THE country’s growth drivers must be rebalanced in order to sustain the strong growth momentum that the Philippines is seeing today, and to protect the quality of economic expansion from so-called booms and busts—or the sudden rise and fall of growth in the country—a Cabinet secretary said.
Speaking before regional journalists at the Asia-Pacific Economic Cooperation seminar, hosted by the Embassy of the United States, Socioeconomic Planning Secretary Arsenio M. Balisacan said the country must take opportunity of the current strength it is showing in improving other sectors that can contribute more to growth.
“We need to rebalance the economy, and look for other sources of growth. The capacity of the economy to generate more quality jobs would be very much limited [if we don’t rebalance],” Balisacan said.
He explained that the rebalancing that the country needs is one that is different from the rebalancing seen in other parts of the world.
“What the country needs is a contrast of rebalancing with neighbors; the rebalancing that they are talking about is moving from too much dependence on exports and investments. In China, for example, much of the growth was coming from investments and exports, only 40 percent was from domestic consumption,” Balisacan said.
He added that the Philippines, on the other hand, depended much on the domestic market in terms of its growth driver in the past years.
“We have depended so much on the domestic front. The problem is that the domestic front is a very limited market. We need a much bigger market,” Balisacan said.
In particular, Balisacan said the Philippines needs to get more investments as complementary sources of growth.
Other areas that the secretary is looking on further room for improvement is exports and trade.
“You need this for high-quality jobs. Investment has to grow, construction has to grow. Exports have to grow increasingly more important,” Balisacan stressed.
Although the Philippines needs more push, Balisacan said that they are already starting to push for the diversification of growth so that there will be no more busts in the economy as seen in the past.
He said that construction is seen to have a much larger share to the economy in the next year due to the projects in line from the government and the private sector, as well. Investments, however, still lag.
The Philippine economy grew by 6.9 percent in the last quarter of the year, rebounding from the disappointing 5.3-percent growth in the third quarter of 2014. This cemented the annual growth in 2014 at 6.1 percent.