The Philippine Development Plan
2011-2016 Midterm Update:
Challenges and Strategies
EMMANUEL F. ESGUERRA
Deputy Director-General
13th PESO Congress
25 September 2013
Outline
I.
The Philippine Development Plan (PDP) Midterm
Update – Framework and Process
II. The Development Challenge
III. National Short-term Economic Outlook
IV. Investment Plan for Strategic Sectors
Social Contract


Transparent, accountable and
participatory governance
Poverty reduction and
empowerment of the poor and
vulnerable

Rapid, inclusive and sustained
economic growth

Just and lasting peace and the rule of
law

Integrity of the environment and
climate change mitigation and
adaptation
PDP 2011-2016

Promote transparent and responsive
governance

Develop human resources through
improved social services and protection

Achieve stable macroeconomic
environment
Boost competitiveness in productive sectors
Improve access to financing
Invest massively in physical infrastructure




Advance peace process and guarantee
national security

Ensure ecological integrity
We are on track with respect to our economic targets;
the present challenge is to improve social outcome targets.
PDP 2011-2016 Targets
7-8%
Gross Domestic Product
22%
Investment/GDP ratio
6.8-7.2%
Unemployment Rate
Poverty Incidence down to
16.6%
Where are we now?
Unemployment rate
7.0% (2012)
6.8% (2012)
7.6% (SI 2013)
Real GDP Growth
20.3% (2012)
20.8% (SI 2013)
Fixed Capital as ratio to
GDP
7.3% (ave. of LFS’ 2013 Jan, Apr &
Jul round)
Underemployment rate
20.0% (2012)
19.8% (ave. Jan, Apr & Jul 2013)
27.9% (S1 2012)
28.6% (S1 2009)
Poverty Rate
More needs to be done to achieve inclusive growth.....
2011
First Semester Poverty Incidence
Among Population (%)
40
12.8
35
30
14.3
28.8
28.6
27.9
8.9
25
20
64.0
2012
16.6
15
10
5
0
S1 2006
S1 2009
S1 2012
FY 2015
Reg NCR, III and IV
14.4
Other Luzon
Visayas
12.7
Mindanao
8.8
64.1
We need to generate more and better jobs
Ave 2010
Ave 2012
Ave 2012
(Jan, Apr &
Jul)
Labor Force Level (‘000)
38,893
40,426
40,424
40,972
Employment Level (‘000)
36,035
37,600
37,577
37,978
54.5
57.2
57.1
58.6
2,859
2,826
2,847
2,994
7.4
7.0
7.0
7.3
Underemployment Level (‘000)
6,762
7,514
7,632
7,509
Underemployment Rate (%)
18.8
20.0
20.3
19.8
Indicator
Wage and salary workers (%
share to total employment)
Unemployment Level (‘000)
Unemployment Rate (%)
Source: Labor Force Survey, National Statistics Office
Ave 2013
(Jan, Apr &
Jul)
Lessons Learned:
Midterm Assessment of PDP 2011-2016 Implementation
 Good governance has proven to be an effective platform upon
which strategies should be implemented.
 Macroeconomic (fiscal, financial, external) and political
stability fuels positive expectations that lead to growth.
 Economic growth is necessary but not sufficient for poverty
reduction.
 Growth strategies need to have spatial and sectoral
dimensions to ensure inclusivity.
 Disasters can negate the gains and even push back
development.
7
Guiding Principles
• Efficiency (catalytic; government intervention facilitates and
not substitutes for private action)
• Equity (broadening opportunities through connectivity, human
capital investments)
• Feasibility (doable within the Plan period)
Desired Outcomes
• Rapid increase in employment opportunities to
significantly reduce the stock of unemployed persons
• Significant reduction in poverty incidence to come as
close as possible to the MDG
8
Hence we will do more to pursue inclusive growth.
National
Security
Ecological
Integrity
Good
Governance
(Secure
property
rights,
Efficient
regulation,
Transparent
and
accountable)
REDUCED POVERTY ,
MASSIVE EMPLOYMENT CREATION
POSITIVE ACTION with Spatial and Sectoral Dimensions
Equalize development opportunities, Improve resilience
Market
demand
Rapid and sustained growth
Science,
technology ,
innovation
Education and
skill set of the
workforce
Infrastructure
jobs
Investments
Boost
competitiveness
Improve access
to financing
Macroeconomic Stability
(fiscal, monetary, external, financial)
9
Focusing on Priority Sectors
PDP Midterm Update
o Agribusiness/Agriculture
o Manufacturing
o BPM/IT
o Housing
o Infrastructure/Logistics
o Tourism
Map courtesy of DOLE
Positive actions with sectoral and spatial dimensions
will be undertaken to achieve inclusive growth.

Infrastructure development focusing on connectivity between
regions/provinces, esp. transport and power

New growth drivers outside NCR (agri/agribusiness, tourism, IT/BPM in
next wave cities, public housing, manufacturing, infra/logistics)

Investment in human capital to improve the competitiveness/ productivity
of current and future stock of the labor force

Provision of social protection against income and employment shocks
for the most vulnerable

Improved resilience to natural disasters
In order to accelerate economic growth , we are
diversifying our industries and investment
Strategies to diversity industries
• Strengthen the contribution of construction and utilities in line with
the infrastructure development program (i.e., transport and
power)
• Diversify manufacturing: strengthen other subsectors, not only
semi-conductors; diversify exports; promote higher value chain
subsectors; strengthen link with agriculture (agri-industry)
• Reduce the cost of doing business
– Quality Infrastructure
– Streamlining of registration and licensing procedures
– Implementation of programs and projects that addresses bottlenecks
National Short-term Economic Outlook
We assume that growth will continue
in 2013 and beyond
2012
Actual
2013 S1
Actual
2013
Outlook
2014
Target
GDP Growth (%)
6.8
7.6
6.0-7.0
6.5-7.5
Agriculture Growth (%)
2.8
1.4
3.5-4.5
3.2-4.2
Industry Growth (%)
6.8
10.6
6.4-7.5
7.4-8.5
Services Growth (%)
7.6
7.1
6.3-7.3
6.7-7.6
Source: NEDA as approved in the DBCC
Growth Drivers - Production
 Strong performance of agri-based manufacturing,
and recovery of semiconductor and electronics
 Robust public and private construction projects
 Buoyant domestic and local tourism
 Continued strong growth of wholesale and retail
trade
 Real estate particularly housing
 Greater productivity in agriculture and rebound of
the fisheries subsector
Growth Drivers - Expenditures
 Higher public construction and investments in
power generation
 Robust private investment in construction and
durable equipment
 Strong household consumption due to better
employment opportunities, strong remittance
inflows, and low and stable inflation
 Increased tourist arrivals and more demand for
business process management
 Improvement of external trade conditions
The proposed 2014 budget will help us move
towards inclusive growth...
Government
that
action with
• Facilitates massive
employment generation
• Helps to significantly reduce
poverty
• Sectoral dimension
• Spatial dimension
The budget will support positive actions
with sectoral and spatial dimensions.
• Infrastructure development focusing on connectivity between
regions/provinces; power security, eventually reduced power cost
• New growth drivers outside NCR(agri/agribusiness, tourism, IT/BPM
in next wave cities, public housing, manufacturing, infra/logistics)
• Completion of asset reform, particularly individual titling of lands
under CARP/CARPer
• Investment in human capital to improve the competitiveness/
productivity of current and future stock of the labor force
• Provision of social protection against income and employment shocks
for the most vulnerable
• Improved resilience to natural disasters
We also remain vigilant against the following
near-term global and domestic risks to growth...
 Weather disturbances (e.g., Typhoons, prolonged
monsoon rains)
 Delays in the implementation of infrastructure
development projects, particularly power
 Excessive capital inflows/outflows
 Uncertainty of economic recovery in the Euro area and
Japan
 Tapering of monetary stimulus in the US
 Further economic slowdown in BRIC, particularly China
 Possible spike in commodity prices (e.g., petroleum)
…while taking advantage of opportunities
 Improvement in the global economic environment
- Sustained consumption growth in emerging markets
 Demographic transition
- Rising middle-income class, continued growth of working-age population
 Increased economic integration of ASEAN member countries
- Open flow of goods, services, labor, technology, finance
 More financial resources available
- Fiscal space
- Investment credit-rating
*Luncintel, Global Industrial Application Paper Industry 2012-2017: Trend, Profit, and Forecast Analysis
Investment Plan for Strategic Sectors
PIP Revalidation Process: Salient Features
The Revalidated PIP veers away from the identification of all
priority programs and projects of the government and has
focused on strategic core investment programas/projects
(CIPs) that will substantially contribute to the priorities
embodied in the development objectives in the Plan and the
critical indicators in the Result Matrix
In order to realize our medium term goal, we are prioritizing
our programs and projects.
Highlights of the First Draft of the Revalidated PIP: Strategic CIPs By Theme
0.70%
5.83% 3.24%
Accelerating Infrastructure Development
0.29%
0.25%
Social Development Sector
5.91%
Peace and Security
7.01%
Competitive and Sustainable Agriculture
and Fisheries Sector
76.77%
Conservation, Protection and Rehabilitation
of the Environment and Natural Resources
Competitive Industry and Services Sector
Good Governance and the Rule of Law
Total of 102 CIPs amounting to PhP718,431.47 million
Macroeconomic Policy
Most of investment targets are expected to be funded
by NG:
Highlights of the First Draft of the Revalidated PIP: Strategic CIPs:
Funding Source Breakdown 2013-2016*
3.20%
NG (includes ODA loans
and grants)
31.01%
Private Sector
65.79%
Others (GOCCs, LGUs)
* There are 12 emerging strategic CIPs under the theme ‘Accelerating Infrastructure Development’ with no 2013-2016
investment targets reflected in the submission to NEDA.
24
Highlights of the First Draft of the Revalidated PIP:
Investment Targets By Theme*
Theme (Chapter)
Accelerating Infrastructure Development (Chapter 5)
Number of
Strategic CIPs
2013-2016
Total Investment
Targets
(in PhP Million)
69
551,545.75
5
50,354.08
7
42,439.94
10
41,870.69
Conservation, Protection and Rehabilitation of the
Environment and Natural Resources (Chapter 10)
7
23,306.40
Competitive Industry and Services Sector (Chapter 3)
2
5,028.96
Governance and the Rule of Law (Chapter 7)
1
2,076.18
Macroeconomic Policy (Chapter 2)
1
1,809.47
Social Development Sector
(Chapter 8)
Peace and Security (Chapter 9)
Competitive and Sustainable Agriculture and
Fisheries Sector (Chapter 4)
GRAND TOTAL
102
718,431.47
*There are 12 emerging strategic CIPs under the theme ‘Accelerating Infrastructure Development’ with no 2013-2016
investment targets reflected in the submission to NEDA
The Philippine Development Plan
2011-2016 Midterm Update:
Challenges and Strategies
EMMANUEL F. ESGUERRA
Deputy Director-General
13th PESO Congress
25 September 2013