Phl needs to address crucial challenges to boost economy

CEBU, Philippines - To attain sustainable development and inclusive growth, economists urged to develop both the services and industrial sector intended not only towards the economic progress of the country but also towards the productivity of the growing labor force. 

Asian Development Bank Senior Country Economist Norio Usui cited, during yesterday’s economic forum held at the University of the Philippines – Cebu, the key policy challenges needed to be addressed and recommendations that must be considered in terms of the Philippine economic growth.

In his paper entitled “Taking the Right Road to Inclusive Growth”, he mentioned that the development of the services sector is insufficient to achieve inclusive growth since there are still a large number of people who remain poor and unemployed.

He further admitted that although the Philippines’ growth has been primarily driven by services, the industry’s labor demand biased toward relatively skilled workers is not directly related with a higher productive employment for the total populace.

He then suggested that the government should prioritize more on public support focusing on specific products for industrial development and on the formation of an effective dialogue with the private sector wherein the latter can exploit business opportunities in the targeted products.

Usui noted that if the country could develop a “stronger” industrial sector, it would enable the generation of more job opportunities for the growing working-age population and contribute to an economy-wide productivity.

Meanwhile, National Economic and Development Authority Assistant Regional Director Efren Carreon expressed support on the key concepts towards inclusive growth raised by Usui.

He admitted that despite the boom in the business process outsourcing industry and a good performance in the tourism sector, the country still is confronted with other developmental issues.

He cited that the export sales of outsourcing companies have increased from US$ 200 million in 2005 to US$ 1.13 billion in 2011. From four outsourcing companies established in the Central Visayas in year 2000, it has grown over 100 after eleven years wherein majority of which are located in Cebu.

With 65,000 workers employed in the BPO industry, he said that more companies could be expected to be situated in the Queen City of the South in the next five years.

Based on the 2008 annual survey of the Philippine Business Industry, a BPO employee receives an average of P27 800 per month.

Though he considered such high compensation and job generation from BPO companies as “good news”, he noted that there are still other sectors left untapped and issues to be dealt accordingly.

According to the April 2012 labor force survey, he said that there is a high unemployment rate of 7.2% and underemployment rate of 22.4% in Region 7.

Moreover, poverty incidence in Central Visayas is rated 30.2% in year 2010.

He further described the Philippine economy as service-oriented with the Gross Domestic Product profited through 61% of the services sector, 29% industrial and 10% from agriculture, forestry and fisheries sector.

Although with such economic contribution from services, Carreon said that the development of the manufacturing sector should also be considered and realized.

He added that the government, together with the private sector and non-government organizations, is aggressive in exerting efforts to improve the business and investment climate and promote competitiveness in the country.

“We are very much concerned about this and we are going to continue to study further,” he stated. (FREEMAN)