Today's Punto
Today's Punto
PCC chair says PHL economy ‘prematurely deindustrializing’
By Ding Cervantes

May 15, 2018

CLARK FREEPORT - The Philippine economy, reputed to be among the fastest growing in Asia, could be “prematurely deindustrializing.”

Philippine Competition Commission (PCC) chairman and economist Arsenio Balisacan expressed this view here during the two-day Regional Scientific Meeting held by the National Academy of Science and Technology (NAST) over the weekend.

In his speech before the gathering attended largely by Filipino scientists, Balisacan noted that the pattern of the recent economic growth of the Philippines is different from the patterns of other countries which have become first world economies.

“There has been rapid growth of the Philippine economy in recent years, but competitiveness has remained weak and there remain poor social outcomes such as poverty,” he said, noting that economic growth has not reduced poverty in the country.

In other countries which have reached developed status, the rise of their economies also led to poverty reduction, he said.

Balisacan also cited historical patterns that showed that in developing economies, industry growth surpasses services in the statistics of gross domestic products (GDP).

He noted that in the Philippines, services have continued to be the dominating factor in GDP, more than industries. This pattern, he added, is seen only in the world’s already fully developed countries.

“The Philippine economy is deindustrializing, already behaving like a rich country. This is bad for employment and inclusion,” he said.

Balisacan also noted that while much red tape in doing business with government has already been reduced in the Philippines, other developing countries also undertook anti-red tape measures and even did better.

He noted that “ease of doing business” in the Philippines has remained one of the major concerns of foreign investors in the country, along with peace and order issues.

Balisacan said, however, that the economy could still “recover lost grounds by improving fundamentals through better institutions, better infrastructure, growing stocks of human capital, skills and knowledge.”

He also cited the role of a competition policy to drive better the local economy and pave the way for better inclusion that could reduce poverty in the country.

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