MANILA, Philippines — An improved government and private sector should be in place if the Philippines wants to recover from the pandemic and grow inclusively.
Think tanks Philippine Institute for Development Studies (PIDS) and Stratbase ADR Institute both said the public and private sector should work together to reduce inequality in the country that was further exacerbated in the last two years.
PIDS research fellow and Philippine Economic Society president Charlotte Sicat said an improved and innovative public sector would bridge the gap and reduce inequality for inclusive growth.
To achieve this, Sicat said fiscal consolidation and strategic investments in physical and human capital should be prioritized.
She cited the need for prudent and strategic spending to stimulate the economy and outgrow debt given continued borrowings of the government to finance its COVID response programs.
“Government should continue to invest in both human capital and infrastructure but strategically because of the need for fiscal consolidation,” Sicat said.
“The strategic capital investments will encourage private sector participation at all levels,” she said.
In particular, infrastructure spending and investments in data and information systems and digitalization are among the needed institutional innovations.
Sicat argued that the lack of capabilities and access to information and communication technology is causing a digital divide and worsening inequality.
“Harnessing digitalization requires a whole-of-society approach and provides a major role for the private sector to contribute to sustaining economic recovery,” Sicat said.
“This requires laying the foundation in infrastructure and systems, investments in human capital, financial sector, and private sector as partners,” she said.
On the other hand, Stratbase president Dindo Manhit called for the adoption of a multi-stakeholder strategy to address inequality.
Manhit said collaboration and investments between the public and private sector, as well as a better environment for investments are needed by the new government.
“The government can only create that environment, but it is the private sector that can create jobs. These endeavors trigger a domino effect by creating jobs, providing income security, and spurring consumption and real growth,” he said.
But in order to attract investments for the Philippines, Manhit said the next administration should uphold the rule of law, promote good governance, strengthen efforts in transparency and accountability, and spearhead political and economic reforms.
“When prospective foreign investors see that even domestic players show positive response to government initiatives, then they too will join in the pursuit for honest and collective growth,” he said.