The National Economic and Development Authority (Neda) remains unfazed by the closure of mines under the Department of Environment and Natural Resources’ clampdown on violators of mining laws.
Socioeconomic Planning Secretary and Neda Director General Ernesto M. Pernia said that, while there will be workers affected by the closure of these mining companies, mining contributes only less than a percent to the gross domestic product (GDP).
“The contribution is only less than 1 percent,” Pernia said. There’s always a way for these workers to shift to gainful employment.”
Based on the April 2016 Labor Force Survey, around 2.9 percent, or 115,564, workers of the 39.916 million employed were in the mining and quarrying sector.
Apart from the risk of closing mines, the Neda said various domestic concerns could hamper the country’s medium-term economic growth.
Pernia said logistics bottlenecks could constrain economic activity in the same way that port congestion in 2014 caused the slowdown of the country’s export and overall economic growth.
Two years ago the city of Manila imposed a truck ban that caused the slow inflow and outflow of goods within and outside of Metro Manila.
Further, other risks include delays in government infrastructure and reconstruction projects, and weather shocks such as La Niña toward the end of the year.
“Weather shocks, including a potential La Niña toward the end of the year, could work both ways—it could increase agricultural production but could also result in floods in urban areas,” Pernia said.
On the external front, Pernia said the weak economic growth of the country’s trade partners, such as Japan, China and even the European Union, could negatively affect the country’s economic growth in the medium term.
The Neda chief added that the “knock-on effects of the Brexit” and geopolitical tensions in the Middle East and West Philippine Sea (WPS) could negatively affect the country’s economic growth in the next six years.
“We will also continuously monitor the monetary policies in the major developed economies and the knock-on effects of the Brexit. Geopolitical tensions in the Middle East and the extended period of low oil prices could also affect OFW [overseas Filipino workers] jobs and remittances. There is also the maritime dispute in the WPS,” Pernia said.
He added that these threats will be met head on by the economy through growth drivers, such as the Asean economic integration, a peaceful transfer of power under the Duterte administration and the resumption of peace talks with the communist-led National Democratic Front.
The Asean Economic Community, Pernia said, will provide new sources of capital, technology and markets, which, he said, augurs well with the government’s efforts to expand its export markets, import sources and diversification of Philippine exports.
He added that the country’s hosting of the Asean meetings next year bodes well for the country’s tourism sector and overall economy.
“Integration with our Asean neighbors will be reinforced with our hosting of the Asean meetings next year. As our experience with our Asia- Pacific Economic Cooperation hosting last year has shown, we expect our Asean hosting to boost our tourism sector,” Pernia said.
These growth drivers will enable the economy to grow 6.5 percent to 7.5 percent next year and 7 percent to 8 percent annually starting 2018 until President Duterte steps down in 2022.
“As you may infer from the numbers, we are quite optimistic. We are keen on taking advantage of opportunities for economic growth while remaining vigilant of the risks,” Pernia said.