grow by double-digits. Investment growth slowed in 2017, following two

consecutive years of rapid expansion, and climbing inflation slowed real wage growth

and contributed to a moderation in private consumption growth.

Monetary and fiscal policy remained accommodative. Both fiscal expenditure and

revenue increased in 2017 compared to 2016. The fiscal deficit narrowed, as the

government narrowly missed its expenditure target, despite improved budget execution.

Infrastructure expenditures exceeded their programmed target, and focused on repair

and rehabilitation projects, while most of the planned flagship investment program has

not started construction yet. Revenue collection in the Philippines is still among the

lowest in the region, but as a key revenue mobilization policy, the Philippines

successfully passed its first package of tax reforms in December 2017, which is

estimated to generate an additional Php82.3 billion in public revenue in 2018. Rising

inflation started to put a strain on the Bangko Sentral ng Pilipinas’ (BSP)

accommodative monetary policy in 2017, and the inflation rate exceeded the ceiling of
the inflation target range in early 2018. Nonetheless, the BSP’s monetary board kept the

policy rate fixed at 3.0 percent.

The country’s medium-term growth outlook remains positive. The Philippine

economy is projected to continue on its expansionary path and grow at an annual rate

of 6.7 percent in both 2018 and 2019. In 2020, growth is expected to level at 6.6

percent. The economy is currently growing at its potential, making productive

investment in physical and human capital essential for the economy to continue to grow

along its current growth trajectory. Investment growth hinges on the government’s ability

to effectively and timely implement its ambitious public investment program.

Domestic risks are becoming more prominent. Inflationary pressure is expected

to intensify in 2018 due to both domestic and external factors. The Philippine economy

is also at risk of overheating. The implementation of the public infrastructure program is

vital to the country’s growth outlook, as private investment is expected to weaken.

Prudent fiscal management and the implementation of the government’s tax reform

agenda could help secure the country’s fiscal sustainability. External risks remain

present, especially a faster-than-expected policy normalization in advanced economies

that could trigger financial volatility and increase capital outflows from the Philippines.

Renewed protectionist sentiments in several advanced economies will also elevate

policy uncertainty, which may disrupt trade and investments.

High-quality jobs and faster growth of real wages are essential to achieve shared

prosperity and inclusive growth. In recent years, the Philippine economy has made

great strides in delivering inclusive growth, evidenced by the declining poverty rates and

a falling Gini coefficient. Unemployment has reached historic low rates, but
underemployment remains high, near its 18 to 20 percent decade-long average. More

importantly, unlike its high-performing East Asian neighbors with booming

manufacturing sectors that provide large numbers of labor-intensive jobs, a majority of

Filipino workers that transition out of agriculture generally end up in low-end service

jobs. Thus, while employment increased between 2006 and 2015, mean wages

remained stagnant, with only a four percent increase in real terms over the same period.

High-quality jobs and faster growth of real wages are the missing links to higher shared

prosperity

DISCUSSIONS:

In discussing Development in a national scope several areas or trends should be

considered I the global and regional trends where the country tribes. Thus this paper

considers a review on the Global and Regional Trends and Prospects Various inter-

related international trends projected over the medium term were considered for the

Philippine Development Plan (PDP) 2017-2022.

Economic Trends

Global economic growth is assumed to remain sluggish without an immediate

prospect of renewed vigor. The outlook is clouded by uncertainty on the policy stance of

the United States’ (US).

The slowdown in emerging markets, including China, is expected to continue.

However, the ASEAN-5 is expected to recover from this slowdown, with an average

growth of 5.4 percent in 2017-2022.

 Global trade is expected to improve slightly, growing by 3.9 percent annually over

the period 2017-2022. The rise of global production networks and buying chains, among

other trends, will further drive integration.

Over the medium term, global foreign direct investment flows are projected to

surpass US$1.8 trillion in 2018, reflecting an increase in global growth. Monetary

policy in the US will likely move towards normalization, while those in the European

Union and Japan will be accommodative to support the recovery of their economies.

Political Trends

The political landscape will continue to be affected by the backlash resulting from

the global financial crisis (GFC). Already, the GFC has given rise to populist and

protectionist regimes, like the United Kingdom’s “Brexit” referendum results and the US

election results.

The Middle East will probably continue to be a region of instability, while the

Philippine claim on the West Philippine Sea is likely to remain unresolved.

Social and Demographic Trends

The number of senior citizens in the world is projected to grow to 1.4 billion by

2030, accounting for more than 25 percent of the populations in Europe and Northern

America, 20 percent in Oceania, 17 percent in Asia and Latin America, and 6 percent in

Africa. The Philippines will remain relatively young for some time.
 Inequality may persist in some nations but is likely to decline as many low- and

middle-income countries grow faster than rich ones.

Innovation is predicted to originate in middle-income economies with strong

research and development base, although there is a shift towards private funding from

public spending.

Promising new technologies such as big data analytics, the internet of things,

nanomaterials, and even blockchain technology may potentially disrupt and change the

way things are done. Environmental Trends

There is a wide consensus among professionals about gradually rising

temperatures and climate volatility. According to the Intergovernmental Panel on

Climate Change, average global temperature increased by 0.85oC between 1880 and

2002, resulting in significant yield reductions on major crops such as wheat and maize.

The world’s oceans also continue to warm and polar ice caps continue to melt. Average

sea levels are predicted at 24-30 cm by 2065.

The Paris Agreement of 2015 seeks to address climate change although

potential changes in US policy could undermine implementation. Nevertheless, the local

impact of climate change is driving stakeholders to push for sustainable development.

Overlay of Economic Growth, Demographic Trends, and Physical Characteristics

Economic and Demographic Trends.

Total population in the Philippines has increased to around 101 million as of

2015. By 2020, the population is expected to grow to around 110 million. This amounts

to an average annual population growth rate of 1.6 percent from 2015.

 CALABARZON followed by NCR and Central Luzon have the largest populations

and are predicted to remain so by 2022 and even beyond. The Philippines has 33

highly-urbanized cities, with NCR, Metro Cebu, Metro Davao, and Metro Cagayan de

Oro having the largest populations.

Regions with higher gross regional domestic product also have higher

populations. CALABARZON, NCR, and Central Luzon account for 62.3 percent of GDP,

while ARMM (0.7%), Caraga (1.3%), and MIMAROPA (1.6%) are the lowest

contributors.

REACTION:

Surely the red marks are a negative indicator of the government, but numbers

just don’t tell the whole picture. For in terms of satisfaction ratings most of the key

leaders of the country get a satisfactory ring, depicting that they have trust and

confidence and experience changes and hope for more developments.

Amidst the red marks industries grew to wit:

Exports grew 14.4 percent in Q418, 5.7 percent in Q119 and 4.4 percent in Q219.

Imports grew 12.4 percent in Q418, 8.6 percent in 1Q19 and 0 percent in 2Q19.

On the supply side, agriculture, fishery, forestry grew 1.8 percent in Q4, 0.7 percent in

Q119 and 0.6 percent in Q219.

Industry sector grew 6.6 percent in Q418, 4.8 percent in Q119 and 3.7 percent in

Q219.
In industry subsectors, mining and quarrying grew 8.1 percent in Q418, 4.7 percent in

Q119 and 15 percent in Q219. Manufacturing grew 3.2 percent in Q418, 4.9 percent in

Q119 and 4 percent in Q219.

Construction grew 20 percent in Q418, 5.4 percent in Q119 and -0.6 percent in

Q219. Utilities grew 6.7 percent in Q418, 3.1 percent in Q119 and 7.5 percent in Q219.

Services sector grew 6.8 percent in Q418, 6.8 percent in Q119 and 7.1 percent in Q219.

Thus, in terms of the implementation of the Build Build Build Program, it is

constant and a continuous observation that the government is serious in improving and

developing the whole country as bridges, roads and terminals are being improved. As it

is progressively manifested, it is also fare for us to wait until the last build then we are

able to impartially and correctly mark the program.

Conclusion

In every government, surely perfection cannot be attained, but the mere fact that

it is striving for excellence is a job well done. Red marks are just numbers that needed

to be addressed properly, or an identified weak area that needs improvement and

should serve as guide for the government.

Recommendations

In my opinion the following are recommended.

1. As the report identifies, tangible weaknesses and strengths, the government

must thrive on improving on its weaknesses and invest ore on its strengths. This

could be done through policy formulation and implementation.

2. Accelerate the Build Build Build Projects, for although it is there for excellent

purposes, delays may decrease and weaken its purpose.