Category : Speeches
Date : July 06, 2018
Title : Message of Socioeconomic Planning Secretary Ernesto M. Pernia during the "Tatak ng Pagbabago" Pre-SONA 2018 Forum

Socioeconomic Planning Secretary

State of the Economy
Pre-SONA Forum
Philippine International Convention Center | July 06, 2018

Honorable members of the diplomatic corps, distinguished guests, colleagues in the President's Cabinet, Ladies and gentlemen, good morning.

The President will deliver his Third State of the Nation Address in two weeks' time, and this early, we have every reason to expect his speech will be cheered on, particularly on the economic and infrastructure fronts.

This confidence is anchored on parameters that are measurable, and outlined in the Philippine Development Plan 2017-2022. Today, we take stock of the progress we have made in implementing his medium-term economic blueprint.

The first year of the PDP’s implementation has seen challenges, encountered a few bumps and hiccups, but through it all, we emerge counting many triumphs.

I am pleased to give you a brief overview of the recent economic developments of the country's socio-economic status, as well as accomplishments in the first year of the implementation of President Duterte's economic blueprint, the Philippine Development Plan 2017-2022.

First, economic growth has been high and steady. With a 6.7 percent growth in our Gross Domestic Product (GDP) in 2017, the economy accelerated further by 6.8 percent in the first quarter this year. As we've been saying ad nauseam, this makes the Philippines one of the fastest growing economies in Asia, next to India (7.7%) and Vietnam (7.4%), and at par with China (6.8%). The first quarter performance likewise marks the 10th consecutive quarter we recorded growth of 6.5 percent or higher.

The economy is also undergoing structural transformation as growth is now increasingly being driven by investments vis-a-vis consumption on the demand side, and by the industry sector--manufacturing in particular--relative to the services sector on the supply side. The resurgence of the manufacturing sector is especially noteworthy, with the volume of production expanding by 20 percent in May 2018, sustaining its double-digit growth since the start of the year.

This means that the quality of economic growth is improving, which implies that it is sustainable and able to generate quality jobs.

The government’s massive infrastructure program Build, Build, Build should contribute to this growth in the following quarters and years As detailed during our recent NEDA press briefing, we expect to spend as much as 7.3 percent of GDP on public infrastructure by 2022. We’ve already hit the ground running, and envision the completion of 32 of 75 flagship projects by end-2022, while making sure that the 4,909 other projects in the provinces and towns throughout the country will have broken ground by then.

Gross National Income or GNI per capita also grew annually by 4.8 percent in 2017, well over our target of 4.5 percent growth for the year. Thus, our country will join the ranks of upper middle-income countries by end-2019.

We do not have a report on poverty incidence just yet as the Family Income and Expenditure Survey was last conducted in 2015, but we are given the assurance that results will be available next year.

Even so, according to the SWS survey last March, there are fewer families who rate themselves as poor or mahirap. The proportion of self-rated poor families shrank to 42 percent of those surveyed in the first quarter from 44 percent during a December 2017 round. Also, the same SWS survey found that the number of families who consider their food to be “poor” was 29 percent, a record low.

While our inflation rate for the first half of the year went slightly off target at 4.3 percent due to the rise in prices of rice, fuel, and fish, we see this to be temporary as we transition towards fully-implementing important public policy reforms.

Unemployment rate from the April round this year was down to 5.5 percent versus the year ago's 5.7 percent. This is the lowest recorded unemployment rate for all the April rounds of the Labor Force Survey in the past decade. This puts the unemployment rate in the first half of 2018 at 5.4 percent, continuing its downward trend over the years.

Rapid economic growth has also translated to significant gains with 1.52 million additional employment generated in the first half of the year, well on track to achieve our target of 900,000 to 1.1 million employment generation in 2018.

Our goal is to further bring unemployment rate down to the range of 4.7 to 5.3 percent this year.

Further, I am pleased to note that we have exceeded our target to reduce underemployment rate in areas outside the National Capital Region, which was down to 17.1 percent in 2017. Moreover, emerging numbers tell us that we remain on target this year--underemployment rate in areas outside the NCR was at 18.8 percent in the first half of 2018. This is consistent with our goal of spreading growth to the regions.

Gains were likewise seen in the health and education sectors.

Child health outcomes improved as we have brought down infant and under-five mortality rates. We are seeing fewer infant mortality per 1,000 live births from 23 in 2013 to 21 in 2017. Under-five mortality per 1,000 live births also decreased from 31 in 2013 to 27 in 2017.

Improvements in maternal health care services are likewise being realized. Births delivered at a health facility rose from 61 percent in 2013 to 78 percent in 2017, and births attended by skilled providers increased from 73 percent in 2013 to 84 percent in 2017.

Total fertility rate also declined from an average of 3 births per woman in 2013 to 2.7 percent in 2017. Still, we need to fully accelerate implementation of responsible parenthood and family planning programs throughout the country to help reduce poverty incidence from 21.5 percent in 2015 to 14 percent by 2022.

On education, we are seeing a steady decline in elementary and secondary students dropping out of school. Students reaching the final year of elementary and high school increased to 94.2 percent and 84.6 percent, respectively, in school year 2016-2017 as opposed to 87.5 percent recorded in school year 2015-2016.

The number of students receiving government support for tertiary education will likewise dramatically increase with the free tuition policy in state universities and colleges in place.

Lastly, we have also moved a notch in the 2017 Global Innovation Index Report. The Philippines is now ranked 73rd out of 127 economies covered by that report, branding the country as one of the new Asian Tigers and leaders in ICT service exports in Southeast Asia.

I cannot, in one go, give to you all the socioeconomic indicators we've been tracking. These are all detailed in the 2017 Socioeconomic Report, which is published on the NEDA website. It showcases the gains achieved thus far, priority strategies for 2018 and 2019, as well as policy directions for the next two years.

The PDP 2017-2022 promises to lay the foundation for attaining the country’s long-term vision while addressing short-term and medium-term needs. The strategies outlined in the Plan can only be effective if implemented with important reforms, many of which already started groundwork last year.

This year will be an important transition period, as we expect full implementation of many of our planned programs and proposed socioeconomic policies next year.

While many challenges and risks lie ahead, I am confident that we will reach our macroeconomic targets and further the national development agenda. The government’s Economic Development Cluster remains committed to its mandate of ensuring stable, inclusive, and most importantly, sustainable growth.

Thank you and good morning.