Binay urges gov’t to energize mfg, agri sector to fuel economic growth

MANILA, Philippines -  Vice President Jejomar Binay said yesterday that the Philippine government must energize manufacturing, agriculture and other sectors to make sure that majority of the Filipino people, particularly the poor benefit from the country’s economic gains. 

“Moving forward, our economic agenda is therefore very clear.  We must make sure that our economic gains are felt by the greater mass of our people and we must energize the manufacturing, agricultural and other sectors of our economy. Inclusion and diversification must be the key elements of our strategy,” said Binay, during the Banyan Tree Leadership Forum at the Center for Strategic and International Studies (CSIS) in Washington D.C.

Binay said that the country’s economic fundamentals should be strengthened by expanding the tax base, and improving compliance and collection rather than raising taxes.

“We must raise infrastructure spending from the current 2 percent of our GDP to a truly progressive five percent of GDP; investing in infrastructure that raise the quality of the lives of our people and also enhance the country’s economic climate,” Binay said.

Binay said the government should expand and enhance the delivery of social services, particularly in education, health, environment and social welfare.

He also pushed for the promotion of entrepreneurship development especially in the grassroots to provide livelihood opportunities.

“And finally, we need a new executional paradigm that is aligned with sectoral, geographic and ground level realities. It means that we must understand the unique requirements of each economic, geographic or political sector and adjust our executional strategies accordingly,” Binay said.

Binay said the government’s agenda should include the liberalization of the economy to improve competitiveness and attract investments into manufacturing and other stagnant sectors. 

He said the Philippines’ economic growth was fuelled by the boom in the services sector, particularly in the business process outsourcing industry, as well as the remittances of overseas Filipino workers (OFWs).

“The Philippine economic miracle is the tale of two economic sectors: the booming business process outsourcing industry and the record high remittances of our Filipino overseas workers. This however underscores the soft underbelly of the Philippine economic boom,” Binay said.

“To provide sustainability as well as greater employment opportunities, the Philippine economic portfolio must diversify equally into the manufacturing, agriculture, tourism and other sectors of the economy,” Binay added.

Apart from this, Binay asked the gov’t to harmonize local and national laws and address policy and infrastructure misalignments.

“In tourism for example, a true open skies policy with an aggressive airport development program has to be undertaken,” Binay said.

Binay also urged reforms in the Electric Power Industry Reform Act (EPIRA) to lower the high costs of power and address the energy shortages in the southern regions of the Philippines.

“We must modernize our agriculture to raise our farmers’ productivity, one of the lowest in the region, and correct the inefficiencies of the agriculture supply chain that allow as many as eight layers of middlemen to deprive the Filipino farmer the full value of their produce,” Binay said.

“And we must keep our promise to maintain a clean and transparent government, with a stable policy regime into 2016 and beyond,” Binay added.

Binay also expressed confidence that the emerging regional economic integration programs will increase the Philippine economy’s opportunities for expansion and diversification.

“These regional economic agreements provide rare business opportunities not only for regional companies but also for US firms seeking a large integrating market and more economic resources to enhance their global competitiveness,” Binay said.

“It also gives local entrepreneurs, especially those in border provinces, a business edge over bigger competitors that are just beginning to understand the needs of customers in neighboring economies,” Binay added.

Given the impending ASEAN integration, “greater economic engagement with countries in the region becomes a major component of the US rebalancing strategy,” Binay said.

And given its long history and diversity of its economic partnerships with US firms, the Philippines expects a greater share of its benefits. In particular, we want to raise the inflow of job generating US foreign direct investments,” he further said.