MANILA, Philippines (UPDATED) – The Philippines should create more investment opportunities in agriculture, manufacturing and mining to escape the curse of jobless economic growth, experts and businessmen said on Wednesday, February 26.
Economic growth in the Philippines has been among the highest in Asia in recent years. But the benefits have escaped the vast majority, particularly farm workers, they told the 2014 Arangkada Philippines Forum sponsored by the Joint Foreign Chambers (JFC). (READ: Alcala: PH not yet ready for ASEAN Economic Community)
“If you want a major increase in employment, you have to broaden your basis of growth,” Julian Payne, president of the Canadian Chamber of Commerce of the Philippines.
The JFC unveiled a report on the progress of the Arangkada initiative, a 10-year roadmap set in 2010 that targets $75 billion in foreign direct investments, 10 million jobs and P1 trillion revenues for the Philippines.
Out of 462 recommendations put forward by businessmen in the roadmap, 73.26% are “active or moving,” while 26.97% were considered “dormant,” according to John Forbes, senior advisor of the American Chamber of Commerce of the Philippines-The Arangkada Philippine Project.
The Arangkada roadmap anchored its targets on 7 “big winners” – agribusinesss, outsourcing, trade and industries, infrastructure, manufacturing, mining, and tourism (medical travel and retirement).
Tourism is enjoying some success, according to Payne, but “dormant” reforms were noted in agribusiness and mining. (READ: PH ‘rising star’ in travel, tourism)
Ian Porter, president of the Australia-New Zealand Chamber of Commerce of the Philippines, said: “There are two big winners not performing which are key: One is agribusiness which is a crucial area in [creating] employment and because it feeds manufacturing. Manufacturing in the Philippines is low base. And mining has not progressed at all.”
The mining sector has been on a standstill since the issuance of Executive Order 79, which banned new mining contracts until the passage of a new revenue-sharing scheme between government and industry.
Porter noted that just two mining projects could raise the Philippines’ gross domestic product (GDP) by 2 percentage points.
More reforms needed
The economy grew 7.2% last year, the fastest since President Benigno Aquino III came to power in 2010.
However, the foreign chambers of commerce said 22.3% of families still lived in poverty, barely changed from the figure in 2009.
The rate of unemployment and underemployment as of October last year was 24.4%, down only slightly from the previous year, government statistics showed.
While they gave Aquino credit, the heads of the country’s foreign chambers of commerce said his reforms did not go far enough or were too slow.
While foreign direct investment in the Philippines had picked up, it was still lagging far behind its peers in Southeast Asia, they added.
“Competitiveness in the country is getting better but it is not enough,” said Takashi Ishigami, president of the Japanese Chamber of Commerce.
He and other foreign businessmen said the Philippines should scrap restrictions on foreign investment, keep the minimum wage from rising and further cut bureaucracy to bring the the country to the same level as the rest of the region.
World Bank economist Rogier van den Brink said the Philippines needed to create 14.6 million more jobs for those already unemployed and underemployed, on top of those who join the labor force each year.
He said entrenched groups in the country were resisting competition and preventing the economy from opening up.
President Aquino nevertheless urged the foreign business groups to continue pouring in investments, promising them that his administration would continue with its reforms.
“With your help, we can accelerate the growth of the Philippines and make growth robust, sustainable and truly inclusive,” he said in a prepared speech read by Socioeconomic Planning Secretary Arsenio Balisacan.
Watch the panel discussion on jobs at the forum:
President Benigno Aquino III’s speech as ready by Socioeconomic Planning Secretary Arsenio Balisacan.
– Rappler.com, with Agence France-Presse
Rice harvest in the Philippines image from Shutterstock