Development Plan’s export, investment thrust explained

The National Economic and Development Authority has refuted criticisms that the Philippine Development Plan (PDP) is anchored only on export-oriented and foreign-investment led model.

Myrna Clara B. Asuncion, director of NEDA’s national planning and policy staff, said in an e-mail that the PDP had considered a “multi-speed world economy.”

That means developed economies will take longer time to recover, Asia will grow fastest and many emerging markets will come from developing countries.

Asuncion said the PDP recognized the crucial role of domestic demand (domestic consumption and domestic investments).

“The PDP only considers the importance of exports and investments (be it domestic or foreign-led) in further increasing the country’s growth potential,” Asuncion said.

At present, the Philippine economy is consumption-driven, Asuncion said.

Growing the economy at a higher rate than the average historical growth of 5 percent is possible with stronger exports and increased utilization of opportunities, whether these come from domestic or foreign sources.

“Investment-led growth is deemed to be more sustainable and could help more in reducing poverty, for it would help create more jobs and employment opportunities,” Asuncion said.

Asuncion said the PDP recognized that the low level of domestic investments and entrepreneurship was one of the reasons for the lack of opportunities in the country and the sheer volume of workers working temporarily overseas.

“The PDP indicates that these (i.e. low level of domestic investments and entrepreneurship) should be addressed along with strategies formulated to ensure that the working poor and the unemployed can participate and benefit from the development process,” she said.

A copy of the PDP, which is downloadable through the NEDA site, states that investment promotion and industry development in job-generating areas will be pursued to boost exports and encourage both foreign and domestic investments.

“The government should pursue intensive promotion and industry development, as well as offer a more focused incentives package to stimulate the economy and allow all development partners an opportunity to take advantage of the gains from increased economic activities,” according to Chapter 2 of the PDP.

The PDP aims for a 7- to 8- percent annual growth for 2011 to 2016.